RE: what if microsoft disobeyed the breakup?

From: phil osborn (
Date: Wed Jun 07 2000 - 23:11:25 MDT

>Subject: RE: what if microsoft disobeyed the breakup?
>Date: Tue, 6 Jun 2000 14:53:05 -0500
"Billy Brown" <> Wrote
>phil osborn wrote:
> > As an anarcho-capitalist, objectivist libertarian from the '60's on, it
> > pains me deeply to actually find myself even close to the same side of
> > things as Janet Baby-killer Reno, but the fact is that if you were
> > aware of how badly the market has been served by the MS mob, and why,
> > hopefully would never have made such silly remarks. MS, to me,
> > the triumph of a fundamentally idealess moneyed yuppy oligarchy in using
> > corrupt system to sell amazingly shoddy products to an ignorant market.
> > they didn't even invent that!
>If your analysis is correct, the very concept of anarcho-capitalism is
>fundamentally flawed. Any society based on personal freedom must be built
>the presumption that individuals are largely capable of making their own
>decisions, and that leaving them free to do so is the best available
>approach to running an economy. If, OTOH, individuals are fools and
>experts can make better decisions than the markets, then the technocratic
>socialists are right to demand control of the economy.
>One of the hard parts of advocating freedom is realizing that you,
>personally, are not exempt from the arguments we have long advanced against
>the centralization of authority. If a panel of experts can't be trusted to
>decide which product we should all use, neither can a panel of one. If a
>free market makes a decision you think is stupid, odds are that you are the
>one who is wrong. At the very least, you should assume that the result is
>due to differences in individual desires, needs, abilities and/or
>information, rather than some kind of sinister plot.
>Claims that the "wrong" product has won out in a free market are
>among supporters of the products that lost, but they almost invariably turn
>out to be incorrect.

"Let the market decide?" Gawd, I hate to think of all the times that I've
heard that used by anarcho-capitalists or limited-crime libertarians to shut
down an argument. What if Henry Ford had listened to one of them?

Who is this "market?" Is it some creature like the "monster from the id?"
Techno-magically hypostacized into a ubiquitous all-knowing uber-soul? What
about bustles? What about women's fashions in general? (or men's - as if.)

The fact is that markets are hardly the efficient calculators of marginal
return that ivory-tower agorist theory would have. Humans have an ENORMOUS
overcapacity for survival. Throughout most of history most humans have
worked 3 or 4 hours per day and played or fought the rest of their waking
hours. This hasn't changed in the "modern" corporate environment. Most
companies that I've looked at function with huge profit margins which they
then fritter away or waste through idiotic management and internal politics.

The problem with the situations under discussion is two-fold. First,
accurate information about highly technical new subjects is always likely to
be expensive. Without a track record, how does the layman or non-technical
educator, bureaucrat or manager judge who is an expert? They look to brand
as an indicator. They look to what everyone else is buying. They ask their
friends. If they're a middle manager, or typical purchasing bureaurat in a
state function, then it's much more critical not to make a mistake than to
do the best thing.

Thus, as I have pointed out, it was the state institutions that bought Apple
II's, by and large, financing a self-perpetuating Apple snowball as they
cultivated the erroneous image of being "the educational computer." This
hardly reflects a "free market" choice, so it really doesn't even bear upon
your objection. When we look at the initial success of the IBM PC, we see
more irrational - specifically chaotic - factors entering the picture. The
PC was not nearly as good as many other machines on the market.
Furthermore, MS-DOS was a really weak OS, actually scaled down from the
superior CP/M, which already had a fairly mature market and a good track
record among the early adopter businesses. The ONE thing that the PC had
was the brand - IBM.

The brand made it safe for managers - and again, especially purchasing
bureaucrats, and most especially STATE purchasing bureaucrats - to jump in.
IBM even used the slogan "nobody ever got fired for choosing IBM."
As in positive feedback systems in general, it is a very tiny distance from
control to runaway feedback and Mandelbrot economics. If you're waiting for
safety in numbers to jump in and that's a major decision factor, then you
can expect long periods of nothing bordering sudden explosions - often only
reflecting a minor change in perception resulting, for example, from clever
marketing aimed at that block of buyers.

Then there is the factor of institutional control on the production side -
especially via the FDIC banking cartel. As I read it, they took over Atari
because Bushnell was too risky - and put a VP from Warner's movie division
in charge. They got rid of the Woz, then Jobs, and put in a soft-drink
salesman. They put a banker directly in charge of Commodore. In all three
cases, these moves virtually destroyed the company in the long run. But the
reality is that profits are not the bottom line for these people.

Control is where it's at. If you can CONTROL a company, you can send its
share prices up or down at will. And then your buddies who control other
companies can get the word a little early and make enormous profits either
going up or down. Of course they might drop a few hints your way every now
and then as well.

There are stupid markets fleeced by mega-scale con artists. Purchasing
decisions in these markets are made by people who have no real life and
death stake in doing the best thing - just the "safe" thing - that for which
they can't be blamed. Then there are smart markets driven by people who
actually personally depend upon making accurate purchases.

For example, the overwhelming majority of private users and schools who
bought C64s instead of Apple II's. Or the scientists and cutting edge
scientific research institutions who bought Amigas in bulk - eg., Livermore
Labs. Or the TV post-production or CG people, such as Foundation Imaging or
DreamWorks that jumped ship from SGI to the Amiga/Lightwave/Toaster package.
  Or the desktop publishing, print graphics community, which is still
solidly Mac - NOT PC!

Or, what about LINUX? The LINUX people have been saying the same sorts of
things that I have for years now. And they're finally winning a major
market share as purchasers move up the learning curve. BeOS is another
example. It probably outclasses everything else out there as a personal
computer OS. But the Apple controllers cancelled the deal at the last
moment, because they couldn't control Gasse. He was too good and wanted too
much control himself. (BeOS may make it yet, however, under its own power.)

There are a host of additional mistakes involved in your position - more
than I can possibly cover here. Simply letting people make choices does not
make for an efficient or intelligent market. (Gold went to over $900 around
1979, then dropped to $600, then to $400, all in a matter of months. Which
of these markets was right?)

The answer to these problems is not the state, however. In fact, often you
find that the distortions of judgement involved in mass market decisions
reflects a market already distorted by state intervention - as in the
banking cartel, or the artificial advantages and immunities that
corporations - creatures of the state - receive.
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