Editorial A Monopoly On Stupidity
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03/05/98
Investor's Business Daily
Page A30
(Copyright Investor's Business Daily, Inc. 1998. To Subscribe Call (800) 733-8900.)
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To hear the senators and witnesses at Tuesday's "get Microsoft" hearing on Capitol Hill, you'd think Microsoft was taking over the world. That's absurd. The only monopoly that needs breaking up is the one Microsoft's foes hold on stupidity.
When people hear the word "monopoly," all sorts of images come to mind robber barons, price gougers, economic dictators. And Bill Gates has attained this status in the eyes of Washington and his rivals.
But what is a monopoly? Gates' rivals and Washington say Microsoft Corp. has a monopoly because its Windows operating system runs most PCs in this country.
Netscape Communications Corp. CEO James Barksdale "proved" this point when he asked for a show of hands in the hearing audience of those who had PCs, and then of those who used an operating system other than Microsoft's.
Barksdale proclaimed: "That's a monopoly," even though some people indicated they didn't have a Microsoft operating system. So, by Barksdale's and others' definition, a monopoly exists when a successful company has just a few competitors - or when not enough people in a room raise their hands.
Baloney. By definition, a monopoly doesn't exist when a company has competitors. What irks Microsoft's rivals is not that it is a monopoly, but that it has a short-term advantage. That's a crucial distinction that the rivals don't want to acknowledge and that policy-makers can't understand.
Rather than devote time and money testifying, whispering in politicians' ears and filing briefs with the Justice Department, shouldn't Microsoft's rivals be looking for ways to beat the software giant in the marketplace?
And speaking of the politicians, remember, it was the policy types who - by force of law - set up monopolies for phone service, cable TV, electricity, natural gas and water. Indeed, monopolies survive only when laws protect them. Where those protections have fallen, as with phones and electricity, competitors rush in.
If the pols had left more of these goods and services to the market, you would have seen the same thing that's happened in software - breathtaking advances at lower prices.
In fact, the populists' main argument against any monopoly is that it will raise prices, gouging consumers. In Microsoft's case, that's more baloney. It's practically giving Windows away.
Before more senators join the Justice Department on a witch hunt against Microsoft, they ought to brush up on their economics. Microsoft is not a monopoly, no matter what its rivals claim.
YuanQing, |
