Being less efficient and being outcompeted are not synonymous.
We live in a system that overtly rewards and encourages people to organize things such that they’re rewarded for extracting excess value from workers and syphoning it to themselves and their investors.
Of course companies that do that are rewarded, because it’s designed that way.
That doesn’t make it more efficient, and it certainly doesn’t make it right.
Also, you’re failing to consider state owned enterprises, which is particularly popular in socialist democracies.
You’ve also entirely failed to explain why contributing money to an enterprise should entitle you to live off others work indefinitely.