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Can Antitrust Handle Bill Gates?
Bill Gates, whose personal fortune has reportedly just reached $40
billion (up from a modest $18 billion in '96), is currently being celebrated
as the embodiment of monopoly "efficiency" in America. The U.S. stock
market--reflecting a veritable tidal wave of enhanced "stockholder value"
across our industrial landscape--has surged past all prior records. CEOs
are taking home yearly compensation "packages" in the hundreds of millions,
thanks to stock options that give them a cut of the "profits" realized on
their watch--generated largely, a la "Chainsaw Al," by laying off workers
and reducing wages. Put somewhat bluntly, we're witnessing a spectacular
transfer of wealth from workers to stockholders. All that increase in
"stockholder value" that's fueling the current stock market "performance" is
nothing more than a redistribution--thanks to U.S. negligence in enforcing
its antitrust laws--not a real increase in national wealth.
So how do profits--as in Bill Gates' $40 billion and those reflected
in the Dow 8,000 record--relate to national prosperity for the U.S. as a
whole? So far as I know, Adam Smith stands unrefuted on the INVERSE
relationship between the profitability of a nation's corporations and the
wealth of its citizens as a whole:
"But the rate of profit does not, like rent and wages, rise with the
prosperity, and fall with the declension, of the society. On the contrary,
it is naturally low in rich, and high in poor countries, and it is always
the highest in countries which are going fastest to ruin."
"Going fastest to ruin?" Ah, yes. America didn't know what to do
about John D. Rockefeller's oil monopoly in the '90s of the last century and
it is similarly in the dark as to what to do about his reincarnation in the
'90s of this one. In both cases a sociopath has been allowed to stand
astride and strangle the dominant industry of his day, oil in Rockefeller's
century, computers in Gates'. It was not "technology" that gave old John D.
his economic empire--it was an army of high-paid lawyers he had bought and a
spineless Justice Department that let him get away with it. Today Bill
Gates is working the same scam. A competent and honest Justice Department/
FTC would have long ago cut his 80% share of the operating systems market to
10% or so--and his fortune to maybe a couple of million. Nobody makes a
billion in a competitive market. Notice that, in the broader computer
industry itself, the largest firm (Compaq) accounts for some 12% and reports
quite modest profits--hardly the stuff of social revolution.
That America has allowed a nerdy twit like Bill Gates--with the help
of a few dozen over-paid lawyers--to take over the greatest industry of the
21st century is a national disgrace. FDR gave us the formidable Thurman
Arnold as his chief trustbuster, one who put competition back at the top of
our national economic priorities. Clinton has given us, alas, a senator's
wife (Anne Bingaman) to sit in Arnold's chair; her successor at Justice,
Joel Klein; and Robert Pitofsky, the weakest FTC chairman in history. All 3
of Clinton's antitrust appointees bring to mind that famous presidential
comment on his worst Supreme Court appointment: "I've known bananas with
more backbone." Thurman Arnold and a couple of his assistants--before an
honest judge and jury--would have trimmed at least $29 billion off Bill's
net worth before he had received his first dividends. But the fault is not
ultimately his, any more than it was John D's in the last centrury:
Sociopaths are always with us; it is society's responsibility to prevent
them from doing their revolting thing. The guilt for Bill Gates' thefts is
not in the last analysis his but that other Bill, the one who killed
America's anti-monopoly policy via his selection of 3 weak-kneed antitrust
appointees, Bingaman, Klein, and Pitofsky.
Charles Mueller, Editor
ANTITRUST LAW & ECONOMICS REVIEW