Re: Why Bill Gates Will Win

[rlande@UBmail.ubalt.edu]

  Charlie,
  
  Another basis for peoples' complaint against Microsoft (and in favor of
  antitrust generally) has to do with wealth transfers and the
  taking of property rights by firms with market power.  Suppose that we
  examine the legislative history of the antitrust laws.  Suppose that we
  conclude (as I have, in an article) that Congress, when it passed the
  antitrust laws, defined and gave that ill-defined property right that we
  call "consumers' surplus" to consumers. An anticompetitive cartel or
  anticompetitively acquired monopoly takes this property right from
  consumers by charging supracompetitive prices.  Since Microsoft or a
  cartel does not compensate consumers for this consumers' surplus, what
  they are doing is no different from theft of consumers' property.
  Hence the need for antitrust laws.
  
  Bob Lande
  
  On Fri, 7 Nov 1997, charles mueller wrote:
  
  >         I've removed the author's name from the communication below because
  > it was sent to me privately--in response to my post, Why Bill Gates Will
  > Win.  He takes me to task for not relating, in that post of mine, the other
  > side, i.e., why Bill SHOULD win.
  > 
  >         Charles Mueller, Editor
  >         ANTITRUST LAW & ECONOMICS REVIEW
  >         http://webpages.metrolink.net/~cmueller
  > 
  >                                              ***********************
  > 
  > 
  > Charles,
  > 
  > 	In your unpacking of the debate, you consistently neglected one point of
  > view:  namely, that it is _not within the purview of government_ to
  > forcibly affect changes in production for the purpose of maximizing
  > consumer welfare.
  > 	I don't suggest that this argument is legally germane to the Microsoft
  > case, which is a dispute over the particulars of compliance to an
  > agreement.  But.  If we're going to enter into the broader issues of
  > antitrust action, surely it is relevant that reasonable persons have
  > objected to the very idea of antitrust law.
  > 	The efficiency basis for anti-antitrust, while not the strongest possible
  > foundation, is nevertheless plausible.  The anti-antitrusters declaim:  How
  > can Janet Reno, the blundering anti-Holmes of the Whitewater investigation,
  > she who has produced nothing but a bit of scorched earth in Texas, decide
  > what direction the Byzantine software industry needs to go to benefit
  > consumers?  If the government has such omniscience, why doesn't it produce
  > the software itself?  Renosoft -- one shudders to think.
  > 	Related to the efficiency basis is the consumer choice basis.  How has
  > Microsoft become a monopoly in the operating-system market (pray don't tell
  > Apple)?  Was it born a colossus, throttling ever dollar from a captive
  > market?  Except for government fiat, _the only road to market dominance is
  > an enthusiastic market reaction_.  It is contradictory to say that
  > Microsoft is a strategic monopoly (a company with a lock on something _it
  > created_ that people now define as a _need_) and is, at the same time, the
  > inept producer of a product hopelessly inferior to what the consumer
  > demands.
  > 	The prosecution of Microsoft not only ignores past consumer choice (the
  > rush to switch from text-based DOS to GUI-enabled Windows), it also
  > traduces current consumer choice.  How?  As someone active in the
  > information technology industry, I can't tell you how many shops _insist_
  > on being Microsoft-only.  These people choose technologically inferior
  > Microsoft Outlook over Lotus Notes because _they want to minimize their
  > risk_ of being stuck with an application no-one services two or three years
  > hence.  To batter Microsoft until it is no longer able to offer consumers
  > this security, all in the name of consumer choice, is surely to be guilty
  > of a cruel irony.  
  > 	The third basis for anti-antitrust is partially prudential politics, but
  > is primarily moral.  Prudentially, it will not do to give government the
  > power to deligitamize voluntary transactions between free people.  The
  > venders want Microsoft Windows without Internet Explorer, at an affordable
  > price?  It is a legitimate want.  In a democracy, if people feel a
  > physical, non-personal want is legitimate and is not serviced by the
  > market, the mode of correction is subsidy.  It is not coercion.  We should
  > mark it as a grave event when the want of a consumer becomes the
  > government-enforced duty of a producer.
  > 	Shall we, by threat of jail or dispossession, force Bill Gates to make
  > specific changes to his product?  Why not decree that he must unveil a new
  > operating system every year (in Swahili, of course, to deteriorate his
  > market position and "help the consumer")?  Shall we void, by means of the
  > not-so-subtle gun ensconced in Reno's law, the agreement of one businessman
  > or businesswoman to pay another a set price for specific services?  
  > 	Article XIII, Section 1 of the US Constitution states in no uncertain
  > terms, "Neither slavery nor involuntary servitude, except as a punishment
  > for crime whereof the party shall have been duly convicted, shall exist
  > within the United States."  There is no exception to this prohibition on
  > utilitarian grounds -- our need most emphatically does not create a claim
  > on the work of others.  
  > 	Either we are all is possession of this inviolable right, or none of us
  > are.
  > 
  > 	The foregoing is the anti-antitrust argument, as competently as I can lay
  > it out.  It is, even it's advocates must admit, based on axioms which are
  > not self-evident.  The moral basis is particularly prone.  If one believes
  > that a citizen who has revolutionized the way we work and live is thereby
  > bound by our need for his gifts, that he is thereby deprived of
  > self-sovereignty over his work;  if men with guns are just in traducing the
  > agreements of freely trading citizens, then there is no basis to believe
  > that antitrust laws are immoral.  If the acclaim and trust of consumers are
  > of little note, then there is no reason to believe that antitrust laws are
  > patronizingly paternal.  If a woman who has never written a line of code
  > can decide what the software industry needs, there is no reason to believe
  > that antitrust laws promote inefficiency.
  > 	Hence, I readily admit that we are not compelled by logical certainty to
  > the anti-antitrust position.  But perhaps, Charles, you would agree that
  > these positions deserve a passing note in your expositions of American
  > industrial policy.
  > 
  > Just a passing thought...
  > 
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