If using the market is costly, why does it exist? Why isn't the economy just one giant firm?

Using a market is costly but it is participatory as well. The transaction costs paid to use the services of a market also grant us, the individuals of an economic system, the necessary economy liberty to choose our activity, and the use of our resources. This freedom also leads to equality for economic agents in the sphere of a market. If a market is abandoned in favor of an economy that operates like one giant firm, there will be an acute concentration of resources and thereby, the lethal concentration of power in the hands of one or a few.

Resources are scarce. This scarcity does not allow us to indefinitely produce anything. One of the fundamental economic conundrums is the conundrum of what to produce. Although humans have the same basic necessities, the degree of necessity, wants, and the quantities of goods and services required, differ. If there is one big firm that produces and distributes everything and consumers are not given the choice but are compelled to receive what is given, freedom will be entirely eliminated and the welfare of citizens will be severely compromised. There will no incentive to indulge in any economic activity as no fruits can be reaped from the effort. Competitiveness fuels the zeal to keep developing. If there is no competition but a monopolist for the entire economy, there will be no technological growth. The economy will fail to sustain the long run.