---------- Forwarded message ---------- Date: Mon, 26 Jan 1998 14:14:51 -0800 (PST) From: Declan McCullagh <declan@well.com> To: politech@vorlon.mit.edu Subject: FC: Fear, loathing, and Bill Gates ******** Date: Wed, 21 Jan 1998 16:42:08 -0500 From: Don Bx <dboudreaux@fee.org> To: declan@well.com Subject: Re: More on Don Boudreaux "Calm Down" letter on Microsoft Declan, I had a thought that I must share. In reflecting upon the genuine hatred and fear that people increasingly have for Bill Gates and Microsoft, it occurred to me that this hatred and fear have much in common with the hatred and fear stirred up a decade or so ago against Japan. In both cases, people proved their affection for Japanese goods by buying them, but they also grew leary of Japan after being barraged on the air-waves by idiot pundits who insinuated that Japan had some sort of recipe for taking over the American economy. Economic serfdom was near, avoidable only by trade restraints. And, of course, behind this fear-mongering were U.S. rent-seeking firms that sought to be relieved of having to compete as vigorously as otherwise. Needless to say, Japan was never a threat to "take over" the American economy, or to harm it in any way. The same is true of Microsoft (as long as it doesn't rely upon government favors). The fear and hatred in both cases -- against Japan in the 1980s and against MS today -- is illogical and uninformed. But it is, for MS, increasingly real. Don ********* Date: Thu, 22 Jan 1998 23:02:07 -0600 (CST) From: Mac Norton <mnorton@cavern.uark.edu> To: Declan McCullagh <declan@well.com> Cc: politech@vorlon.mit.edu Subject: Re: FC: More on Don Boudreaux "Calm Down" letter on Microsoft Let me see if i get this right:DOJ got guns , MS don't got guns, therefore I'm for MS. Is that it? Gee thee's some heavy intellectual discourse going on here, you betcha. MacN ********* Date: Wed, 21 Jan 1998 16:23:25 -0500 (EST) From: Donald Weightman <dweightman@Radix.Net> To: declan@well.com Subject: Re: FC: More on Don Boudreaux "Calm Down" letter on Microsoft DB doesn't seem to know much about antitrust -- it *does* scrutinize strongarm tactics when wielded by someone with market power, as MSFT almost certainly has. The claim about harm to the economy is pretty far ranging for someone who seems to have no expertise in the field. As an example of where antitrust has done good, I'd point to the gov't-mandated restucturing of the electric utility industry in the '30's (actually administered by the SEC), which can be argued to have laid the groundwork for the huge productivity gains that industry made for the next three decades. Cheers Don ******** Date: Mon, 26 Jan 1998 16:59:05 EST From: JEisenach@aol.com To: declan@well.com Subject: Re: FC: "Calm down!" -- Don Boudreaux letter to NYT on Microsoft Now that Microsoft has given up its inexplicable defense of an indefensible licensing arrangement, it may be a lot easier for everyone involved to "calm down." Calming down should not, however, mean giving Microsoft carte blanche to use its undeniable market power to shape the future of the market for software. What it should mean is devising a workable policy for applying sound antitrust principles to the software business -- and that's a very big task. Many of Microsoft's arguments have merit. It is true, for example, that rapid innovation and low (physical) capital requirements for entry make its monopoly more vulnerable than it otherwise might be. However, other arguments Microsoft has offered -- for example, falling prices -- are pretty lame. Falling relative to WHAT? is the relevant question (look at industrial prices during the second industrial revolution -- which went through long periods of decline despite the emergence of the steel, oil, railroad, etc. trusts). As for Microsoft's "opponents," their case has a fair amount of appeal -- and it's not just visceral. Microsoft clearly has market power in the market for operating systems. Operating systems are required for personal computers to operate. Microsoft has exercised its market power pretty aggressively. And, it shows every intention of continuing to exercise its market power to delay innovations that threaten it and to extend its dominant position into future generations of technology. I don't think many people dispute anything in the previous paragraph. What people ARE concerned about, of course, is the potential for an overly intrusive and regulatory approach by government that could slow down innovation -- a policy built around the idea of protecting competitors rather than protecting competition. I frankly haven't seen Joel Klein say anything that suggests they are headed in this direction -- but I sure agree that "eternal vigilance is the price of liberty." Now that we all have a chance to "calm down," my hope is that a rational debate can emerge on the question of how the goals of antitrust law (i.e. a market free of impediments to competition, regardless of their source) can best be pursued in the software/computing business. And, I'm not prepared to concede that letting Microsoft exercise its market power without any restraints at all is the best we can do, even in this very imperfect world. To close with a plug: on February 5, The Progress & Freedom Foundation will be hosting a conference at the Four Seasons Hotel in DC on this very topic. Participants include a virtual "who's who" of the market-based "Chicago school" of antitrust economists and lawyers -- Nick Economides, Benjamin Klein, James C. Miller, Tim Muris, Dan Oliver, Bob Tollison, Robert Willig, etc. It's open to the public and reasonably priced. For information, see WWW.pff.org. ******** Date: Mon, 26 Jan 1998 09:02:15 -0500 From: Don Bx <dboudreaux@fee.org> To: declan@well.com My comment about the DOJ having guns and Microsoft not has drawn fire. Fair enough. But I defend my point, which is this: Microsoft gets customers only by offering them deals that they are free to accept or reject. No coercion is involved. If you don't buy MS products, no one threatens you with imprisonment or violence. In contrast, when government regulates commerce (beyond the enforcement of contracts and traditional tort and criminal law) it dictates the terms of exchanges -- ultimately at the point of a gun -- that we cannot be certain are mutually advantageous. When A and B exchange voluntarily with each other, we can be sure that both A and B each believes himself to be better off as a consequence of the exchange. When a third party wielding the threat of coercive power prevents these voluntary exchanges -- or imposes contract terms that would not otherwise be part of these exchanges -- we cannot be certain that the exchanges yield as much mutual benefit as when these exchanges are voluntary. Government possesses the monopoly authority to initiate coercion. This is an awesome power that in a civil and free society should be used sparingly. It should not be used to prevent firms from engaging in peaceful and voluntary exchanges with adults. Don Boudreaux ******* -------------------------------------------------------------------------- POLITECH -- the moderated mailing list of politics and technology To subscribe: send a message to majordomo@vorlon.mit.edu with this text: subscribe politech More information is at http://www.well.com/~declan/politech/ --------------------------------------------------------------------------