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US Department of Justice's Antitrust Division recently released 47 public comments on the Microsoft antitrust settlement. Most comments express the usual anti-Microsoft and anti-capitalist viewpoints. As expected.
Anti-Microsofters and anti-capitalists use morally bankrupt concepts in their pursuit for government intervention in the Microsoft settlement. Defenders of Microsoft must base their arguments on corporate property rights to establish a strong and consistent argument.
Most or perhaps all of these comments make a central mistake by referring to a concept they call the consumer interest and public interest. There is no such thing as a public interest. And consumers do not have any legitimate rights over other people's property. These vague concepts are used to further personal business interests, to pursue a political agenda based on socialist ideals and/or to follow a blind hatred to a successful and innovative company.
"[W]e reject the notion that this settlement serves the public interest, or that any punishment of Microsoft for its business practices will be of benefit to any consumer. Eroding Microsoft's property rights serves no one. We hold that no antitrust case, including the Microsoft case can withstand rational scrutiny, and we ask that no sanction be placed on Microsoft as a result of its antitrust conviction."
In other words, the settlement is rejected.
Professor Nicholas S. Economides (website) of the Stern School of Business of New York University supports the settlement. He does so based on economic arguments. In particular, he argues that "The potential damage that antitrust intervention can produce is larger when it is applied to an industry such as software with fast technological change, where leaps to new and more efficient technologies are expected, while the specific nature of the future winning technology is unknown."
Of course Economides is partly right. But his argument hinges on the premises that 1) the speed of technological change matters and 2) that network effects exist (e.g., Window buyers prefer MS Word instead of WordPerfect) resulting in very significant inequalities in market shares and profits.
I disagree with Economides' argument because it is invalid in markets with slow technological change and without significant network effects. Further, Economides' argument is not able to win the central battle in this debate: Defending the property rights of a successful company including the right to configure and bundle products (or not) and to earn substantial profits as they sell the products.
It is precisely this kind of entrepreneurial activity our economic system should support to respect property rights. Not for the sake of economic growth. Not for the public interest. Not for consumer interests. Not for more technological innovation. Only for the company owner's right to pursue his own happiness.
Producers have rights, and there are things no person or group may do to them (without violating their rights).
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Comments From Readers
Technological change in the software industry Yeat Kris! |