February 04, 2005

Free Market and Monopoly

Arnold Kling in his post Michael Powell Resigns praises the ex-FCC-chairman's attempts to deregulate communication industry.

Michael Powell also fought for deregulation of media. That would allow one media outlet to eventually control all newspapers, TV and radio information. Free-market proponents don't think (or never say) that absolute monopoly is bad.

In a marvelous paper An Austrian Theory of Business Cycles, Ben Best says:

A more devastating and immediate attack on the American Economy, however, came from the Justice Department, which branded Microsoft Corporation a monopoly ... Microsoft lost $70 billion in market capitalization in a single day, ... Technology is an intricate web of interdependence and this is especially the case with MicroSoft. Very many company's fortunes were tied to products built around MicroSoft. The devastating damage to MicroSoft had a domino effect across the whole technology sector -- including MicroSoft's competitors and eventually the whole economy.

Apparently, Ben Best does not see the huge Microsoft monopoly (probably the largest monopoly in the world, in terms of dollars) as anything bad.

Like thousands of other software developers, I think that Microsoft's monopoly stifles new technologies through attempts to destroy them (Netscape, RealPlayer, Linux, Burst), forces developers to waste time and be inefficient by using botched up Microsoft interfaces (Windows Media Player, COM, OCX), and by keeping high prices in the absence of competition. And these are all factors that unfavorably affect economy.

I am not convinced that this world would be a better place without Microsoft. Still, it is important to be against bullying, in principle.

Posted by laza at February 4, 2005 04:51 AM | TrackBack
Post a comment

Remember personal info?