> The free market fundamentally doesn't have a good response to this problem, excess capital is taken out of these companies during good times and then they run to governments seeking bailouts during bad times but governments don't know how to mandate good corporate governance.

Sounds like the free market hasn't been tried, a key plank of the free market on the supply side is that incompetent managers have to go bankrupt and lose their capital or otherwise get squeezed out. If the government is going to bail people out then obviously the companies will take adopt a ridiculously risky management strategy because they get the upside and dodge the downside, so they just have to maximise the potential upside at any cost. No surprise if after getting a bailout people do exactly what they did that led to the bailout until they need another bailout. Why change?

The trick to "mandating" of good corporate governance is not to bail them out. Then at least the corporations will be governed in a way that they aren't likely to go bankrupt. Maybe even make things people want and sell them at a profit.

> here's a few industries where structurally, companies can only exit the market but it's almost impossible for a new company to enter. Airframes, jet engines, CPU manufacturing, lithography etc.

Is there actual evidence for this, or are the companies involved just doing a good enough job that the market doesn't see a need for new entrants? Because it actually seems a bit implausible that these technologies could just disappear or even become less available under a free market. What we actually see is the likes of NVidia or ASML, where other players can't catch up because the market leader is just pushing the cutting edge forward too quickly (spare a thought for Intel, who was the unbeatable colossus once).