Winners, Losers & Microsoft

I d not know why I do it, but I did it again. I picked up an economics books and read it. I have thoroughly enjoyed Friedman's books. It seems like others should be able to write compelling texts on economic theory. Stan J. Liebowitz and Stephen E. Margolis's book, Winners, Losers and Microsoft: Competition and Antitrust in High Technology, is a two decade old book that found its way to my shelf and then my hands for reading. The authors were clearly penning for tenure. The book is somewhat patronizing, "Parts of the next three chapters may be a bit difficult..." (p. 47). It is very dry and loaded with economic theory.

The premise of the book is that the best products win. Best products are determined by the blending of quality, information and price. They passionately disabuse the reader of the concepts of monopolies protecting inferior products. Some of their theories ring true in the years since the publication. VHS tapes have been replaced with DVDs and streaming. MCI gave way to free long distance on cellular platforms.

In technology where new developments are constantly appearing, the existence of serial natural monopolies exist. They would argue that on-going concern about Microsoft in the marketplace is misplaced. As soon as a better product comes along they will be displaced.

I am not fully bought in to a system where the market best presents products to the people. The Flint, Michigan water story is a clear indicator that without checks and balances, a monopoly can do irreversible harm to the community. Does the size of Microsoft lead it to dominate the market in such a way that competitors are ineffective? Apple still offers strong competition. Open source browsing are still options for all. If people want, they can use alternative resources. For some reason we choose not to. Often it is because the big names are the perceived best.

If you can get through it, an interesting theory. Certainly thought provoking.  I might dig out my 150 year old book on the merits of free market society versus protectionism. It is a series of essays touting one side or the other by many illustrious people including Adam Smith and Henry Clay.