Seems like the disconnect stems from the definition of market failure. In your interpretation, persistence of profits is what makes a market failure. Economic theory is a bit more nuanced than that: market failure means inefficient allocations of goods and services on free markets. Inefficient means that there exists another conceivable outcome where an individual may be made better off without making someone else worse off.
If we accept the notion that whether a market efficient vs inefficient depends on whether there is another conceivable outcome that is not zero sum, we can summarize your argument to this:
there are no profits in efficient, free markets, therefore the existence of profits can be deemed market failures.
so, what other reasons can there be to the existence of profits while achieving maximum efficiency on a market? inelastic demand comes to mind for one which in itself has nothing to do with market failures. there are others, like high barriers to entry or innovation advantages or economies of scale. none of them are indicators of market failure HOWEVER they do suggest further analysis into the market conditions and more importantly the behavior of the players as some companies might be more exposed to act in a way that leads to market failure if these parameters persist. however we would need to assess whether markets with persistent high profit margins are more prone to failure than markets with persistent low or mid margins.
which captures my argument: the persistence of 90%+ profit margins in itself are not a good indicator of market failure. while this is true, we can see that market failure can be present in software markets but that has to do with the market structure due to the behavior of the players not the size of the profit margins.
this is why I think your argument while sounds sensational and a great catchphrase for a political rally, it lacks substance and cannot adequately capture reality.
if you talk economics make sure you know what you're talking about.
profit happens when I can give you 10 units of value that costs me 1 unit of value. depending on risk factors, we split the difference. ie: if I give you the tool that does it for you, I get all 9 units because all risk is mine. if I tell you how to do it I get maybe 1 unit because most risk is yours.
what you're referring to is arbitrage. efficient markets kill arbitrage (zero risk profit)
If we accept the notion that whether a market efficient vs inefficient depends on whether there is another conceivable outcome that is not zero sum, we can summarize your argument to this:
there are no profits in efficient, free markets, therefore the existence of profits can be deemed market failures.
so, what other reasons can there be to the existence of profits while achieving maximum efficiency on a market? inelastic demand comes to mind for one which in itself has nothing to do with market failures. there are others, like high barriers to entry or innovation advantages or economies of scale. none of them are indicators of market failure HOWEVER they do suggest further analysis into the market conditions and more importantly the behavior of the players as some companies might be more exposed to act in a way that leads to market failure if these parameters persist. however we would need to assess whether markets with persistent high profit margins are more prone to failure than markets with persistent low or mid margins.
which captures my argument: the persistence of 90%+ profit margins in itself are not a good indicator of market failure. while this is true, we can see that market failure can be present in software markets but that has to do with the market structure due to the behavior of the players not the size of the profit margins.
this is why I think your argument while sounds sensational and a great catchphrase for a political rally, it lacks substance and cannot adequately capture reality.