RE: what if microsoft disobeyed the breakup?

Date: Mon Jun 12 2000 - 20:00:19 MDT

Matt Gingell wrote:
> No, it isn't force. But what's wrong with drawing an analogy between
> physical force and economic force: both can reduce the efficiency of a
> market by artificially restricting choice. Microsoft certainly isn't
> going to shoot me if I don't buy Windows, but in an unregulated market
> they can make it infeasible to do otherwise. More importantly,
> allowing them to do so engineers a fitness function where size and
> brutality are selected ahead of price and quality. Do we want a
> product to do well because it's tied to something, or because it best
> fulfills some sectors needs?

What makes you think antitrust law is an improvement? As I've already said,
the market does tend to correct these situations on its own, and government
intervention dramatically undermines the natural corrective process. I want a
good argument for thinking antitrust laws will be better than the market's
natural corrective mechanisms (and, since we are also trampling on private
property rights and inviting a morass of anti-competitive regulation, it needs
to be a very good argument).

> And it's absurd to equate antitrust with a system where government
> arbitrarily interferes with every contract and the terms of every
> business agreement.

Why is it absurd? Unless you have avery strong demarcation between
permissible and impermissible interventions, a government agency charged with
enforcing antitrust law will naturally become more and more interventionist
over time. The end result is someting like the SCC regulation of commodity
trading - an omnipresent blanket of senseless regulation that strangles
everything it touches.

> I'd agree with you here, that was probably a bad example. I'd add
> though that reforms in intellectual property law might provide an
> optimal solution to natural monopolies in the software industry: 5
> year copyrights, for instance, would allow a vendor to make a
> reasonable return on development investment while lowering the barrier
> to entry for competitors to something surmountable. This year, for
> instance, we'd be seeing the first wave of Windows 95 derivatives. MS
> would have a huge head start, as they should, but we'd actually start
> seeing a bit of diversity.

I'd be in favor of a major reworking of intellectual property law - it is
pretty obvious that what we have now does not deal well with the realities of
modern technology. But once agian, this is not a problem with free markets. If
you think the current intellectual property regime stifles innovation the
answer is to change the relevant laws, not to go around confiscating patents
from anyone who seems to benifit from them "too much". Government agencies are
far too irresponsible to be trusted with that kind of authority.

> That's a valid argument - regulation could help, but government can't
> be trusted to do more good than harm. I live in a rent controlled
> apartment but I'm ambivalent about whether that does any good or it
> just discourages new housing construction. It seems though that
> letting an owner charge a new tenant whatever he wants then
> restricting the pace at which he can increase it is a reasonable
> compromise. You try to approximate the best of both worlds, find a
> working medium between equally compelling arguments.

Yes. And before we pass such a law, we should demand actual evidence that it
make things better. Almost our entire current regulatory regime was enacted on
nothing more substantial that wishful thinking, (or worse, a blind urge to "do
something" in order to curry favor and/or look important) and almost all of it
does more harm than good.

> Do you find not being able to yell fire in a crowded theater an
> ominous trend? There's nothing arbitrary or senseless about the
> ruling, disagree with it though you might. Whether it's expensive, or
> whether it'll just be another MS stock split, only time can tell.

I call the MS ruling arbitrary and senseless because it is not based on any
sort of objective standard. If I don't want ot be arrested for shouting "fire"
in a crowded thatre, all I have to do is refrain from doing so. In contrast,
there is no course of action Microsoft could have taken that would have
protected it form an antitrust suit. The laws are so vauge that a hostile
judge can plausibly find any successful business guilty of 'illegal'
activities, and impose pretty much any penalty he feels like levying. That
isn't justice.

> -matt (Is this as bad as the gun debate? I can't tell from the inside...)

Oh, it isn't nearly as bad. We aren't calling each other names, and neither of
us is posting ten times a day, so I think we're in pretty good shape.

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