Open any basic economics textbook and it will tell you that a cornerstone of capitalism is competition. “Competition is the other vital attribute of a capitalist system” says Investopedia, for example.

Competitive markets make businesses work harder to produce goods and services for us at better prices. That’s fairly simple “capitalism 101.”

The most famous and wealthy capitalists, however, seem to be making their reputation and wealth by doing precisely the opposite – by seeking rarely to compete.

Warren Buffett, for example, is an intelligent, well-respected, genial billionaire investor. On a personal level, I’m a big fan. But does his brand of capitalism promote or hinder competitive markets?

One of his most famous pearls of wisdom is that investors should always look for companies with strong “economic moats”. His term to mean companies who are protected from competition in ways that will last a long time.

Peter Thiel, a founder of Paypal, Palantir and early investor in Facebook echoes a similar sentiment in starker terms. “Competition is for losers” he says, in his book “Zero to One,” instructing entrepreneurs that their goal should not be to compete, but to create monopolies.

From their perspective, this approach is logical. Competition competes away profits, putting that money back in the pockets of consumers. That’s why we like competition in the system, but why capitalist themselves (i.e. allocators of wealth) don’t.

In Capitalism, people like Buffett and Thiel are heavily incentivised to break competition.

Indeed, this is the entire business model of Silicon Valley venture capital which has created the first public trillion dollar companies. The entire model is based around the idea of finding and creating natural monopolies with network effects.

If our economic theory has a notion that competitive markets, as envisioned by Capitalism, are good, then it is always worth remembering that successful wealth accumulators within many markets will almost always be attempting to subvert competition.

The ones that avoid competition the best generally be the ones that accumulate the most wealth. This is one of the key tensions at the very core of Capitalism.