The "positive feedback" presentation of increasing returns does not go
back "70 years" to something Alfred Marshal said. Marshal said just
about everything at one time or another. This recaps Hamilton's
"Reports", what he and Jefferson disputed, some of what the Civil War
was about, and most of what Marxists claimed England and Germany were
fighting over in this century. This it the stuff of the Infant Industry
Tariff or Free Trade.
I am, to confess, a <List Gesellschaft> man and not a Free Trader,
without however disavowing my Confederate and Democratic heritage
altogether, thank you.
There do seem to be "increasing returns to the scope, scale and
cycle-rate" of some economic enterprise, at the very least, temporarily.
However, ascertaining the cause and effects of such returns is a huge,
not at all well-understood problem of engineering and accounting, the
problem of allocating overhead costs to a production or development
process.
At the Strategic Level of analysis, ...
Attacking Microsoft for simply being big runs three, huge, how I lost
the Battle of the Somme, risks:
First, Microsoft can aver ever-increasing returns of scale, scope
and cycle by way of defense. They can force the DoJ onto the barbed
wire of cost-accounting and slaughter them with machine-gun fire.
Second, they can "lay smoke" and evade attempts by the DoJ to show
how they should be broken up.
Finally, they can give ground slowly, like telephone monopolies,
and evade attempts by the DoJ to break them up in a timely or
decisive way.
But, the big problem for Microsoft is what if they win? What if they
become so caught up in their own size and so impressed with their own
lawyers' arguments that they fall prey to their own giantism and the
logistical curve? What if they fail to divide or to recombine in ways
that maximize the stockholders' value rather than their own lawyers',
bankers', flacks', and managers' parastical exactions? What if they
become like power and telephone companies, collectors of indirect taxes
for Algore-type nomenklature? There are worse things than General
Silver's terms.
At the Tactical Level of analysis, ...
It is better to start where Hans Reiser does, with the technical
requirements of an "open environment". This is an "indirect approach". I
believe it could lead to a cascade of quick and decisive, if small,
victories for the government, which is to say, for the American people,
the General's sovereign, not client. Moreover, such discipline would not
do Microsoft any great harm, which is not, to my mind, the object of any
of this anyway. It would allow all of us to move on to much more
important questions than helping Bill Gates' grow up or distribute his
wealth.
Actually, I believe General Silver, unlike General Morales, is taking
the correct approach and has found what some of us of, well, Hanseatic
persuasion, even in economics, call the <Schwerpunkt>.
As I use them, angle brackets ,<>, are not a horrid html tag but the
best I can do for italics or Fraktur in the plainchant of list-service.
Thnx again to TJM for the URL and PLAYON JRBehrman sends.....
Thomas J. Mowbray wrote:
> Papers on Increasing Return Economics are at this site:
>
> http://roscoe.law.harvard.edu/courses/techseminar96/
> antitrust/references/econreferences/
>
> (It's all one URL)
>
> Best Regards,
>
> Tom
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