Some Conservatives And Microsoft
©2000 All Rights Reserved
As I wrote this column using Microsoft Word on my G4 Power Mac computer, running on its newly installed Mac OS9 operating system, I had to chuckle.
You see, in the February 7th issue of National Review, Robert Bork once again declares that Microsoft has a "monopoly" in operating systems. This monopoly, in turn, is protected by an "applications barrier" that "makes it impossible for competitive operating systems to thrive." One has to wonder, how can a so-called monopoly exist when I'm typing on a machine running without a Microsoft operating system, and offering me the opportunity to purchase some 12,000 different applications?
For good measure, Bork asserts, "Microsoft bought rather than invented its most important technologies and deserves credit not as an innovator but as a marketer." This, I assume, is some kind of an attempt to belittle Microsoft. In reality, business success requires great skills in marketing. You can create the most innovative product known to man, but if you don't know how to sell it, what's the point? Businesses obviously compete when it comes to creating new and improved products and services, and when it comes to selling those wares. Microsoft, as a global leader in operating systems and software, has proven itself to be a formidable innovator and marketer.
In addition, Bork engages in the same shameful spin, just as the Justice Department has, when declaring, "Regulation of this industry is probably the worst of all possible courses..." What is antitrust enforcement, but just another form of government regulation? Bork should take his own advice when later writing, "What we need now is less slogan-mongering and more thoughtful analysis of a complex topic."
Bork also boldly states that "there is no viable substitute for Windows. Manufacturers must have it or shut down." Again, Apple's shareholders and customers--along with investors who have driven up the price of RedHat Inc., which supports a Windows alternative known as Linux, and VA Linux, which makes PCs running on Linux, since their IPOs--might have a different view of the future. And that is the critical issue at hand--the future.
The U.S. Department of Justice, the state attorneys general involved in the Microsoft case, and Mr. Bork believe that they know how the PC industry will and should develop. As preposterous as it may seem to think of government lawyers and bureaucrats dictating how the computer industry proceeds, that is fundamentally what lies behind the antitrust case against Microsoft.
Inexplicably joining Mr. Bork is another member of the conservative/free-market community. In late January, the Progress and Freedom Foundation (PFF) published a report by the group's vice president for research, Thomas Lenard, entitled "Creating Competition in the Market for Operating Systems: A Structural Remedy for Microsoft."
PFF's Lenard simply takes Judge Jackson's "Findings of Fact" asserting that Microsoft is a predatory monopoly as gospel truth, and then offers a rather elaborate proposal as to what the government should now do with Microsoft. He suggests spinning Microsoft into four separate companies--three would each get the company's operating system products, and the fourth would control Microsoft's other applications. Once again, we have a purportedly free-market group laying out an agenda for how the government should dissemble a business, and thereby hold formidable sway over the future of the computer industry.
The ultimate sources of such apostasy by Bork and PFF are their embrace of antitrust law and their rejection of property rights. For some reason, antitrust regulation has been represented as a bulwark of free markets. In reality, antitrust regulation allows the government to overrule decisions made by consumers in the marketplace. If consumers reward a business that serves their needs and demands best with considerable market share, why should government bureaucrats supplant such decision-making? Notions of predatory pricing and a true monopoly--i.e., one seller facing no current or future threat of competition--is nothing more than an economic fiction, without precedent in the real world.
As for property rights, why should the federal government be able to tell a private company, that gained its market share by serving consumers, how it should operate and be structured? From a true free-market perspective, the answer is simple: The government should not be allowed to do so, and such actions should be abhorrent to every fiber of free-market beings. Microsoft or any other private company should be able to sell its products as it deems appropriate (barring fraud of course).
For the sake of consumers, government should concentrate on breaking down real monopolies--those created and run by government, like public schools and the Post Office--and leave Microsoft alone to compete against its many current and emerging rivals.
Raymond J. Keating is Chief Economist of the Small Business Survival Committee, and co-author of the new book, U.S. by the Numbers: Figuring What's Left, Right, and Wrong With America State by State. Mr. Keating also co-authored D.C. By the Numbers: A State of Failure, and has written more than 300 policy studies, book reviews, and articles published in such periodicals as The Wall Street Journal, Investor's Business Daily, The Journal of Commerce, The Washington Times, Newsday, New York Post, Insight, The Freeman, Human Events, and many more. He regularly testifies before the Congress, and is an experienced and sought-after spokesman on a wide range of political and economic issues. He is currently at work on his second book tentatively titled New York By the Numbers: State and City in Perpetual Crisis.
