More of the Same

by Kieran Healy on March 24, 2004

Henry’s post on Microsoft as a monopolist is generating a lively discussion. A side-point popped up that I think is worth discussing. As a libertarian, Micha Gertner doesn’t like Henry’s argument that “sometimes (as here) the maintenance of competition requires vigorous state intervention”. Micha asks,

So the solution to a monopoly is … a monopoly? […] Henry’s proposed solution—vigorous state intervention—is no solution at all; it merely sweeps the problem under the rug.

Leaving aside the empirical details—Henry isn’t arguing that the State become a manufacturer of operating systems, Micah equivocates in his use of the word “monopoly” and also understates heroically when he says “the only advantage Microsoft has over Mozilla in this respect is that Internet Explorer comes preinstalled with the Windows operating system” —I just want to focus on Micha’s implication that Henry is arguing in a circle. As it turns out, this kind of argument is a mainstay of social theory. And libertarians are the people most likely to make it in other contexts, as with the claim that the solution to a market failure is more markets. That is, when they acknowledge the reality of market failure at all, free-marketeers often want to argue that the problem isn’t that the market has run amok but that it hasn’t been allowed enough room to work its magic. For example, a market failure in one area—say, negative externalities due to pollution—can be remedied by introducing another market—say, for pollution credits.

There are two closely related ideas at work here. The first is the notion that society can be a self-regulating system. The decentralized market is one version, developed in various ways since Adam Smith. There’s also a hierarchical version. In the twentieth century its found in cybernetic theories of feedback-governed systems, but it can also be traced to the organic conception of the social order found in Durkheim, for instance, not to mention even older versions of the corporate, complementary social order that go back to feudalism. There are important differences between these, of course.

The second idea is narrower and stronger—that the cure for what ails you is more of the same. This “hair of the dog” view is found in strong versions of market theory, but it also has a political analogue. DeTocqueville argued that democratic societies, founded as they are on principles of equality, tend to encourage selfishness and indifference to one’s fellows. “Equality places men side by side, unconnected by any common tie … [which] makes general indifference a sort of public virtue.” This encourages despotism, as the despot “easily forgives his subjects for not loving him, provided they do not love each other.” The solution to this problem, DeTocqueville argues, is more democracy rather than less:

The Americans have combated by free institutions the tendency of equality to keep men asunder, and they have subdued it. The legislators of America did not suppose that a general representation of the whole nation would suffice to ward off a disorder at once so natural to the frame of democratic society, and so fatal: they also thought that it would be well to infuse political life into each portion of the territory, in order to multiply to an infinite extent opportunities of acting in concert for all the members of the community, and to make them constantly feel their mutual dependence on each other. The plan was a wise one. The general affairs of a country only engage the attention of leading politicians, who assemble from time to time in the same places; and, as they often lose sight of each other afterwards, no lasting ties are established between them. But if the object be to have the local affairs of a district conducted by the men who reside there, the same persons are always in contact, and they are, in a manner, forced to be acquainted, and to adapt themselves to one another.

Elegance is the attraction of these ideas. Not only does the system heal itself (as in the first version) but the very mechanism that created the problem in the first place will also solve it for us. What’s intriquing here is not just that this harmonious vision is so common across the terrain of social theory, but that self-regulatory and self-remedying processes are so close in principle to negative mechanisms like throwing good money after bad, chasing sunk costs, the gambler’s fallacy, or self-reinforcing policy quagmires. Of the classical social theorists, Marx is the thinker who is most gripped by this negative image of the tendency for the social order to disastrously undermine itself, while Smith—perhaps against his will—has come to represent optimistic self-regulation in its decentralized mode, and Durkheim in its corporate form; whereas many mechanisms of both sorts can be found in DeTocqueville.

I’m not claiming much originality for these observations, by the way. Indeed, as Henry said in this own post, Albert Hirschman is the man to read on these questions. Essays like Rival Views of Market Society or The Passions and the Interests are little masterpieces, the kind of compact, lucid and judicious analysis that you pray might rub off on your own work.

{ 29 comments }

1

Gavin 03.24.04 at 9:40 am

Modern economics certainly doesn’t regard the economy as a self-regulating system! Under a number of highly specific assumptions, the market will produce a Pareto-optimal outcome, but in practice we all know that there are likely to be market failures. And the problems with correcting market failures are, of course, well-known to economists.

In some cases, the market failure is that there is a missing market (e.g. for pollution) and hence the introduction of pollution credits enables the market to function. Equally, there are many situations where a missing market cannot be created and the policymaker has to muddle through. Two important concepts here are those of the Second Best (that correcting one market failure may make others worse) and that government failure may be equally pervasive.

But there is absolutely no reason to think that state intervention is in any sense sweeping the problem under the rug. Equally, markets don’t run amok, it’s people/firms with market power that run amok (although I’m aware that sounds a bit like “markets don’t kill people, people kill people”!)

2

BP 03.24.04 at 9:47 am

The difference between a government monopoly and a free market monopoly is that, to use the terms on Mischa’s site, a free market monopoly by definition denies consumers both a Voice and the choice of an Exit (other than existing without the particular good or service under monopoly).

Government monopolies (given that the government is democratic or in some way representative) offer consumers a Voice.

Granted, the Voice is not a partiularly efficient regulatory means compared to the Exit in an open and free market, but it’s better than nothing.

3

Jack Lecou 03.24.04 at 12:10 pm

Gavin is exactly right. Any honest economist has no trouble with the fact that in real world markets there are often little leaks best patched with government duct tape. Don’t confuse them with the real “free marketeers”: Libertarians, Objectivists, a few think tank hacks, and anyone else who set their economics book down after chapter 1 (and can’t be bothered with the grittier details of chapters 2-73).

4

Rich Puchalsky 03.24.04 at 12:35 pm

American liberal political theory (as I understand it) has always distrusted concentrations of power and sought to turn power against itself — thus the branches of government, divided legislature, “checks and balances”, etc. Having a strong but limited government go up against strong corporate entities would seem to be just another case of the same underlying principle. One of the problems that I find with libertarian analysis is that they take one particular form of social power called “government” and implicitly insist that it is the only form of power that needs to be restrained.

5

raj 03.24.04 at 12:42 pm

It is sometimes forgotten that MS has a monopoly on the Windows OS in no small measure because of government intervention–copyright protection. Computer software is one of the few–if not the only–useful products that is protected by copyright. It would be interesting to review the history as to how that came about–and the efforts of the large manufacturers of hardware, primarily IBM, to derail patent protection–which is usually used for useful products.

6

Russell Arben Fox 03.24.04 at 12:46 pm

Your Tocqueville example is a good one, but one step away from the source; Tocqueville’s description of the role which the multiplication of “free institutions” supposedly plays in combating the decline of civic virtue in America is really his own vaguely communitarian spin on James Madison’s argument. Madison famously declared, in the Federalist Papers, that republicanism was flawed as a political project, and that the only way to avoid the overall selfishness which self-government gives rise to was to multiply the number of self-interests engaged in that project. The result: a “machine” that would run by itself. One of the great debates in early American history and political thought is the degree to which Madison really thought his solution was, as Tocqueville put it, about the preservation of “political life” and “mutual dependence,” or whether he was dismissing with civic virtue entirely. (See Lance Banning for the former view, Richard Matthews for the latter.)

7

yabonn 03.24.04 at 1:23 pm

Happily, i haven’t paid attention to economic theory for a little while now : i get less apoplectic with the market messianism pervasive to the blogosphere/internet. I nevertheless remember vividly some of my beef.

Limited rationality? You know, i really can make money out of these tulip bulb. In fact if i don’t, the competitors will have, and i’ll be in a bad shape. And as everyone believe it’s the cool thing these days, i have to go, or inverstors will let me down.

And, as always, time? What if that crisis, that you say is good, part of the economic cycle, productive, etc etc, destroys things enought to have consequences over time, and put me in a growth path significantly lower than if i tried to solve it trough gov intervention? South america anyone?

Power relationships? Serfdom back trough turbocapitalism?

Ahack. Nothing new, and i’m getting all itchy again. Hope i won’t summon another wide eyed true believer.

Maybe this can save time : i propose the Last Conclusion on libertarianism. You are doomed to come to it whatever your libertarianism discussion is : “in a libertarian world, libertarianism would apply”.

8

Kieran Healy 03.24.04 at 2:42 pm

Modern economics certainly doesn’t regard the economy as a self-regulating system! Under a number of highly specific assumptions, the market will produce a Pareto-optimal outcome, but in practice we all know that there are likely to be market failures. And the problems with correcting market failures are, of course, well-known to economists.

Yes, of course — this post isn’t about point-scoring off of economists, enjoyable as that is ;-) I was more interested in basic images of modern market societies — as self-equilibrating, or self-destroying. The empirical reality of particular market failures (and the toolkit economists have for thinking about them) is a separate issue. Though, in fairness, there are a _lot_ of people who “set their economics book down after chapter 1” — and this often includes economists, who aren’t averse to the argument from “Econ 101” in public debate.

9

Sebastian Holsclaw 03.24.04 at 5:14 pm

“I was more interested in basic images of modern market societies — as self-equilibrating, or self-destroying.”

I think the basic pro-market position is that markets are basically self-equilibrating except in narrow circumstances. It is a default position with good explanatory force. It is much like the default position in biology which suggests roughly that hereditary traits with negative expressions tend to also have positive functions or a very long term effect before they become negative, or they would not have survived.

Neither proposition is strictly true in every possible case, but they are both very useful rules of thumb.

Economic systems are about allocating scarce resources. A working market promotes the use of alternatives (if they can exist) when the price gets high. The web of resources used even for ‘simple’ product is an amazingy complex balance which is typically not understood by any one player in the economy. When government tries to change the balance, they do so with very incomplete information. As such it isn’t ridiculous to assume that further problems are likely to be caused by government intervention which will almost by definition be persued with a focus on a single or small sub-set of variables instead of the health of the whole system.

The major exceptions to this are activities with highly harmful externalities (say production of nuclear waste or county-spanning pollution), and activities which have a high initial cost with a nearly zero possible return (vaccines).

In any case, there isn’t anything ridiculous about a default understanding that government intervention can cause more problems than it fixes. Monopolies are actually a good example of it. Most monopolies could not exist without leveraging government power. And I’m not talking about mere patent rules. (Though recent and huge expansions in copyright rules may be a good example.)

10

Leo Casey 03.24.04 at 5:16 pm

Madison’s argument in Federalist # 10, largely and correctly seen as an argument against tyrannies of the majority in a republican [representative] government, has both virtues and vices. On the one hand, it provides a framework in which one can think through issues such as the imposition of Jim Crow segregation upon the African-American minority in the post-Reconstruction South, and insist upon the inviolability of certain fundamental individual rights, such as the right to vote, for minorities as well as majorities. But on the other hand, it is notoriously weak in its conception of the classical republican pursuit of the common good, and as a consequence, of how public goods, such as education and health care, should be provided.

Madison’s argument, that the common good is the product of competition between numerous, discrete private interests, parallels closely Smith’s argument concerning the invisible hand of the laissez-faire market. Both have roots in Mandeville’s Fable of the Bees.

I address this issue in a comment in the original post.

11

Decnavda 03.24.04 at 7:04 pm

“when they acknowledge the reality of market failure at all, free-marketeers often want to argue that the problem isn’t that the market has run amok but that it hasn’t been allowed enough room to work its magic. For example, a market failure in one area — say, negative externalities due to pollution — can be remedied by introducing another market — say, for pollution credits.”

Good point, bad example. Assuming that the polution credits are bought at FMV from the government, through, say, an auction, you are adding “more markets”, you are defining rights within the market. If the problem is that a factory next door to me is dumping sludge into a lake I own, and a judge declares that they cannot do so without buying an easement from me (which they could presumably then be sold), is this solving a market failure by adding more markets. This claim seems even weirder in the case of polution credits, where you are solving a problem caused by deviding property only among private interests by declaring the existence of public property that must be compensated on its own terms.

12

Nicholas Weininger 03.24.04 at 7:30 pm

I think Mr. Healy is missing the distinction between the following two argumentative patterns:

1. too much of X has caused a problem, and we can solve the problem by having even more of X.

2. this problem is caused not by having too much of X but by having too little of X.

Argument type 1 is the “hair of the dog” type. Libertarian arguments about so-called “market failures” are arguments of type 2, *not* type 1. The fundamental difference is that a type 2 arguer *rejects* his or her opponent’s premise that X caused the problem.

To expand a bit: libertarians favor strong property rights and wide freedom of contract. To a libertarian, many phenomena typically called “market failures” are actually the result of insufficiently strong property rights or restrictions on the freedom of contract.

Pollution is a good example. The fundamental problem, in the libertarian view, is a lack of well-delineated, well-enforced property rights in the thing (air, water, etc) being polluted. Both of the standard libertarian approaches to pollution– the pollution credit approach and the pure tort-based approach– are based on extending property rights. No “hair of the dog” approach is required here, since the problem is not a problem with markets per se.

13

Jack Lecou 03.25.04 at 12:36 am

In any case, there isn’t anything ridiculous about a default understanding that government intervention can cause more problems than it fixes.

Not as long as you recognize that there are just as many situations where government looking the other way will get you into even more trouble. The fact is that good government is hard work, there is no magic mechanism to guarantee it.

I doubt that most monopolies are enabled by state power, unless you do mean copyright, patents, and trademarks. Microsoft’s monopoly certainly isn’t. It’s existence is the result of a network externality together with (criminally) aggressive business tactics. The state has enabled this only inasmuch as it has thus far failed to intervene in any meaningful way.

14

john c. halasz 03.25.04 at 4:25 am

I have argued elsewhere that the domain of economics has to do with cross-secting constraints with respect to production and exchange. I would add that the notion of equilibriation is not necessarily confined to a single type, (e.g., mechanical, homeostatic equilibrium), nor does it necessarily have to do with the maximalization of a single type of value. That stated, I think that fears that positive or negative feedback would run on without limit are misplaced; sooner or later, they meet with constraints, and must needs reverse themselves or be reversed, no matter how much damage has been done in the meantime. Similarly, there are constraints on governmental and political action, such as limits to the efficacy of administrative measures or controls and limits to the legitimation requirements needed to sustain them. A totalized government is precisely an ineffective government, no matter how dire the costs of maintaining its ideological pretensions. If the domain of social “sciences” is the constitutive constraints of domains of social action, (as opposed to a deterministic account of causality), then it is a pity, if the differentiation of such domains were to preclude a consideration of their interaction.

As to Mr. Holsclaw’s well-spoken articulation of a neo-Thatcherite viewpoint, if governments have limitations on their information-processing capacities, then so do markets, for, if markets are conceived as a dispersed information-processing mechanism, then this logically would mean that they are unsurveillable, as such, and the precise effects of the incentives can not be known. Still, such information can be gathered, if never completely, not the least because of the routinization of its operations, and this applies to government as well as market agencies. I think it is bootless to argue that government intervention must fail, whereas markets, if they fail, must necessarily be left to themselves, lest we interfere in the perfection of their allocating, equilibriating mechanism. Furthermore, there are clearly cases, such as, e.g. natural monopolies, where public regulation or ownership is to be preferred or required. (Just think of the catastrophic privatization of Railtrack in the U.K.) This is a case of either/or thinking setting up a false dichotomy in public deliberation, since it fails to consider how market and govermental processes must needs interact and, indeed, presuppose each other. But one thing is clear, whether it be a matter of market failure, government policy failure, or their interaction, those who have little access to wealth or power will always be the ones to suffer first and foremost.

The paradoxical conceptual trope that “the sickness is itself the cure” or that “the spear that wounds one is also the the source that heals one” is not confined to modern social theory. Whether it is a rational idea or not, it must be at least as old as tragedy itself.

15

Sebastian Holsclaw 03.25.04 at 8:27 am

“if governments have limitations on their information-processing capacities, then so do markets, for, if markets are conceived as a dispersed information-processing mechanism, then this logically would mean that they are unsurveillable, as such, and the precise effects of the incentives can not be known.”

What does unsurveillable have to do with anything? Just because you can’t articulate how something works does not mean that it fails to work. The fact that precise effects of governmental incentive deformations can’t be known is exactly why government needs to limit its involvement.

The idea of the market is that indivduals typically understand individual things about their lives and jobs and needs that are not well understood by governments. They understand how to replace scarce goods with not so scarce goods better than any government worker could. All this is coded into prices quite neatly.

“…that there are just as many situations where government looking the other way will get you into even more trouble.” I specifically do not believe that there are just as many such cases. The cases where we are better off with lots of government intervention are quite limited. But on the other hand I suspect that you would have trouble identifying a handful of cases where you will admit that government intervention is less than helpful. So I have to be skeptical about your rhetorical even-handedness.

16

john c. halasz 03.25.04 at 10:24 am

Mr. Holsclaw:

No one in there right mind would argue that governments should micro-manage economic affairs or that the operations of markets and private businesses do not have a large role to play in the management of economic affairs. The point of the “unsurveillable” remark is that, if it is true with respect to the economy as a whole, it is equally true with respect to market participants as with respect to government agencies, though, in fact, government agencies would probably have the where-with-all to gather together expertise and information to a greater extent than private agencies. But your account of markets amounts to no more than a blind faith in them. And your articulation of their operations as purely a matter of individuals rather than of organizations is likewise unrealistic.

The argument for markets is not that they don’t make mistakes,- they do and often large ones-, nor that they are perfectly self-correcting and self-equilibriating, for history has proven that this is often far from the case, but that they tend to reduce the size, scope, and duration of errors and it is from their functionning as an error-reduction mechanism that they produce their relative efficiencies. (A functionally equivalent criterion could be applied to evaluating the efficacy of government operations.) But markets, as well as tending to periodically short-falls in demand through their own operations, also generate significant externalities, such as pollution or social dislocations, and underprovisions, since markets tend to produce for consumer demand in accordance with the inverse proportion to the marginal utility of additional income, and to generate concentrations of market power that impede and distort their effective operation. And there are any number of public goods, ranging from health care and education to infrastructure and utilities, where public provision is arguably to be preferred. So the claim that any governmental intervention in the operations of markets is detrimental to the inarticulate wisdom of their seamless functionning bears a considerable burden of proof. A more reasonable prudential maxim may be that governments ought to consider the functional virtues as well as limits of markets and tailor their interventions to work in interaction with markets and in consideration of their functional requirements and carrying capacities, to the greatest extent possible.

17

Kikuchiyo 03.25.04 at 11:21 am

For a related bit of empirical evidence, may I suggest this post at Truck and Barter? Short version: Microsoft may fall prey to Walmart’s aggressive policies viz suppliers.

18

Sebastian Holsclaw 03.25.04 at 5:45 pm

“it is equally true with respect to market participants as with respect to government agencies, though, in fact, government agencies would probably have the where-with-all to gather together expertise and information to a greater extent than private agencies.”

No it is most certainly not equally true. My point is that no entity can gather the information that you require. No company can, no government can. The ‘market’ is millions of individual and self-grouped actors making decisions based on their own interest, their own costs, their own needs, and their own desires. And in none of those catagories does the government know better for most of the people. These personal needs, desires, costs and interests are fulfilled by doing something that other people are willing to pay for. People are willing to pay for things based on their own needs, desires, costs and interests which they balance out for themselves.

There is no agency, public or private, which could possibly gather the ‘expertise and information’ necessary to take even a small fraction of that into account. What we call the market is really just the aggregate of billions of free choices.

You do however locate the key leftist contention: “So the claim that any governmental intervention in the operations of markets is detrimental to the inarticulate wisdom of their seamless functionning bears a considerable burden of proof.”

You don’t believe in what you dismissively label ‘inarticulate wisdom’, and you certainly don’t believe that it could lead to better outcomes than those that could be dictated by government officials.

But that is precisely where you are wrong.

19

David 03.25.04 at 6:03 pm

“A more reasonable prudential maxim may be that governments ought to consider the functional virtues as well as limits of markets and tailor their interventions to work in interaction with markets and in consideration of their functional requirements and carrying capacities, to the greatest extent possible.”

The idea that “governments” can regularly operate is such a rational, apolitical, and socially-upright way is itself based on fantasy. This is simply not how policy is made.

20

John Lederer 03.25.04 at 8:58 pm

Any discussion about Micorsoft and the functioning of markets ought take into account that Microsoft is a governemnet created and maintained monopoly.

Doubt it?

Copy Windows XP , sell it for $10, and watch the state interfere.

We may be accustomed to monopolies created by the copyright law, but that doesn’t mean that they are not a large interference with a free market, and a very pertinent one when discussing a business that relies on them.

Thus the application of anti-trust law to Microsoft is not a question of “ought we interfere with the market” but one of “ought we interfere more with the market that we have granted monopolies in?”

21

Jack Lecou 03.25.04 at 11:02 pm

The cases where we are better off with lots of government intervention are quite limited.

I did not say “lots” of intervention. Merely that there are many, many markets (most, probably) which are the better for some small bit of regulation. This is because there are very few markets which truly fit the very strict conditions for achieving an optimal outcome on their own. I agree that the default position for government ought to be hands off as much as possible.

For example, no one ever actually has all the relevant information. Thus, while it is a very bad idea for a government to be intimately involved with the supply and distribution of toothpaste (markets work much better for this), it may be an equally good idea to have a few regulations about the safety, purity, labelling, etc., of ingredients in the toothpaste. Such regulations are virtually costless and help to overcome the information problems.

John:

Copyright only gives Microsoft a monopoly on Windows, not on operating systems in general. This alone would not be a problem as others (Sun, IBM, Redhat, etc.) would all be free to market their own products.

Mostly because of trademark protection, this is the type of market (monopolistic competition) in which the majority of products are sold. Except for the higher information gathering requirements (many differentiated products to choose from), this is generally almost as good as perfect competition.

22

james 03.25.04 at 11:52 pm

The government source of Microsoft’s original monopoly is not copyright law. Its the government anti-trust rulings against IBM. IBM was forced to decouple IBM software from IBM mainframes. This created an environment where IBM created revenue from hardware, but was prevented from creating revenue from IBM hardware coupled with IBM software. Its not clear if the anti-trust rulings would have applied to the PC world. The ruling did effect IBM’s in place business model. Which brings us to the point of IBM bying operating system code from a new company called Microsoft.

23

Jack Lecou 03.26.04 at 1:52 am

It is difficult to see how the IBM antitrust situation could have much to do with Microsoft’s monopoly. It was the wild popularity of the PC platform (forming a network externality) and Microsoft’s subsequent actions (e.g., against DR-DOS) which created the monopoly. The same opportunity would have been there had someone else provided the PC’s OS, even IBM (assuming another OS would have been as popular).

24

john c. halasz 03.26.04 at 3:06 am

Mr. Holsclaw:

I have no doubt the you and I would never agree on these matters, having read some portion of your vociferations before; the ideological gulf, that is, the difference in basic normative conceptions and commitments, is simply too great.
But allow me to respond to some of your contentions. That ” the market is really just the aggregate of billions of free choices” adventitiously flitting about is a beautiful idealism. However, more realistically, it would be described as billions of interactions, deriving from productive activities with their own conditions, constraints and functional requirements. That money changes hands there is not in doubt; however, that fact alone is not sufficient to guarantee systematic equilibriation, nor the optimal equilibrium of human needs. Furthermore, that the economic realm is the primary domain of human freedom is an idea that shows a want of realistic imagination. To the contrary, the economic realm is primarily the realm of necessity, of onerous activity directed toward the fulfilling of the basic needs and necessities of life, so that some of the finer things in life may develop, flourish and be enjoyed, which goods would not be reducible to material goods, subject to private appropriation as property, but would include ends of life derivable from the basic capacities of our sociality, perhaps not the least of such goods being deliberative participation in the affairs of a political community. And “economic freedom” is in the first instance primarily a functional description, pertaining the the requirements of a systematic way of arranging economic affairs, which may, indeed, arguably have its considerable merits and on balance be desirable with respect to optimizing and augmenting the production of the net social surplus product, but which is not derived from an expression of individual volition. Finally, to argue that domination and coercion pertain only to the political realm and government action, whereas the economic realm is blissfully free from any such taint, beggars thought and experience.

There is a peculiarly paradoxical flavor to your thinking, for at its core there is a claim that the raising of cognitive validity claims about these matters is futile and can only amount to a deleterious interference in its mute, spontaneous harmony, which itself amounts to a claim to some sort of transcendental “knowledge”. An argument from complexity can be a valid and insightful approach, but an argument from complexity in the name of ignorance is not. I’m sure I am not the first one to note the naivete’ of such supposed scepticism, as well as its defensiveness. It amounts to the evasion of any requirement that validity claims be tested. Now I am just as sceptical as the next fellow of some of the claims of professional economists, but to claim that they spend their time worrying about what can not be known and provide no understanding of complex states of affairs is tantamout to denying any possibility of remedying the course of blind fate.

No one should underestimate the difficulty of establishing good government and of subjecting it to effective public oversight and rendering it responsive to the claims and needs of the public sphere in searching out the overall balance of the public interest. In this, us lefties are not naive idealists, but are just as capable of bitter cynicism as anyone else, though perhaps we are deficient in enjoying it with full relish. Not the least of the difficulties is the usual extent to which political leaders betray the public trust as guardians of the public interest and abuse the processes of public political legitimation, especially at the behest of concentrated private business interests that covertly and symbiotically support them financially. But to argue as David does, that political leaders and actors should regularly act in an “apolitical and socially-upright way” is a piece of laughable misunderstanding, similar to demanding of businessmen that they behave uneconomically, and is itself a piece of ideological fantasy. The recurrent trope on the right is that all human behavior is necessarily solely self-interested, but that in a market economy self-interested behavior must necessarily and miraculously be converted into the operations of the general interest, as if excesses of fraudulent and coercively exploitative behavior did not regularly occur there, whereas political actors are necessarily comsumed with and corrupted by self-interest, such that they can not possibly do anything right. The veracity of this platitude is especially amusing and instructive to observe when right-wing governments take charge. Still, for all its pitfalls and dissappointments, there is often enough sadly no other recourse than political action and government policy when dealing with the errancies and dysfunctions of our inevitably collective condition, lest we all succumb to the blindness of fate and lose any capacity to recognize any common belonging. Finally, Jack Lecaw brings up a crucial point about the asymmetry of information, though I don’t see why a “default setting” should necessarily be preferable to the avoidance of default: very often, government action, regulation or intervention is, in fact, required to bring about the effective functioning of markets.

So I’m sorry, Mr Holsclaw, that I must defect from joining you in your indulgence in the “higher fatuity”.

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james 03.26.04 at 4:47 am

Without the governments anti-trust rulings, we would be talking about the software giant IBM instead of the software giant Microsoft. The anti-trust rulings made it possible for Microsoft to exist as an OS provider. By the time IBM entired the OS market, Microsoft was already entrenched. Copyright laws might keep Micrsoft going, but the anti-trust rulings created it.

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james 03.26.04 at 4:47 am

Without the governments anti-trust rulings, we would be talking about the software giant IBM instead of the software giant Microsoft. The anti-trust rulings made it possible for Microsoft to exist as an OS provider. By the time IBM entired the OS market, Microsoft was already entrenched. Copyright laws might keep Micrsoft going, but the anti-trust rulings created it.

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Jack Lecou 03.26.04 at 6:27 am

Right. And if IBM had awarded the OS contract for the PC to Disney we might be talking about a Mickey Mouse OS monopoly. So what?

The point is that it was the unprecedented success of the PC platform which set the stage for a monopoly OS vendor. The most the antitrust ruling could have influenced is whose name was on the door of the dominant firm, not whether it existed.

Copyright law has absolutely nothing to do with Microsoft’s monopoly. If I write a mystery novel, copyright grants me a monopoly on that novel, not the entire mystery novel market. (Microsoft would obviously be in trouble without copyright, but so would be every other software company. Even open source relies on copyright.)

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james 03.26.04 at 4:01 pm

Concerning a debate on Government intervention vs Market forces, the origin of Microsoft is important. By showing that government intervention against IBM created the entity Microsoft, it demonstrates that the government cure for a problem can be worse than the original problem. Thats why its important.

The government handling of Copyright law is one of the tools Microsoft uses to maintain its position. If the source code to the OS became public domain, competitors or manufactures could offer windows compatible OS. This would immediatly remove Microsoft’s monopoly.

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Jack Lecou 03.26.04 at 8:22 pm

Umm. Government didn’t have anything to do with creating a monopoly OS provider. As I said above, the most the antitrust ruling could have affected is who got the monopoly, not whether there was one. By your own reasoning, even if we suppose that, absent intervention, IBM would have developed its own OS for the PC (and I’m not at all sure this would have been the case), then we would have IBM with one big monopoly. Terrific. With or without the government intervention we end up with a monopoly in software, so how could the government possibly be responsible for it?

Saying copyright protection perpetuates Microsoft’s monopoly is like saying that laws against arson perpetuate its monopoly. Copyright protects everyone in the software marketplace equally, it doesn’t give any preference to Microsoft. I suppose removing such protection from Microsoft alone would make a novel antitrust remedy – it would make it very difficult for them to sell binaries – but even then they could keep the source secret.

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