One of the famous false prophecy of Karl Marx is that the free market mechanism would be lead to the monopoly of few corporations (thanks to economy of scale) that would end up controling the world production.
In other world, he tought unconstrained competition would allow for large entities to capture the economy.
This is already realized in many countries, a few large enterprises controlled the production of almost everything in a country. And the best example is the fiat money creation, totally dominated by a few reserve banks, while from the beginning any kind of private currency is allowed to circulate
It's because of state intervention, not because of competition.
And the block size limit has nothing to do with free market, it is just a measure to prevent spam attacks, without this limit, a bank can jam the traffic on bitcoin network for months, so that no transaction can be done at all
A technical expert (a blockchain advisor making around 20k/month) told me that spam attacks are made easier by a small blocksize.
The fact that small blocksize helps preventing spam attack is something highly debatable, not a dogma like some Bitcoin developpers want you to believe.
It is very interesting that the longer you work with bitcoin, the more you understand that in such a decentralized system, true free market does not really work, it is in fact very socialized, since everyone's interest is tied to the strongest chain in the end. You can fork what ever chain you like but the value of that chain will be minimal (since it break the most important promise of bitcoin - limited total supply, any fork is inflation, bring in more money supply) thus make that move meaningless market Wise
So you think that the longer you work with Bitcoin the more you understand economics?
It's as misguided as an economists saying the more he studies economics the more he understands Bitcoin.
When you say that free market doesn't work because "such decentralized system is very socialized" you are making a false dichotomy and are showing your lack of understanding of what free market is (and therefore your inability to have a enlightened opinion about wether it is working or not). Market is not antitethical to socialization.
When you are taking about everyone's interest you are taking about market forces (it's interests which drive market behaviors). The fact that everyone's interest are aligned (which is anyway probably untrue) doesn't imply that free market won't work.