Bolding mine.
Somebody should talk to Goldman Sachs, Wells Fargo, Bank of America or any member of the one percent about this! They’ve got capitalism all wrong! I thought capitalism was about using money to give oneself and one’s offspring an advantage over all the peons, based purely on the way it actually works.
We accept capitalism because it can, under proper guidance, have this effect. We accept capitalism because it can, under proper guidance, permit more freedoms than the alternatives. We value individuality, but not individuality at any cost. We value rewarding good work, but capitalism has never been seriously considered as equivalent to a meritocracy (but it is closer than alternatives). We have a lot of values, and capitalism isn’t totally antithetical to them.
Under proper guidance.
Do you think we live in a purely capitalist society? Do you deny that Microsoft acted differently once the Justice Department was watching it? I worked for a company that was not charged with monopoly practices (when I was there anyway) but had dominant market share, and we were damn well told to watch what we did.
We know from the experience of the late 19th century that monopolies do grow in what is close to a pure capitalist society.
As for your laughable assertion that capitalism is about service to your fellow man (which Adam Smith directly denied) - how do you explain the many companies that have a market strategy of less than exemplary service? Capitalists exist to maximize their income, which may or may not involve keeping their companies growing forever.
There is an interesting article I’ve linked to before that gives a useful perspective on post-rational American thought about free markets. It’s written by a theology scholar who starts to read business articles and …
Another excerpt:
Well, there’s Krugman and the Marxists to the left of him. Not to mention that very few politicians adhere to the market notion, since corporations are not the outgrowth of market forces, but the result of a legal fiction perpetuated by the state. The Republicans are just more apt at using the rhetoric of free markets.
Color me curious: Did you click the link and read the article?
No, but I did after I read your comment and he didn’t propose the names of any of the sceptics. He didn’t claim they didn’t exist either.
What’s interesting is that there is an implied schism between materialism and spirituality that’s being bridged: however, materialism was the basis for the first assault on the notion of “free” markets by Marx. In fact, consumerism and spirituality have enjoyed a long history in the United States. Prosperity theology may be relatively recent, but there was a book from the 30s called “Jesus was a Capitalist” or something…
Going back to the OP, a concept frequently overlooked in these discussions is the role of intellectual property rights. MS became successful because they came up with a product people wanted. But they became huge because the government granted them monopoly power on MS-DOS (and later Windows) operating software. Notice the use of the word there. They were the only company allowed to sell a program called MS-DOS. Once written, any idiot could copy the software and load it on to a computer. And then sell it to customers. But Microsoft was the ONLY company allowed by force of law to do that.
Technically speaking, that’s not capitalism or the free market. That’s government intervention allowing a company to restrict a resource and manipulate the price. Likewise Apple managed to crawl from the gutter because they had a product people desperately wanted. Once developed it doesn’t cost much to make an iPod, but the government through force of law won’t allow others to do it, so Apple gets to keep the price high. It’s pretty much impossible to be a monopoly when anyone can remake your product.
So now think of all the companies that came near to being monopolies and ask yourself how much intellectual property played a role. Then look at the problems these same companies are having in China where they refuse to respect our notion of intellectual property.
Without governments granting and enforcing intellectual property, would there be more competition or less?
I don’t think that even the staunchest of free market advocates think it includes theft. In any case, the objection is not that the situation didn’t allow someone else to load MS-DOS for free, but that companies which had something better were locked out of the market. In the early days that wasn’t even Microsoft, but IBM which more or less defined compatibility.
Copyright infringement and theft are two separate crimes.
And the law is a bit of a mess wrt IT-based IP.
In the case of Microsoft, I would agree with emacknight that it’s more a story of IP law than market forces.
The IBM deal was a big part of their early success, then they shut out competitors; easy to do on PCs where compatibility is all-important. Their downfall (though they’re still one of the world’s biggest companies) has mainly been due to the relative growth of other markets rather than anyone making headway in desktop OS.
It is neither IP law nor market forces. It was IBM blessing but one OS. Which, if you remember, MS bought, and didn’t create. It would have been nice if MS-DOS were open source, but that probably would have hurt compatibility. It wasn’t all that hard to write either, and there were other OSes out there - perhaps better - which could have been used if not for the IBM blessing.
BTW, if there were no means for MS to profit from MS-DOS, do you think they would ever have developed Windows? I suspect it cost a lot, especially since it took them three tries to get it right. We might be still sitting at command line - which as a UNIX person would suit me just fine, but probably not many others.
God not another IP thread.
No, I think a GUI OS would have happened one way or another.
Perhaps there would have been a battle between rival OS until one pulled away and then locked out all rivals. Alternatively, if something Linux-like had arrived early on, people may have grown to expect OS to always be free (there would still be plenty of money to be made developing them, but nothing like in our reality).
Something like Linux was available then - the Berkeley UNIX distribution. Someone could have ported that to a PC when one got powerful enough. Bill Joy did for the first Sun machines.
But I doubt it would have taken off, because of perceived complexity, and because IBM sure wouldn’t have supported it. I believe that there were some PC-based UNIXes back then, but nothing ever gained traction. In fact I think one even came from Microsoft.
Everyone was still sensitive about market fragmentation from the Commodore/Apple/TI/Atari days that software developers were sure not going to support it.
I remember an Analog story from that time about a world in which cars and roads were like computers - incompatible gas, tires and even roads.
So I doubt if there would really be plenty of money.
The amount of money would be the same, it would just be dished out among more parties. Microsoft had at one time a nominal value of over $600 billion. That’s a pie big enough to feed a whole family of companies.
As for market perceptions at that time, you don’t need everyone to believe there is an opportunity there. If just 1% of software companies see an opportunity that would result in plenty of OS choices.
Anyway, now I’ve had the last word, I should point out we’ve gone slightly off-topic 
Someone was always going to get popular in the OS market. The question isn’t whether one would grab a market, but whether it would abuse that market power because market share is not synonymous with power. Most industries have a hard time abusing market power. Coke, for instance, is quite limited into how much it can shit on Pepsi. Microsoft has a bit more tools in the toolbelt. IMO the best evidence of this was the Java nonsense MS went through. Write-once, run-anywhere technology is the dream of dreams and Java wasn’t a bad implementation at all. You can see the same thing with other languages, like python or racket. The web is now trying to be positioned in that way, too. MS resisted all these things because they didn’t own them. That’s normal business behavior. But normal businesses have extremely limited market power, even if they have market share.
I agree totally with the stuff I deleted. And this also. If MS didn’t wish to implement a new technology, that is their right. But as with the Java example, they implemented broken versions of technologies they didn’t like. Another example - in any HTML book there is the standard way and the IE way. They also did stuff like have secret APIs that their software, like Office, could use and which was not available to others.
Companies without market power can do this, because dissatisfied customers can switch. A company like MS whose customers for its OS were pretty much captive should play be stricter rules.
Not really - Microsoft is an excellent example of capitalism and competition.
First. MS didn’t have $600 billion to throw around before they were a monopoly. I’m talking about the early days. Back then they did well in large part because IBM was so clueless.
As for 1% of companies seeing an opportunity, the data is the same for everyone, so you either get lots of entrants or almost none. If you are talking about the very early days, there were some variant OSes, but IBM standardizing on MS-DOS killed them. IBM couldn’t even sell one, remember. Only a very different value proposition like Linux - give it away, and make some money on support - kind of succeeds. Hardware vendors like Apple, Sun, HP and IBM have no trouble selling their OS on their hardware.
Anyhow, that 1% of companies would either find something revolutionary or soon go out of business. The second happened. Move to a different platform, like phones, without MS dominance, and see how competition blooms.
I think we’re talking past each other as I agree with most of what you’ve said.
Except for:
…which is a very curious statement. Firstly, the data is not the same for everyone; different people will have access to and will bother to research different amounts. Secondly people will of course often behave differently given the same data.
The home and office PC field was new and exciting enough to attract plenty of interest even if it looked like a money pit to everyone. Which it didn’t.
Market conditions do look the same to everyone. Disruptive technologies do change things, but an OS doesn’t count as that. Back then IBM opening the spec did cause an explosion in the number of companies making PCs. Which eventually shrunk as it always does.
As for the OS, a few people did see an OS opportunity. They didn’t last long. More saw an office productivity suite opportunity, many before MS. They all got wiped out also, in no small part because of the monopoly. Again, the only viable alternative these days is open source.