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but eventually companies form truces and shift to rent seeking
You forgot the third element: "and coopt governments to enforce their truce."
Without government intervention big oligopolies are highly unstable. The more intervention the less competition there'll be.
Companies and trusts don't necessarily need government to enforce their truce. The Light Bulb Conspiracy was one such example, but Standard Oil and the railroad companies also had schemes.
The Light Bulb Conspiracy was one such example
Patents are government enforced monopolies. The moment the patents expired the cartel fell apart.
but Standard Oil
Standard oil was smacked down because they went into competition with the oil cartels, rather than settling for a piece of the pie with the established players. If they had been allowed to remain on the market they would likely have been outmaneuvered by smaller leaner outfits, as well as expansion from competing technologies.
and the railroad companies also had schemes.
This has always struck me as a phenomenally bad support for this argument. Railroads were often in competition and any significant spike in prices would typically result in competition springing up. The railroad boom lasted for a few decades until cars started appearing, then all the railroads slowly started to go bust and either disappear or be bailed out/bought up by governments.
Nowadays there are very few private railroads or metros. As a technology it hit it's peak a long time ago and without governments being involved most of them would be gone.
Perhaps a better example would be the current tech companies: Facebook, Twitter, Youtube, Uber, and Reddit all ran losses for over a decade. This was only possible precisely because of deep pockets funded via capitalists looking to corner markets. People do not always act rationally and certain factors can create 'natural' monopolies, such as the Network Effect. The above companies (Uber excluded) specifically were funded for an extensive amount of time to exploit that network effect well before the market was ready for this kind of social media.
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