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Negative feedback applied on its own tends toward complete stasis, whereas positive feedback on its own leads to runaway burn-out. In the real world, all complex systems - economies, the climate, living organisms, perhaps even whole galaxies - exist on the fine edge between these two states, and that's what enables them to change and evolve without completely falling apart. An economy that was totally controlled by negative feedback could never innovate.

What happens to an economy where positive feedback comes to predominate isn't known yet, because we're still in the middle of that experiment. Positive feedback is so sensitive to starting conditions that its results may be unpredictable, effectively random. The idea that market forces always select the best among contenders would only be true for an economy in equilibrium, and in a real economy chance events such as who skipped a crucial meeting to go flying may decide which product we get locked into for decades (think Intel vs Motorola, Blu-ray vs HD DVD). The upside is that upstarts like a Google or a Facebook can be elevated out of nowhere to knock out giants. Boring it ain't...