The Idea of Perfect Competition and Equilibrium in Neo Classical Economics

The idea of perfect competition and equilibrium is based on nothing, right? The classical economists like adam smith, ricardo and marks developed their theories by looking at how capitalism actually functioned. Mchumpeter calls this corespective pricing, where big monopolistic firms recognize that they have nothing to gain from entering into a price were with other competitors. And so the more we try to make the markets freely itive, the more of a race to the bottom it is.