Fear, loathing, and Bill Gates (fwd)

[Declan McCullagh]

---------- Forwarded message ----------
Date: Mon, 26 Jan 1998 14:14:51 -0800 (PST)
From: Declan McCullagh <declan at well.com>
To: politech at vorlon.mit.edu
Subject: FC: Fear, loathing, and Bill Gates

********

Date: Wed, 21 Jan 1998 16:42:08 -0500
From: Don Bx <dboudreaux at fee.org>
To: declan at 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 at cavern.uark.edu>
To: Declan McCullagh <declan at well.com>
Cc: politech at 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 at Radix.Net>
To: declan at 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 at aol.com
To: declan at 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 at fee.org>
To: declan at 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 at vorlon.mit.edu with this text:
subscribe politech
More information is at http://www.well.com/~declan/politech/
--------------------------------------------------------------------------