Marx said it first, essentially the flow of buyers need be more congested than the flow of sellers. The system is driven by slightly excess demand which covers the cost of setting up inventory facilities. Sell pays the cost of holding excess inventory in stability.
This is what the demand siders note, but it is a condition, not a process. In a contraction the economies of scale will again revert to an excess demand condition, but with shorter supply chains and fewer products.
It is the theory of economies of scale, value chain theory. A result of the supply and demand flow to be relatively independent at stability, there is no Pareto improvement once supply and demand appear relatively independent.
There is no fix that changes the stable partial equilibriums, they are selected from finite set of choices. If the goal is to increase market size the solution is to improve measurement in inventory flow. For example, strict cash flow accounting and a relatively independent bank which can signal stress early. A legislature that understands their endogenous limits. Recognize the long term, and unfair, imbalances.
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