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July 5, 2006 - Freedomain Radio - Stefan Molyneux
34:35
315 Trust-busting: Microsoft Versus The Department Of Justice
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Good afternoon, everybody.
It's Steph. It is quarter to five, July the 6th, 2006.
Boy, it's nothing but driving today, so I might as well keep a podcasting, because otherwise singing to myself makes my voice roar, and I have an interview to go to.
So, I will...
Podcast on the way down, to keep myself occupied.
Now we've had some requests on the board, and every, I think it's annually, we like to respect what the listeners want, just to, you know, throw everyone off.
And so today, we're going to have a little chit-chat-o-rama about, and this will be the first of a series in topics, though I'm not sure I'm going to do them all in sequence, because that would be too predictable and leave me too open to criticisms of consistency or the lack thereof.
So, We're going to have a look at antitrust legislation.
Can you feel the excitement rising within you at the moment?
It's almost too much to bear, isn't it?
Antitrust is a fascinating, fascinating area of legality.
Ayn Rand has a great article on it where she compares it to a kind of bigotry, and I think quite accurately as well.
Antitrust, and we'll deal mostly with the U.S. here.
We do have it up here in Canada, but it's even more convoluted and probably of slightly less interest to most of our American listeners.
What is it that John Stewart calls this?
The pleasant sidecar of a country known as Canada.
So, it may not be too gripping.
I remember, I think I read once, there was a contest for the most boring headline that could be conceived of.
In terms of a newspaper headline that would just really put people to sleep.
And the one that won was an actual headline, and it was Worthwhile Canadian Initiative.
That was the headline that was apparently the most...
So you put the three, worthwhile, you know, that's boring, going nowhere, initiative, doesn't even go anywhere, it's just a start.
And the clincher, of course, is, well...
So, maybe.
All we do is we export our high-energy people south, in the forms of comedians in particular, and so we're not going to do Canadian antitrust legislation, although it's pretty much all over, because the economic drivers for antitrust are the same everywhere, and the economic drivers not ever being the good of the consumer.
But the collusion between those who want access to state power in order to pretend that they can be competitive and those who have state power and want to expand it because they're evil state trolls.
With that analysis underway, let's talk a little bit about what happened with Microsoft.
Now, Microsoft is a fascinating company, and a combination of obvious business genius in the form of Bill Gates and Steve Ballmer, and the other guy, the poor guy who got sick.
And what happened originally was, of course, Bill Gates was a computer programmer.
It's sort of early to mid-teens.
And he wrote some stuff.
I think he wrote a program for controlling the lights at traffic lights.
And he ended up rolling around.
His mother is quite philanthropical.
And his father, I believe, is a lawyer of intellectual property or patents or something like that.
And he ended up getting involved in the entrepreneurial world, and what he did was he bought the rights to a disk operating system program.
This is, gosh, late 70s, early 80s, I think.
And he bought the rights to a disk operating system program called...
Disk operating system, DOS, DOS. And a disk operating system, for those who don't know, is a low-level assembly language program that is used to save files to the hard drive and retrieve them back.
And this sort of originally all it did was you'd have a little program and you'd use that typing academy we call DOS to navigate to the correct directory.
So it manages the file allocation table, the directory structure where the bits and bytes start and end on the drive.
And it deals with file fragmentation, and basically it's how you interact with your computer at the very lowest level.
And you kind of need it to run a computer, because if you don't, all you have is a little cursor and no particularly good way to load and save information.
So he, for $75,000, he bought a DOS program from a programmer somewhere in California, I think Silicon Valley somewhere.
And he turned around and offered this to IBM, because IBM was building its first personal computer.
The fabulous 4.77 GHz 8088 chip, I think it was, with something like, gosh, 256k of RAM, something like that.
It was some number that still dwarfed my first Atari 800 with the princely amount of 8k of RAM. Couldn't even use the Graphics 8 setting, but that may be too geeky for most people.
So IBM was creating this PC and needed a disk operating system and didn't want to buy it.
And didn't want to build it.
They're a pain in the neck to build.
And of course, the testing has to be pretty rigorous.
So they bought this from Bill Gates' company at Microsoft.
And... What happened was Bill Gates worked out an absolutely fantastic deal where they didn't get paid much money up front, but they got paid based on the royalties of the IBM personal computer.
So for every copy of the personal computer that was sold, Microsoft would get a percentage of the royalties for the disk operating system.
Now, another thing that occurred which was very fortuitous to Microsoft, and this is not to do anything to denigrate the business genius that is involved in it, but a couple of lucky breaks don't hurt.
And so what happened was, the IBM architecture, for a variety of reasons we don't have to go into here, ended up being...
Kind of, well, completely extensible.
Extendable. And this was unusual.
For instance, the Macintosh, nobody can make peripherals, or at least back then, I don't know if it's changed since, but nobody could make peripherals for the Macintosh, except for...
Apple itself. So if you wanted to buy a sound card or a video card or a networking card or you wanted to, I don't know, buy some fancy n-dimensional mouse, you had to wait and hope and pray that Apple was going to make it.
And then what would happen is Apple would then overcharge you for it.
But it would be compatible, right?
I mean, this is the thing. Apple would be in control, would get to trust test everything with the Macintosh, all of the peripherals, all of the add-ins, and so it would all be compatible.
And so what happened was, as the IBM started to sell, what happened was a lot of people began to manufacture them and just pay a royalty too, right?
So you had what was called the clones, right?
It was an open architecture.
And so lots of people began to make clones of the IBM PC and sell them for less than IBM did.
And lots of people began to create add-on cards to the IBM to extend its functionality, to make it run faster, to give it color.
The CGA card, which was the princely four-color card, followed by the EGA color with, I do believe, 16 colors.
I believe that was my first IBM, which was a 286 12 gigahertz with a...
4 megabyte hard drive?
10 megabyte hard drive? Something like that.
But quite a miracle over my Atari ST, which was still running on the floppy.
And just to give you a sense of the kind of value that you could get out of these computers, the Atari ST, which had a...
1,000k of RAM, what we would call now 1 meg of RAM. And it had a great operating system, came with a mouse, lots of colors, great video game.
It had excellent sound synthesizers like the Amiga.
And for me to buy a hard drive for the Atari, I was getting sick and tired of floppies getting demagnetized all the time.
Floppies are just living in terror, in case you don't know all of this stuff.
If you save something to a floppy disk the next time you need it, you simply hope and pray, and you get sick and tired of running backups and then just problems with floppies.
At least I did. Maybe it's because of my magnetic...
Oh, you know what? I'm not even going to make that joke, that magnetic personality joke.
We like to think that there's some low level of standard that we try and rise above, and I'm not going to dip quite that far down, but it was $900 back then to buy a hard drive For the Atari ST. And for $800, I could get screen, keyboard, mouse, hard drive, memory, and the CPU, and all of the associated peripherals, including a modem.
For $800, I could buy...
In this case, it was a second-hand, but for less than the price of a hard drive, which was, I think, only...
A couple of megs.
I got a hard drive that was twice the size, and I got the whole computer, so that's an example of the kind of value that was available within the IBM world.
And so because IBM built these computers with an open architecture, anyone could build whatever peripherals they wanted.
And so you've got two things, right?
Three things. You've got variety, you've got price, and you've got instability, right?
As is the case when everybody builds components, they can't all coordinate the testing of them together.
It's one of the reasons why the Wintel architecture has been unstable since day one, but very cheap.
And generally, we know, fairly cost-effective because people are still buying it.
So what happened was Microsoft happened to sell a license for every IBM or IBM-compatible, IBM-cloned PC, that was sold.
It happened to sell, it got a license fee for each copy of what was then termed MS-DOS, Microsoft Disk Operating System.
And from there, the dream was born, right?
I mean, there you had a company that really could do no wrong.
And I'll just sort of give you a bit more brief history.
I find this stuff interesting. I hope that...
Fast-forwarding for those who don't.
But... What happened then was that pretty quickly there were lots of graphical emulators and a lot of them worked in ASCII text, QDOS and stuff like that.
There were a lot of graphical emulators that came out which were all aimed at trying to find a way to make the IBM PC a little less...
Ugly slash typing hell slash navigational with backslashes slash slash.
A little more friendly to the users.
So you had Windows 1.0, you had a DOS shell managers and so on, which could run multiple programs at the same time and all that kind of stuff.
And what happened was...
Microsoft, with all of this money, and they literally had, if you read the history of it, they had checks for hundreds of thousands of dollars lying around that they just hadn't had time to cash.
I mean, just a fiendish amount of money came into Microsoft.
And so Microsoft began developing Windows, and it sucked, and Windows 2 sucked, and then they went...
I think it was Windows 3.0 was good.
3.1 totally took off.
Sort of built-in networking.
And it was fast.
It was stable. It multitasked.
It was just great. And I remember having a computer.
This is amazing. With 4 megabytes of RAM and being able to run Word, Excel, and PowerPoint without having to touch the swap file.
All of it could be held within RAM. Right now, it's...
You can't even get an operating system, a tenth of an operating system, into four megs of RAM. But back then, you had all of this great stuff.
And the other thing that was great about Windows was that the printer drivers were all installed and standardized.
And so those companies who tried to sell printer drivers separately ended up dying a painful, hoary, consumer-indifference kind of death.
And then they tried teaming up to build OS2 with IBM, and OS2 was nice, but man was it slow.
I tried installing OS2 on a 486 with 8 megs of RAM, and you couldn't even open a control panel window without it having to use a swap drive.
I just didn't find it to be that efficient.
And then they parted ways, and Microsoft went on towards Windows 95, and OS 2 died a painful slow consumer indifference death trying to get OS 2 Warp to go.
So basically Microsoft ended up with a very large and powerful chunk of revenue which it basically got for sitting around and having other people sell IBM PC hardware, compatible hardware.
Now of course the question would be, naturally, in the free market, The question would be this.
Well, if the market was so huge for IBM PCs, why didn't other people come up with disk operating systems and sell them for cheaper than Microsoft did?
Well, of course, this did occur.
There was DR-DOS. I can't remember.
There were a couple of other DOS. This was Digital Research, I think it was.
And they were good.
They all sort of had the same kind of feature set.
And... They tried to compete with Microsoft, but Microsoft did not face competition primarily from those who sold other DUS systems.
The competition that Microsoft was fundamentally facing was competition From the people who simply copied DOS, right?
There was no pinging the internet to see if it's genuine Windows or anything like that, or genuine DOS products.
There was none of that nonsense.
And so what happened was, people were just ripping off Microsoft, copying DOS, because the price competition in the IBM world was so fierce.
I mean, it was not that fierce in the Apple world, but in the IBM world, IBM clone world, it was fierce, fierce, fierce price competition.
Because people were buying, basically, they could compare feature sets, the users were becoming quite educated, and they could just compare feature sets and figure out which ones were better.
And so price competition being so fierce, the $60 or $80, which is shelled out for a copy of DOS, if you could sort of say, it's bundled, it's OEM, there's no manual, or if there is, it's photocopied and hand-stapled or something, then that was the big difference between a sale and a non-sale.
And so Microsoft moved fairly aggressively in this realm to protect its intellectual property.
Ooh, ooh, I can hear the emails beginning to fill my inbox with arguments about intellectual property, but this is not necessarily the place for that.
But... You are going to face, sorry, Microsoft faces issues, so what did they do?
Well, they did what most people would do.
What any intelligent business person would do is they would go to somebody like Dell or even the smaller computer shops and they would say, okay, this is how it's going to work between us.
You are more than welcome to go with DRDOS or QDOS or whatever else you want to go with.
But, if you want one single copy of Microsoft Windows, we are only going to give you that if you buy a license for every single PC that you sell.
You ship 10,000 PCs this month, you better buy 10,000 licenses for Windows.
And you don't have to take this deal.
You're perfectly willing, you're perfectly able to ship DOS, some other DOS with your computer systems, but if you want MS-DOS, then by golly, you had better buy every single, a license for every single machine that you ship.
Now is that because Microsoft was just evil and wanted to crush competition?
Well, no to the first and yes to the second, but they really only did it because they were 90 to 95% of the DOS world was MS-DOS anyway, and they were just getting ripped off so much because people were just stealing their property.
Linux users, it's s.molyneux at rogers.com for your complaints about intellectual property and monopolies and patents and bad things like that.
Feel free to flood me.
It generally gets marked as spam, but that's okay because...
It's my property. I can market however I want.
So then, what happens is everybody gets all up in arms.
And what they got all up in arms with, like all antitrust things, was about something completely unrelated to the actual matter at hand.
So, all of this occurred, and all of these other DOSs went away, and people complained about unfair competition who were manufacturing competing disk operating systems and so on.
Nothing happened, of course, because nobody who had a hell of a lot of money was really that worried, because they all had invested in Microsoft, and they were all doing hunky-dory, thank you very much.
So, they didn't really worry about that.
And then what happened was, in sort of the mid-90s, you began to get the rise of the internet, right?
I first saw it, I guess, in the early 90s and thought, hey, this is a great business idea.
I think I'm going to go to grad school and study history because, by heavens, am I ever a brilliant business person.
So, what happened was, Microsoft had licensed the Windows, right?
We're into Windows world now, right?
It licensed its Windows operating system to PC makers on the condition That they also take at no charge the internet browser called Explora.
So... Microsoft was selling Windows, but they also wanted to own the browser market, which at that time, there was Mozilla, there was Netscape, and there was Internet Explorer.
And Internet Explorer did suck a little bit.
Microsoft is generally much better with the alternate versions.
Version 2, 4, 6, 1, 3, 5, and so on generally sucked like a vacuum.
But what happened was, if the operating system and the browser are separate products, then this arrangement is called a tying arrangement.
And this was forbidden by a 1995 consent decree between Microsoft and the Department of Justice.
So, you can't tie together two products according to this tying doctrine.
You can't tie together two products and offer them for one because that eliminates competition and all these bad things are going to occur and all of the people who make lots of money who are trying to invest in Netscape are going to do very badly.
So what happened was Microsoft said the browser function has now been fully integrated into Windows And that the consent decree explicitly allows it to sell integrated products, right? So this is all going on in the 90s.
And so what happens is, Section 1 of the Sherman Act from 1890, right?
We want to make sure we have all the latest legalities.
The Sherman Act from 1890 and Section 3 of the Clayton Act of 1914 prohibit tying agreements that, quote,"...restrain trade substantially." So there's a vast antitrust case law that forbids firms with dominant market shares in one product, the tying good, from requiring buyers to take a second product, the tied good, as a condition of sale or lease.
So if you are the market leader in SUVs and you say, if you buy my SUV, I'm going to throw in this lawnmower for free, then that would be illegal under these antitrust laws because you would be harming the interests of lawnmower manufacturers.
It's using your clout to no good.
Of course, the Consumer might want a free lawnmower, but hey, this is not about the interests of the consumer.
This is about protecting the free market.
So... Oh, and by the way, this is from a von Mises Institute article from September 1998, volume 16, number 9, by Dominic Armentano.
I'll post this on the board, but it's interesting.
Let's just sort of see how this goes.
Now, the other question that came up in this regard...
It's, of course, the self-interest of consumers.
Perspective PC buyers want a total product as big and wide a feature set as possible for the lowest price.
So, from a consumer perspective, Windows with a free Internet Explorer, integrated or tied or whatever, is better than Windows without Explorer or with Explorer at some additional cost.
If you can get a free browser, so much the better.
Now, of course, PC manufacturers are not coerced into taking Explorer, for sure, because the PC users are the ones who want Explorer with their Windows.
No manufacturer of PCs could risk selling the product without including Explorer if some other PC manufacturer is going to include Explorer for free.
So it's like, hi, I'd like to sell you this personal computer for $1,000 with Windows, but no Internet Explorer.
And another guy down the road is going to say, I'm going to sell you this PC for $1,000 with Windows and an integrated, fully supported Windows Microsoft Explorer included in the price.
And no consumer is going to want the latter, so it's not coercion, it's just simple market competitiveness that make people want to do this.
So there's no real way to get around this.
The courts be damned.
This is sort of the facts of the matter.
And you can't just sort of snap your fingers and change that in terms of motive, right?
I mean, you can certainly pass laws and do whatever you want.
But for those of you who remember this thing kicking around, it really was quite the exciting integration scenario.
Microsoft, you could say, deliberately integrated Windows and Internet Explorer because it's really kind of silly to open up The file explorer and open a website.
It really doesn't make that much sense.
Not many people do that. But they integrated it all together to say, hey, it's not one product.
We're not tying a free product with a non-free product that has market dominance.
It's all just one product.
So Department of Justice, go take a long walk off a short pier.
And this was, of course, Bill Gates' approach because he had yet to come up against the power of the state.
And so he thought that a rational argument might hold sway.
Now, Microsoft, of course, did not say to manufacturers, hey, I'll sell you Windows, but you cannot install Netscape in any way, shape, or form, because what do they care?
It's just a program, right? So, if you wanted to be a Dell or whoever, you could get Windows up and running on your PC, and then you could install, at that time, I think it was from floppy disks.
CDs were just coming out, I guess, as consumer delivery mechanisms.
Certainly wasn't any broadband, so downloading it for the consumer would be completely hellish and expensive and time-consuming and technically confusing.
So Microsoft didn't say, well, you can't have any kind of browsers other than Internet Explorer.
It's just, if you look at the labor, right, you simply cannot sell a PC for the same amount if it comes bundled with, as part of the install of Windows, Internet Explorer.
Or if you have to have someone, or even if it's a ghost image of a disk, you have to have somebody set up and support the Netscape experience, which you would then post-installing Windows.
So the additional labor to install a competitive product really doesn't help the consumer at all.
In fact, it's just going to add to the price of the computer.
And this idea that if Microsoft sells more browsers...
That somebody else is automatically going to sell fewer browsers is a complete economic fallacy, and it comes from just a fairly fundamental lack of understanding or lack of education about economics.
So, for instance, if you have a cell phone and I have a cell phone and we're the only two people who have it, what is the incentive going to be for the third person to buy a cell phone?
Well, not that great, right?
So you have to get a whole bunch of people who have cell phones in order for cell phones to become really valuable.
You don't necessarily want to call somebody at home all the time, but the more cell phones that you get, the more valuable it's going to be.
And so, as more and more people get onto cell phones, then you get cheaper and cheaper rates, and so the cell phone market goes up.
And so, this is a very important thing to understand.
Somebody selling a lot of product can create a market.
And we'll get into Say's Law.
I've been meaning to do this for a couple of weeks, that supply creates demand.
We'll get into this in another time.
But just sort of trust me on this one.
You can look up Say's Law if you like.
But if somebody sells a whole lot of product...
This can actually cause the market to really explode, and then what happens is everybody wants a browser.
The market for the Internet and for browsing has really been blown wide open because, let's say that Microsoft bundled it as it did, bundled Internet Explorer with the operating system, then a whole bunch of people are going to get on the Internet all at once.
Now, because there's a whole bunch of people who want to get on the Internet all at once, Content providers are going to try and add more value to the internet.
They're going to invent search engines that are great.
They're going to put news sites up.
They're going to put whatever is going to be useful to consumers that people are going to come and basically browse ads with stuff in between.
People are going to create a lot of content for the internet.
Why? Because more and more people are getting on the internet.
Now, of course, as more people get on the internet and more internet content gets provided to people, then the demand for browsers goes up.
And then people start to optimize their internet experience.
So what happens is you start to compete based on a feature set.
And yeah, okay, you got a bit of a hump.
But that's not a big...
Because it's already integrated with the operating system.
But that's not such a big deal.
There's lots of people who compete with Microsoft...
In productive ways.
But what is happening is the demand for browsers goes way up.
Way, way, way up.
When Microsoft produces lots of browsers and integrates them for free.
It's just that you end up competing directly on the merits of feature sets.
And there would be much less of a market for Netscape if Internet Explorer was not bundled with Windows.
Now, of course, the Netscape manufacturers...
What was it? I can't remember his name.
Anyway, the Netscape guy, Mark Andreessen, I think his name was...
He and his swarthy band of layabouts ended up arguing and saying, well, it's not fair, because we're competing just with a browser, and Microsoft is competing with a browser and an operating system, and that's just not fair.
Boo, boo, boo, boo-hoo. Well, as this gentleman in the article I'm occasionally referring to at traffic lights while sitting in my car, for anyone listening on the police scanner...
This doesn't really make much sense, right?
If I'm going up in competition against somebody else in an IT department, so somebody's looking for a director of application development, say, that I might be going for an interview just now, looking for a CTO kind of guy.
Now, I'm a CTO guy, and I can design systems, and I can code, and I can manage technical teams, but I can also speak at conferences, I can write magazine articles, and I can sell.
So I'm able to do two things.
Now, if somebody's going up against me and says, well, that's just not fair.
That's just not fair.
Staff can do two things, technical and sales.
Let's just say I can only do two.
And I can only do technical and would hate to do sales.
Well, what's wrong with that?
I mean, what's wrong with that at all?
If I'm willing to work for the same price, it just means that you're overcharging for your services.
The analogy that's used in this article is ballplayers who are both defensive and offensive are better.
If you're just a good defensive player but you can't hit, you just may never make the majors.
To be good at two things is better than just being good at one thing.
And so it doesn't really make much sense to say that we should level the playing field by making everyone compete in just one area, if some people are good at more than one area.
It's like saying, Lindsay Lohan should never be allowed to sing in a movie.
I mean, okay, there may be good reasons for that, but let's just say that Lindsay Lohan should never be allowed to sing in a movie because I can't sing.
And my cleavage is a little less impressive.
But... It doesn't really make much sense to restrict people's abilities and say, well, we should only really compete on one thing.
One thing and one thing only.
And that's how we should level everything.
Because that really doesn't make much sense at all.
And, of course, it's of no benefit to the consumer.
And it's not, of course, allowing the free market to do that voodoo that it does so well.
It's also similar. All businesses in the world, and this is true because there's a state.
I don't think it's anything, if there were no government, this wouldn't really be a possibility.
Every business in the world, because of the power of the state, is very, very much tempted to take the political route rather than the route of innovation.
And what I mean by that is there's some clothing manufacturer who says, well, I can't compete with the penny-a-day labor that's going on in sweatshops outside in the slums of Singapore.
I have to pay my guys 15 bucks an hour, and they're getting away for a penny a day and a rat's leg to eat, and I just can't compete, and this is wrong, and this is bad, and boo-hoo, boo-hoo.
Sure, it's bad for you.
I understand that. But it's great for the consumer to get t-shirts at a buck rather than t-shirt at ten bucks.
And it's great for everyone else whose jobs are going to be created because of the extra nine bucks in the economy.
This is a good thing.
It's also great for the people who are working in the sweatshops in Singapore because the only way to get people out of those terrible working conditions is to raise the demand for their labor.
So, yeah, I mean, it's great for everyone except you.
I understand that, but I don't see why everyone else should suffer just because you are not innovating, right?
So you could take your T-shirt manufacturing line and you can convert it to something which can't be replicated in Singapore and you can invest to whatever, right?
You can robotize, you can do whatever, or you can become a redistributor and just set up a whole bunch of stuff in Singapore and have it manufactured there.
There's lots of ways to do it.
But this is the sort of basic example.
International trade always falls into this category, where people just say, well, it's not fair, they have no economics, they have no environmental laws, no health and safety laws, and they're able to out-compete us, and it's just not fair.
Well, you know, life is not fair.
I mean, life is not fair.
And I don't really see how using force to...
To deal with particular issues in this area makes it a whole lot more fair.
I don't think that adding force to the equation of a difference of ability or price makes anything a whole lot more fair.
It's like, my brother's taller than I am, so I'm going to punch him in the stomach, and that's going to even it out, you know, for a little while, until he recovers and whoops my ass.
And of course, the reason that this doesn't work, or sorry, it works in a political context, but the reason that this shouldn't work, I guess you could say, the reason that this shouldn't work, is that of course it all comes down to one thing.
What does the consumer want, want, want?
I know, I know, it's shocking.
It's beyond shocking to think that we might actually ask what the consumer could conceivably want.
But I still think that it might be worth thinking about it from time to time.
Because, see, to me the whole question around antitrust and the whole question around sort of bi-American and all this kind of stuff is, you know, take your case to the people.
If you think that it's a really great idea that people should buy American, that's great.
Then, you know, spend some of your own coin and buy some ads and do this, that, and the other and make the case that people should buy American.
And if people say, well, it's better for the economy if we have Netscape as well as Internet Explorer, it's a really productive use of labor to have two competing browsers Rather than having all the people who were working on coding this, the last version was a Java version of Netscape, I think. Rather than having all those people end up doing something productive with their lives, which people actually want, and driving down the cost of CRM systems or SAP systems or whatever by applying their expertise, they should be coding stuff that nobody wants.
We should pay people to dig holes and fill them back in again, and that would be really the best conceivable way to use their economic talents and labor.
Just, you know, take the case of the people.
Just take the case to the people.
That's really all that we're talking about in this.
Because if you can make the case to the people, then I think that you should be very proud, and you should absolutely go and get people to buy your product, even if it is a complete waste of time and money for people to build it.
Be honest. Be open.
Talk to them about the sentimentality of what it is that you want to do.
Well, you know, you may not really want it.
It's not a whole lot better. But boy, I would just really like it if you guys could see your way clear to buying my products.
Because, look, I have all of these workers who depend on me and blah, blah, blah, blah, blah.
And if you can make the case, then fantastic.
You don't need the government. And if you can't make the case, then it doesn't really seem very democratic, but fundamentally with antitrust, it is all a complete nonsense from that standpoint, because the consumers are very clear.
The consumers say, yeah, hey, I get a free browser that I don't have to download and install?
Fantastic. Saves me 40 bucks.
Saves me two hours of dial-up fees.
Saves me an install. Saves me a possible system instability.
I get one place to call for technical issues where they don't say, ooh, sorry, we don't support Netscape.
We only support Internet Explorer.
If you call Microsoft, there's some system problem.
So, and, you know, what's the difference?
Not that much, right?
It's a dime's worth of difference between the two browsers.
So it just never really made any sense.
Plus, what was the overhead for people who were developing web applications?
To have to support both Netscape and Internet Explorer.
Oh, what a mess. It was a complete nightmare.
So, overall, it was far less efficient to have this in the marketplace where you had these two competing browsers.
And so, fundamentally, the market decided, and you can do all the antitrust hoo-ha that you want to, and you can force people at gunpoint to do this, that, or the other.
But it doesn't really make any sense.
It's completely vile, evil, unjust, and it's a sickly temptation, right?
I mean, Netscape could have survived if they hadn't gone the political route.
And one of the reasons, by the by, just as we end up here, one of the reasons that Microsoft was able...
To compete successfully with IBM was because IBM was embroiled in its own multi-hundred million dollar, 13-year battle with the Department of Justice over innovation, which just killed the desire to innovate within IBM. It just became too risky and too scary because the company almost went down based on this whole problem.
So, it's kind of funny that Microsoft ended up getting hammered by the same thing that gave them a competitive advantage vis-a-vis IBM, but that's what I haven't been said.
That's just sort of a minor wrinkle in history, but we'll talk a little bit more about antitrust as we go along, but I think this is a good introduction to the issue.
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