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Return Economics

Thnx fr ths post. Will revrt if I can trace wsj refs. Pls post whatever you find.

Strategical and Modular Economics

My own view is that the economics of digital media, ie storage, transmission and switching, can be correctly analyzed in strategical terms, a sort of macroeconomics, and in modular terms, a complementary sort of microeconomics. I suspect my analysis overlaps return economics in some appreciation of interleaved economies of scope, scale, and cycle, a sort of three-body problem common to the union set of technology markets and market enterprise.

My question, relative to my own analysis or any other, is whether what anything as pedestrian economics can say really bears decisively on the strategical, political, and popular issues raised by Microsoft's aggression. It may be that century-old laws concocted by rude farmers, merchants, and mechanics a century ago in the context of coal-fired railroads and steam-ships still apply pretty much straightforwardly.

We pretty much know what a tie-in sale, a conspiracy, predatory pricing and boiler torts are. The jails are full of low-class or non-white people who prey upon even lower-class and less-white people with what Dragnet used to call "bunko" and consisting of what Microsoft seems to do, albeit in their white-bread, nerdy way. Off-hand, I am not sure why rich kids used to getting mama and daddy to fix their traffic tickets should be exempt from the law generally. I know that the PC and the Internet and so on have changed almost everything, but I wonder if the more things change, the more they stay the same.

I am a fancy-pants economic consultant who would love to get in on either side of the Microsoft litigation at my usual hourly billing rate. But, as just a plain, old Texan, I am not sure but what Microsoft should not be given what Orrin HATCH would recognize as a fair trial in the morning and be hanged a little after noon for simply and flagrantly doing exactly what they are accused of doing for pretty much the old-fangled reason of getting a lot of money in a hurry with less actual work than other "low-bandwidth" folk might have to engage in to achieve the same result.

The fact is that hardware outfits in Texas could make more money by buying a cheaper DOS/Windows upgrade like Win95 without the cost of IE bundled in and by reselling the sort of build-to-order systems people want and, apart from Microsoft's oppression, get from Dell, Compaq, IBM and other Texas companies. Texas firms should be free to bundle IE or Doom or whatever or not as they see fit, pay a marginal cost or not, in order to get and gain a marginal profit or not.

What amazes me in all this is the sheer laziness or cowardice of the Attorney General of Texas. He has stood around with his finger up his ass while firms like Microsoft and Intel engage in acts clearly detrimental to Texas commerce and industry. His fine, old elected office has long been empowered and expected to take action against those as would violate common carriage and anti-trust laws that Texans pioneered. However, the last big case here was brought privately by a coal-slurry pipeline against a conspiracy of railroads. The pipeline prevailed and got about a billion-dollar verdict. But, the Attorney General of Texas was a pathetic spectator then as, I suspect, he will remain in present or future action against Microsoft.

Law, Economics & Engineering

I wish economists and engineers were in the driver's seat when it comes to action against Microsoft. But, the best chance for that slipped by when the FTC failed to act some time ago with the sort of rather simple measures that would have facilitated more competition then, less litigation now. But, the FTC was more lazy and cowardly then than even the Texas Attorney General is today. All we are looking at, in the decrepit FTC and Texas AG's Office, are a bunch of government lawyers looking to get into private practice by sucking-up and copping-out.

The one thing I obviously identify with is Microsoft's complete contempt for the sort of lawyers they have had to contend with up to now: Clintonite fund-raisers, IBM's thundering horde of bloody-hands defense lawyers, and, of course, all those intellectual property lawyers just like themselves at Borland, Sun, Novell.

No wonder the Microsofties feel invincible. They have never been eyeball-to-eyeball with a Texas Trial Lawyer or, for that matter, an old-style SEC lawyer. So, they are the Little League Champs. Big Deal.

Nader can whip 'em, if he has still got any spit or piss left.

Good Luck and PLAYON JRBehrman sends.....

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