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Re: Increasing Return Economics

  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
  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
  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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  email;internet: jbehrman@netropolis.net
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