Independent Institute Response To Phillip Hallam-Baker("networkexternality")

[Ken Brown]

Serious missed point alert for the Lizard  here!

lizard wrote:

> Apologies to Matt and the II, but from where I stand, the theory seems
> pretty sound. People buy thing because other people buy them. People are
> stupid. So it goes. Where Phill, the DOJ, and the rest of the
> left-liberals screw up is going from this obvious conclusion to
> "Therefore, government must point guns at people to make them make smart
> buying decisions." 

The point about the "network" effect is that it is suggested that there
is a natural monopoly in the supply of certain goods. When most other
people have one of two competing products then in makes sense to buy
that one for compatibility. So it isn't that *stupid* people buy
microsoft, but that *rational* people buy microsoft.  

This has nothing to do with the product or standard being "better", just
more popular. It could originate at random (the sums work like the sums
for genetic drift & founder effect  - maybe all economists should be
forced to read McArthur & Wilson. Or even better RA Fisher :-) but once
one way of doing things has taken the lead, there is a natural positive
feedback, and that one is likely to become the de facto standard. 
Bloody obvious really. Back in the 1980s when we all got our first word
processing software then we all got the ones our friends and colleagues
used so we could share floppies with them.  

It can be argued that MacOS was "better" than Windows (I'm not saying it
was, just that it can be argued that it was) or VMS "better" than Unix,
VM better than MVS, Token Ring better than ethernet, X400 better than
SMTP, ISO/OSI better than the ARPA Internet, Big-endian chips than
Little-endian, almost anything better than Novell Netware, paper tape
than punch cards,  Betamax than VHS, PAL than whatever the other kind of
TV is, driving on the left than driving on the right, broad gauge rail
than narrow gauge... what can't really be argued is that in  these
special cases once most existing users  go for one kind, new users ought
to go for the same one.  

If the defacto standard is owned by a private company, then there is a
monopoly. People who don't like monopolies may want to either liberate
the standard or confiscate the company.

That's what the argument is about - nothing to do with lefties thinking
people are stupid or educable.  Us lefties (& as far as I can tell I am
the only one contributing to cypherpunks at the moment) don't think
buying Microsoft products is stupid, or a matter of following fashion.
(We think that buying McDonald's is stupid but that's another point
entirely :-) 


> All of leftist 'thought' hinges on the highly dubious
> premise that you can MAKE people smarter, either by threatening to shoot
> them (Stalinist/Hitlerist socialism) or simply tying them up so they
> can't hurt themselves (modern 'liberal' socialism). Neither works.

Oh crap, you ignoramuses wouldn't recognise a Socialist if one but you
on the bum. Not that I'm offering.
 
> Capitalism tends to produce superior goods and services over time, but
> this isn't it's moral justification. If it was, I'd argue for a massive
> AI project designed to produce a super-computer which could use
> evolutionary algorithms to make optimized everything and control the
> factories.

You mean you would argue *against* the free market (which is what you
mean when you say "capitalism" - but don't worry, nearly all Americans
muddle them up so you are in good company)  and in favour of central
planning if you though the free market was morally better? Odd or what?

> The moral justification for capitalism is that it is based on
> individuals making their own decisions about how to spend the products
> of their own labor. If a lot of these decisions are illogical,
> short-sighted, emotionally biased, or self-destructive -- well, that's
> humanity.

No, that's the moral argument for free trade. It happens to be correct,
but that's beside the point.

> There isn't any New Socialist Man on the horizon, so we are
> much better off letting stupid people spend their OWN money on stupid
> things, rather than turning 'the means of production' over to these
> morons.

Who cares what the stupid people want to buy? Anti-trust laws are to
stop clever people buying what they want to buy.
 
> Want to know what happens when 'the people control the means of
> production'? Picture no art but painings of Elvis on velvet -- forever.

Prat.
 
> Is Microsoft on top because of stupid human buying patterns as opposed
> to superior software? Yeah, probably.

Much more likely it is just a random event. Someone had to be top of the
pile & whoever it was was likely to clean up. Actually MS still isn't
the largest computer company in the world - I think Intel, Cisco & IBM
(still) have more turnover. MS is just the most profitable because
software is almost free to distribute. 

> What should the government do
> about this? ABSOLUTELY NOTHING.

You may be right but if you are you don't seem to realise why. Tell me,
is ignorance bliss?

Ken