"A Beautiful Mind" and the Myth of the Market

Over the weekend I watched Ron Howard's film A Beautiful Mind, the story of John Nash. Nash shared the 1994 Nobel Prize in Economics for his contributions to game theory.

From Nash's Ph.D. dissertation:
"The main mathematical result is the proof of the existence in any game of at least one equilibrium point."

In John Nash and a "Beautiful Mind", John Milnor makes the point that,
"In all of the applications one very important corollary
must be emphasized: Although equilibrium theory, as developed by Nash and his successors, seems to provide the best-known description of what is likely to happen in a competitive situation, an equilibrium is not necessarily a good outcome for anyone.
In contrast to the classical economic theory of Adam Smith, where free competition leads to best-possible results, and in contrast to classical Darwinian theory, where natural selection always leads to improvement in the species, the actual dynamics of unregulated competition can be disastrous."
[emphasis is in the original]