About two weeks ago, we had quite a spirited debate here about the question of monopolies in a free market system, and specifically the question of whether Microsoft, or any other supposed monopoly was a problem that libertarians and classical libera…

About two weeks ago, we had quite a spirited debate here about the question of monopolies in a free market system, and specifically the question of whether Microsoft, or any other supposed monopoly was a problem that libertarians and classical libera…

You might have a point there, especially with the rather hefty system requirements for Vista, especially in the graphics area. The cool new Aero UI, which so far is the biggest selling point (if one could call it that) will almost certainly need a discrete graphics card to run, and a recent one at that. So no integrated graphics for the new UI, which means that most, if not all of eMachines’ line will seem obsolete to users right out of the box.

Of course, all of OS X’s goodies would put PC makers in the same spot as Vista, so eMachines or another vendor could break ranks with Microsoft and go with a customized, Windows-like Linux distribution.

After going back and reading your comments, I don’t think you and I really disagree – I think we just see the competition/coercion thing a bit differently. We agree that governmental regulations are generally a bad thing. You’ve been at this business a much longer time than I, for sure, and so perhaps your insight is a bit clearer – but I still believe that ultimately, we do have a choice. While I managed to work hard and get all the bugs worked out of my first HP proprietary computer 10 years ago, that was also my best teacher – and it taught me that I never wanted to deal with that kinda stuff again. I’m still learning, but *I* am making my choices now as to what components I’ll put into my computer and what programs I’ll run. And whether it’s MS, McAfee, Norton, AOL, Earthlink or whatever – if it seems to dig too much into my setup and cause me grief, it’ll get dumped as fast as yesterday’s news. But, that’s just me. I’m a control freak and not content to let anybody make decisions for me, and unfortunately, I know I’m in the minority – and folks like my mom and dad are at the mercy of whatever is most popular mainly because they just don’t have the energy to take the time to learn what I’ve been learning.

In a *perfect* world, I don’t think that government should be involved – either in promoting a private business through deregulation or in helping to create a monopoly.

In 1995, that wasn’t possible because Linux wasn’t competitive and MS, Sun, Apple, etc. were all trying to make money off of artificial scarcity. It should be noted that MS “won” in the 1990′s as much through the greed of their competitors as through things they did themselves. I know a lot of folks celebrate MS leaders as great businessmen, but if you look at the OS and OEM history, that really isn’t as true as we would like it to be.

Personally, I don’t see any software company in the driver’s seat in the OS Space at the moment. If anyone is in a position to influence things, it’s Intel. If, and knowing Steve Jobs it’s not a great if, Intel were to convince Apple to do something like a clone PC licensing program like they currently do with iPod accessories, it would, I think, debase any monopoly power that MS had. Imagine, if you will, being able to buy a Dell CoreDuo machine with your choice of Windows Vista and OS X. I think, all else being equal, consumers would flock to OS X.

What do you all think?

I do, however, want to ask a couple of questions.

1. It is a premise of classic liberal (I’m done using the term libertarian, which appears to be equated with anarcho-syndicalism these days) philosophy that coercion is bad and lack of competition is bad. How is it that you are willing to accept a lack of competition in one market as “just the way it is” but not in another market?

2. I’m curious how you would feel if it was shown that government regulation and intervention helped to create a monopoly? Would it then be bad?

I agree with you. People seem to forget sometimes that, for all its so-called monopoly power, Microsoft has had a lot of duds over the years. Does anyone remember Bob ?

There are many technology purists who will say that Bill Gates really didn’t create anything new when he founded Microsoft. After all, they say, MS-DOS was really just a renamed version of something that someone else had created. Even if this is true, this criticism ignores the fact that part of what it takes to be successful in business is business accumen and good marketing — and I don’t think there’s anyone who can argue with the assertion that Microsoft has been successful in both of these areas.

Additionally, its not Bill’s fault that he succeeded. Heck, half the reason he did is because he competitors made alot of stupid mistakes. Apple decided to make the Mac and its operating system proprietary rather than licensing it out, had they chosen the second option then computer makers like Dell might arguably have had another alternative to choose from when it came to operating systems and, just maybe, Apple would be more than just a niche product in the computer world (and, on an unrelated note, there are those who say that Steve Jobs is making the same mistake with ITunes and the IPod). Another example: it took Corel almost 2 years to come up with a version of Wordperfect that was compatible with Windows 95. By then, Word had gobbled up so much of its market share that it was no question who the winner would be in the longer run. Thus, MS Office has become the dominant office suite.

In some sense, its no wonder that Microsoft has been as successful as it has been.

Its a personal pet peeve that many people get stuck in the “we’ve always done it this way” pattern and never try to look for a better or different way to try to improve – but that is not the fault (for example) of Microsoft – but of the consumer who allows themselves to be lulled into accepting a poor product.

The simple fact is that Microsoft was a leader in two ways, when it came to the growth of the PC. First, they built incredible market power around Windows, by making the computer both accessible to the regular user and powerful enough for business to make use of it. Whether what they did was optimal is a big debate, and whether or not either of us agree with Eric is truly immaterial.

My point through this whole ordeal is that Microsoft dominated Phase I: The Acceptance of the PC. They have position in the market to dominate Phase II, if they make the right decisions, but it’s by no means assured. The past is important, if for no other reason than to understand how the current situation came about, but without a true coercive monopoly, the future is still wide open.

I’ve been involved in a lively and interesting discussion over at The Liberty Papers. It started with this post by Eric Cowperthwaite that quickly led into a discussion on the libertarian position on monopolies and large corporation. Then, Brad p ……