Hey, by most objective measures, the Moto processors back in the early 80s were better than those from Intel, but IBM chose Intel anyway. Ther are LOTS of reasons, not the least of which are marketing, that some products succeed and others don’t.
But, does anyone not see the iron of arguing about who controls the market share of a product which anyone can get for free by simply downloading it?
If no one sees the “iron”, maybe someone see the “irony”.
Preview, preview, preview…
What advantage to the end user does firefox have over IE? After all, IE is free…its bundled with the OS. So, there would have to be some compelling reason for the average user to load a new browser over one bundled with the OS, correct? What is that compelling reason? Answer that question and you’ll better understand why IE is still dominant in the browser field. Change some of the conditions (i.e. say MS starts charging for IE, or say that IE becomes markedly inferior or disfunctional, or incompatable with some futureware) and this may change. Its still the market at work.
Not at all. The barriers weren’t any lower than now…they were just lower COMPARED to now. Its all relative. At the time it was a pretty great achievement, and pretty unexpected too, and the ‘barriers’ at that time are comparable to the ‘barriers’ today. As to entry being ‘absurdly high’, again, its all relative. At the time AMD had to build fab plants and distribution systems also…how do you think they did it? Same way it would be done today…with venture capital. I guarentee you that if you, Shalmanese, design and test a microprocessor thats either superior to what Intel/AMD currently have, or, a process or system that allows you to build compatable processors more cheaply, you’ll have venture capitalists knocking down your door. Just out of curiosity, where did you get that ‘billion’ dollars figure? Did you make that up or did you read that somewhere?
-XT
Yes…I see both the iron AND the irony. I actually tried to make this point in my last post.
-XT
I think you’ve got the tail wagging the dog. The government didn’t decide one day that an oil monolpoly would be a great idea and then set out to find a man they could use to build one. Rockefeller was the one who started the process. At a certain point, he became wealthy enough that he was able to convince some government agencies to support him. If there had been no government, Rockefeller would have still created his monopoly.
As for Gates, I realize that a lot’s been posted on this subject in this thread since I last viewed it and I haven’t had a chance to read all of it. But I will say that effectively Gates has created a monopoly. Even if he doesn’t literally own the entire industry, he owns enough of it to have control.
Microsoft operating systems are used in something like 90% of computer I believe. Could any potential competitor afford to ignore this sector and hopr to succeed by selling their product to the remaining 10%? And Microsoft has not hesitated to use their domination; they have “negotiated” deals with supposedly independant companies for favorable terms and threatened these companies with boycotts if they give the same terms to any potential competitors.
Now that you’ve all beaten this distribution/consolidation thing to death, would anyone care to take a stab at the externality problems I posed on page 1?
The “if there was no government” argument is a huge strawman. No one here is arguing for that. And your post simply points a problem with government, not with the market. Of course businessmen will try to get favors from government, which is exactly why you want to limit the power of government in the first place-- not eliminate, but limit.
So your now saying that monopolistic bundling is a feature you want in a free market? not a bug? How exactly can this co-exist with a system in which the rich don’t get richer and the poor don’t get poorer? If even a system that is given away for free is only gaining market share at a snails pace, how exactly do you propose anybody ever make money in the browser market?
When I say inoperable I mean, ultimately something like replacing the TCP/IP stack but in a much more invisible manner. It’s hard to point to refer to real world events because MS are constrained by anti trust laws but even within that framework, you can see deliberate inter-operability problems, and not always with evil intent either. Windows file sharing, used to be a windows only thing until samba came along and that required significant reverse-engineering. Windows word documents could only be opened with MS products, until star/open office came along and reverse engineered it. MSN is a windows only IM program AFAIK although it is periodically being reverse engineered by trillian and co until they change the protocol. .NET is still only a windows programming language although it’s being ported at the moment, but only with Microsofts blessing. Code generated by MS Visual Studio contains a lot of MS specific frou frou which makes it a pain to compile with any other compiler. WMA/WMV is a windows proprietry format that is currently widely used among online music stores and is likely to form the base of MPEG-4 for DVDs. DirectX is a windows standard and theres no way in hell anybody is going to port that without a huge headache and many thankless manhours. All of these, I think are fairly legitimate and ethical business decisions on MS’s part but they still all lead to a far, far more painful experience if you choose to step significantly outside of MS-world. In fact, I would say the crowning achievement of the linux project so far is how compatible they managed to get it with windows, not exactly something that would make a good profit/loss statement if it was a commercial product.
Now imagine if anti-trust legislation didn’t exist, MS could very easily make it hard to impossible to read .doc files, share out windows partitions, compile .NET code to linux and a myriad other subtle changes. And if you think the average joe cares whether MS word is run on an open or closed file format, then your in lala land. Time and time again, consumers have hardly battered an eye, and I wouldn’t expect them to. The only thing keeping MS in check is the DOJ. Even without anti-trust legislation, virtually all the major games are written in DirectX and are almost impossible to port to linux. And, faced with the choice of supporting the opressed, idealist, freedom loving radicals or being able to play Half-Life 2… well, I just dont think hippy freedom lovers stand a chance.
xtisme Intel have built a $2 billion wafer plant in Ireland(2002), Arizona (2003) and Oregon (2004). This is just the first 3 results I pulled off google. According to that last link, Intel have spent $12.8bn in the last 4 years building 7 plants. Not chump change :eek:. The problem is, you just can’t come up with this bright idea that will have the VC’s drooling. Intel spent $4bn in 2001 on R&D and I would wager it’s spent well in excess of $50bn in just CPU research since it was founded. Even with all the public domain knowledge out there, there is no magic shortcut, you might need to spend at least $25bn to get to where Intel is now… if your lucky. If you know a VC that will stump me $25bn on an uncertain prospect… well, I got a bridge I can sell you. Its not so much a matter of inspiration as perspiration and nobody has that sort of money to throw on a long bet. AMD managed it because they kept lockstep with intel every single step of the way since the 386 days. If you have a look at the history of CPU makers, what you see is a huge turnover in the early days with dozens of makers starting up and going bust in the early stage, then a long, slow dropoff with nobody entering and companies being sporadically picked off. The situation now, in both the OS and processor market is a lot more mature than they were 5 or 10 years ago and the analogies just dont work.
I think it was the length of the questions people found daunting. 
I’ll take a shot at answering them, though these answers will have to be off the cuff as I’m at work today. Also, your questions might be a bit out of my league to provide satisfactory answers to you. Still, I’ll take a shot.
Well, I suppose that the key here is how close to the bone we cut the government regulations. Assuming for a moment that we cut them completely out (which not even I am suggesting to completely eliminate all government), then I the only thing I see is self regulation of the polluting industry and your ‘boycotting’, i.e. consummers choosing one manufacture/power producer over another based on its pollution record. Perhaps in an unregulated free market world new companies would spring up (supported by the market…i.e. there would be a consumer base large enough to make it economically feasable) who would act as a watchdog for the public on the industry…I’m not really sure to be honest. It all depends on exactly how the public values ‘the environment’…in a free market even the environment would have a value to people, and would effect their decision process. If the public valued the environment they could exert influence to make company’s operate cleaner or more efficiently…or, if they didn’t and there was a value placed on such things by the public, then other competators with newer/cleaner running equipment would come along and steal their market share.
Education. I’m unsure why you think that education in a ‘laissez-faire’ environment (which isn’t exactly what I’m proposing) would be underproduced. Certainly education is a personal thing (i.e. its MY children I want to educate as help out, not necessarily YOUR’s), but there is also a value placed on it, especially by parents who have school age kids, as well as by grandparents of such kids, etc. With a value placed on education, there would be a market for it…i.e. company’s would compete to provide education in a free market. My thoughts would be that the education would be BETTER in this environment…at least better than the current fare being served up in the public school system. Ah, but what about the ‘poor’?
I guess it depends on how poor, and also on how close to the bone we cut the government. Lets say we cut it all the way (which is what you are asking)…what happens to the poor? Well, aside from the fact that charities will still be out there (and IMO doing better than today), and that philanthropers will still be out there, I think even in poor neighborhoods there would be a market for schools…after all, poor people see the need for education as well as anyone (I should know), and so place a value on it. True, its possible that the education they get MIGHT be inferior to schools catering to the richer clients…but then again, it might not be (my thoughts on the REAL differences between a rich private school and a poor one are that there would be all kinds of ‘perks’ at the rich school…pools, better food, more bells and whistles. But the CONTENT would be pretty much the same, as market forces would dictate that the education being served up be acceptable…or people will take their money elsewhere. Even the poor can make choices about what they want and like, and what they don’t). And I would be hard pressed to see how a free market school system could be WORSE than what many of the poor are currently being served up with by our public system.
Far fetched to think that private schools would cater to the poor? Well, one has only to look at the Charter School system in New Mexico. True, the government picks up some of the tab (and they still qualify for eRate funds of course for technology from the federal government), but local communities also pitch in (voluntarily…in fact, they have to petition to have such a school and provide a percentage of the funds needed to build and operate it), and Charter Schools are outside of the regular public school system. And this is being done today to bring decent (usually) schools to rural or poor hispanic and native america areas throughout the South West. I can see such a system operating in a free market as well.
Higher education? Well, again, I can see higher education systems in a free market…because there IS value there. They might change their curriculum somewhat to more practical things (or not…depends on the value people place on such subject and what market there is for them), but it would still work. Banks currently give student loans to just about anyone who qualifies for college…that wouldn’t change, again, because of market forces. I can also see some corporations sponsoring students (in the hopes of bringing qualified people on board after graduation).
What about the poor? Well, as I said, there are student loans, and for minorities there are any number of non-governmental organizations willing to give grants. Thats how I went to college myself, on a number of non-governmental grants to students of hispanic origin. I see these kinds of organizations, as well as philanthropers and donations to charities increasing markedly as people no longer are burdened with such high taxes…especially in todays world where people understand and sympathize more with these issues. Even in the bad old days in the US of virtually no taxes the rich donated large sums to education…today it would be even more IMO.
I’m going to break off here. Hopefully someone else will come along and answer the rest of your questions about health care and such. If not I might try and take it up again tonight, depending on how things spin off from my answers…and work and family of course.
Also, I want to try and get the next thread started this week on Socialism, but I’m having trouble formulating it…to me Socialism is a mixed system (as its currently practiced anyway). I’m unsure how to even formulate the question as how a ‘pure’ Socialist system would be, let alone how it would work.
-XT
By providing some value or service that people are willing to pay for instead of using whats free. How exactly SHOULD it work? MS is willing to bundle their browser for free. Great! We the users get a free browser bundled with our OS…its a win win situation for us. Should we force people to have to buy a browser by another vendor who’s utility is perhaps marginally better, but costs money, or is a hassle (for the average user) to download and install? How would people make money in the browser market? Perhaps they won’t. Or perhaps they will come up with a better marketting strategy, or a product thats so superior that MS is either forced to improve its own free add on, or lose market share. I don’t see how you equate this with the rich getting richer and the poor poorer. I see it as a win win situation (i.e. the rich get richer and the poor get richer too).
You seem to be going back and forth between applications and interoperability on a network level. First off, IF TCP/IP is ever replaced it will still have to be an open system…otherwise no one will be able to write code to it, and therefore it will never be adopted. That means that alternative OS vendors (like LINUS or Apple) will ALSO have access to it. MS trying to force the issue by making only THEIR OS work on the new transport will have the effect of cutting their own throat with a very sharp knife…it would kill them.
As to the rest, I’ll try and take a shot at them in order:
Long before the anti-trust suits brought against MS (which were mostly BS IMO, but thats another subject), MS went back and forth on these things. Certainly they would only release the full code of an up and coming OS to certain vendors (who were partners), and release incomplete code to competators in various applications markets. This wan’t ‘evil intent’…it was BUISINESS. In most cases this gave MS and its partners an initial edge in deploying new (or modified) apps over their competators, because after an OS was released said competators would have access to the full code (and platform to test on as well). It never really prevented alternative app vendors from competing with MS and its partners in any market, so it never really became a market factor…i.e. users still had choices in software, though MS tweeked the system in such a way to stack the deck in their favor. It didn’t piss off the industry enough (or the user community) to open the door to a competetor to bring out a new OS to compete with Windows. What it ended up sparking was some of MS’s competators lobbied to get MS slapped with an anti-trust lawsuit and other government censures, instead of creating a new and better GUI OS to compete directly with Windows for a share of the personal PC OS market. I don’t think I have to tell you which side I think played it dirt (that ‘friends in Washington’ game always pisses me off).
They are mostly all legitimate. MS has built a better mouse trap, and been smart enough to co-opt some of the standards for video and audio hooks by deciding on a standard and incorporating it directly into their OS by being the leader on a number of the standards adoption committee’s. They have managed to keep both hardware and software vendors on board by being responsive to the market and not stagnating but constantly moving forward. These aren’t problems with the system, but examples of it working. Want to beat MS at the OS game? Well, build a better mouse trap and market it so as to take enough market share to be able to be in the drivers seat as far as new emerging standards goes. To do so you will have to play the MS game until that time…standards are standards, once adopted. The key is to be in a position to have influence in WHAT standards are adopted.
Your LINUX example is a good one. Once standards are set, then they HAVE to be compatable with said standards…or hardware and software vendors won’t write code to them. Video card manufacturers won’t make chipsets just for LINUX…its too small a market. Driver developers won’t develope to radically different standards, etc. However, let LINUX ever become a large market force (something thats possible) and THEY will have some say in the future with emerging standards.
Anti-trust legislation has nothing to do with it, and it never did. LINUX is an OS. Microsoft can choose NOT to write applications to LINUX, true enough. They can continue to change their formats (within reason…again, because they have to keep not only their customers happy but the other applications/hardware vendors out there as well), again, true enough. However, they can’t prevent other vendors writing applications directly to LINUX/UNIX…i.e. Word Processors, Spread Sheets, Multi Media apps, etc running natively on LINUX. Nor can they prevent game manufacturers from writing code that natively runs on LINUX…they just don’t bother because LINUX has such a small market share today. However, if MS wants ANYONE to write code for THEIR OS, then the standards they adopt have to BE standards. Like DirectX. There is nothing MS can do to prevent a LINUX OS manufacture from getting ahold of the standard and reverse engineering their OS to enable them to play MS games, or run in a virtual MS mode…if MS DOES do that then how will ANYONE write code to their OS??? In order for anyone to write code that runs on MS Windows, MS HAS to adopt open standards…which a LINUX manufacturer is also able to get.
As to MS word being run in an open or closed file format, the key there is…does MS want to be compatable with other word processors? If they don’t care (i.e. if there really is no interest by users if they can run, say, Word Perfects latest document formats in Word and vice versa) then you are correct. However, putting their own format in a ‘closed’ configuration will have the backlash of OTHER word processor applications developers closing their own. Which means that Word will no longer be able to run them. In the mean time, OTHER manufacturers of word processors are perfectly free to share THEIR closed formats among themselves…giving them a feature edge, namely THEY can all share file formats among themselves, and its only WORD that can’t. Again, this has zero to do with anti-trust legislation, but has to do with how the market operates.
You don’t start up a company by jumping into the same production capabilities, marketting or R&D cycle as your number one competator. If I were building a new processor company to compete with Intel then I’ve ALREADY done my research for my new product (i.e. I already have a design on the board tested and ready to begin manufacturing). I’m also not going to (initially) even attempt to build as many processors as Intel does. I"m going to start fairly small and build my market share and my profits…THEN I’m going to do things like build larger scale plants and research and development for future products. Use google to look up exactly how AMD got started…thats the same model that could be used today if anyone came up with a superior (or cheaper) microprocessor design.
-XT
I was assuming complete laissez-faire, but I’d agree that the situation does change if we allow some govt regulation back into the picture.
In any event, I think statements like “if the public values the environment” misses the point that these sorts of negative externalities are structural issues. The root of the problem is that I, the guy owning a house downwind from the factory, am being forced to bear some of the cost of producing the factory’s product by being forced to put up with the fumes spewing from it. Now, I suppose one might suggest a market solution to the problem by requiring that the factory obtain permission from me before polluting my air, or, more generally, whenever someone wants to do anything that will negatively impact on the property value of others (which should cover negative externalities fairly generally), permission must be obtained. This, while being a neat and tidy market-based solution in theory, doesn’t look very workable in practice. Factories producing nitrous oxides in Ohio cause acid rain on crown land in Ontario. How do we figure out who pays how much for permission to produce NOX emissions when the effects of any single factory’s emissions are tiny for any given smallish piece of property, but extremely diffuse? In truth, we have a myriad of laws governing to what extent people can negatively impact others, from air quality regulations to noise bylaws to zoning laws. These laws are, it seems to me, all based on legitimate property rights concerns which, again, it seems to me, are most effectively and efficiently addressed by govt regulations rather than a vast web of contracts selling rights to pollute, etc.
Again, the issue is structural. Let us suppose that people are concerned in education solely to the extent that it improves their expected ability to pull down higher wages. They aren’t, but we’ll ignore the whole knowledge for its own sake thing for the moment. Now, in this case what they are interested is not so much having a really good education, but having a better education than the next guy - that is, gaining a competitive advantage. Now, if we compare a situation where the baseline is 0 - that is, if you don’t pay for it, you don’t get any education - then we should expect that, other things being equal, you’ll need less education to gain a competitive advantage than you would if the baseline were higher - say, a public high school diploma, bad as public schools might be. Hence, we should expect economically rational agents in the former case to acquire less education than in the latter case. And the thing about education is that it is a general good - I don’t only benefit from my own education, or even the education of my employees, but I benefit from the education of everyone, since a better educated workforce will be more productive in all respects. Or, in other words, some of the benefits of my education will accrue to people I can’t possibly hope to bill for them. Likewise with health care. One of the benefits of me being healthy is that I won’t infect the next guy with tuberculolis. I can’t bill him for that, though. Again, the issue is structural. If one can’t prevent people from enjoying the benefits of a good without having to pay for it, then that good will be underproduced relative to what it would be if people could be required to pay for the benefits they enjoy.
Now, if you can convince me that education doesn’t have this feature, all you’ll have done is shown that education doesn’t have positive externalities. You won’t have shown that goods with positive externalities won’t be underproduced by a free and unfettered market. See, the point isn’t in the details of the examples. They’re merely illustrations. The point is that the free market is supposed to work so well because it accurately transmits information about costs and benefits. But when costs are incurred or benefits are accrued that cannot be billed for, the information the market transmits becomes inaccurate, and the marketplace makes the wrong decisions (or rather, causes economic agents to make wrong decisions) if the goal is really to maximize benefits and minimize costs.
No I won’t. You’re talking about a hypothetical situation. I am under no need to show that the results of that hypothetical are true in any other situation.
Good, I’m glad you’ve gotten the point. No, are you going to argue that you are not under coercion if someone has a gun to your head because you can choose to be shot? No?
Good. Now that you’ve admitted they aren’t free, I’m sure you’ll be moving on to substantive discussion instead of blind rhetoric .
Nope, looks like you’re just going to repeat what you heard on the Free Republic. Too bad, not much point replying any more.
For MS to succeed in any ancillary market related to OS’s, they can use thier monopolistic bundling leverage to produce a barely adequate product and win nearly all of the market share. For any other company, they need to produce an outstanding product to even survive. 9 times out of 10, MS will take over this ancillary market and get bigger with the existing players going bankrupt. Thus, because MS has a monopoly on the OS market, they have a disproportionate amount of leverage relative to their size on ancillary markets and can do nothing but grow bigger assuming they are not massively incompetent. Every other company trying to compete with them cannot and will go bankrupt. The big get bigger and the small get smaller, you do not accept this?
Heres what I think would be a plausible scenario: MS announce a new protocol called STCP/IP which runs encryption over TCP and is a completely closed solution. For it to work, both sides of the network must be capable of running STCP. To the programmer, everything looks the same as this is a core OS routine. In 2005, STCP is released and the old TCP is termed compatability mode. Windows users who ping and discover an STCP connection will connect using it, otherwise they will use compatability mode. MS distributes a closed source STCP module to the major server software venors which is allowed to serve connections but not accept them. In 2007, MS announce that they would drop compatibility mode since every server is running on dual capabilitys. In 2009, MS announce their new server OS which, in an effort to make more secure, cannot, by design, make any transactions over compatability TCP. In effect, linux users are now disconnected from MS servers. In 2010, MS make several small but key changes to the STCP stack which means that all existing servers are broken, of course, MS releases patches for all of it’s recent software but say that all old software, including the original linux port, is unsupported and bad luck. So, the choice facing a company now is to either go all linux or all windows since they cannot accomodate both due to interoperability problems. With linux at a 2% market share and windows at 98%, I think the choice would be pretty obvious and linux(along with MacOS and BSD) would be relegated to the scrapheap.
You still don’t understand just how hard it is to keep compatibile with a set of closed source standards. Don’t quote me on this but I think samba was about 5 years in development and star office something similar, NTFS has been out since WinNT 4 and they’ve only just managed to support writing to NTFS partitions. Direct X has been out since Win95 and nobody on the linux side is even trying to support that because that would be a herculean, impossible task. This is all from a group of voluenteers who devote significant proportions of their free time to do this. The cost to any company of maintaining compatability with MS would be staggering and all MS have to do is jump to a new standard every 2 years and nobody could catch up.
How will anyone write code to their OS? like they are doing now, in .NET on Visual Studio using DirectX. Sure, the [il]language* is a standard, but the back end is proprietry and the only way to become compatible with it is via reverse engineering. And this is not a pleasant or easy task to say the least.
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As to MS word being run in an open or closed file format, the key there is…does MS want to be compatable with other word processors? If they don’t care (i.e. if there really is no interest by users if they can run, say, Word Perfects latest document formats in Word and vice versa) then you are correct. However, putting their own format in a ‘closed’ configuration will have the backlash of OTHER word processor applications developers closing their own. Which means that Word will no longer be able to run them. In the mean time, OTHER manufacturers of word processors are perfectly free to share THEIR closed formats among themselves…giving them a feature edge, namely THEY can all share file formats among themselves, and its only WORD that can’t. Again, this has zero to do with anti-trust legislation, but has to do with how the market operates.
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Except all the other WP makers have a market share of, maybe 1% made up of obsolete software from long dead companies. This is what a monopoly MEANS, even if every other manufacturer ganged up on them, they could still beat them handily.
You have no idea how a processor really works. It’s simply not possible for you to come up with a design to a 3Ghz processor in a vacuum. To build a 3Ghz processor, you need to assemble technology and knowhow to first build a 1Ghz processor and THEN spend an additional couple of billion to make it faster. To build a 1Ghz processor, you first need to build a 500Mhz… you get the idea. Theres no “magic secret” that any one man could possess that can make this any easier. And even if you did possess such a secret, its just not possible to do what you say you want to do and start small. To build a 1 3Ghz processor will cost you $2bn, to build 1 million 3Ghz processors will cost you $2.1bn. The capital outlay is so significant its absurd to think you could even get your foot in the door. And the AMD case simply does not apply, AMD started with 386’s, where the cost of entering the market was low, as evidenced by the number of companys which DID enter the market at that time. Not 2-men-in-a-basement low as it was in Steve Jobs’ time, but about 10-guys-and-a-VC type low. Nowadays, its absurdly high, $30 - $40 billion dollars high. Theres simply no way anyone could enter such a market. You can find the AMD history here. It seems even I was rather unclear of the history. They started in 1969 and, by the time they started in the CPU market (1991), they were already a fortune500 company. Hardly the man-in-the-basement-with-the-brilliant-idea model so beloved by free-marketers.
Gorsnak I assume in a perfect free market situation, there would arise a company which realises it’s profitable to bet on education. From a young age, people would be means tested and those which were both poor and smart would be offered a type of “bond” where the company agrees to put them through high school and university on the condition that it takes a certain percentage of their income for X years.
Actually, no. The majority of people (I believe the figure is around 80%) in the United States who have assets in excess of a million dollars were born into families that had accesses in excess of a million dollars. Only the remaining 20% accumulated a million dollars in their own lifetime.
So if one of the tents of capitalism is that big money is a just reward earned for hard work, effective management, superior talent, innovation, etc, how is this reconciled with the fact that four out of five of the people who are holding the rewards apparently earned them at birth?
That doesn’t even begin to solve the issue of education insofar as there are positive externalities. It might solve an unrelated issue, that of mitigating to some extent the lack of opportunity enjoyed by the poor, but it does nothing to solve the problem that economically rational agents will individually choose to acquire less education than would be collectively rational.
What you’re talking about is debt bondage. It exists in the real world; people borrow money and find they can never repay the full sum and end up being virtual slaves for the rest of their lives. In some societies, the debt is even hereditary so the children are obliged to work to repay money their parents or grandparents borrowed decades before.
I realize this is probably not the idea you were pursuing. But if thirteen year olds start signing contracts for their future labor, it’s not that big a step away.
Do you have a cite on this? A quick Google seems to indicate that it is the exact opposite:
I am enjoying the discussion, though - carry on.
Regards,
Shodan
Sorry I have been so long getting back to this thread. Its been a hectic week (making money 
) and I haven’t had the time to reply to Gorsnak and Shalmanese…both of which are going to require lengthy posts I think.
Hopefully I’ll be able to do reply this evening or this weekend…time permitting.
-XT
Talking about individuals rather than companies (the distinction was a bit blurred in the above discussion), that is not how it looks to me.
I am not opposed to rich people as such. If Eminem composes a great album that makes 10 million people happy and for which they are willing to pay 10 dollar each, then it’s OK with me if he makes 100 million (before expenses and tax).
That would be an example of “provide things that people want”. However, that represents but the tiniest fraction of cases of individuals getting rich.
Look at how Dick Grasso got rich (old link). All he had to do, was to convince a tiny (effectively less than 10 persons) privileged group of back-scratching insiders that he deserved to get a salary of over $100million for his work. Ignoring even the discussion of whether he “really” deserved that much money. It was a private decision by a tiny group of old boys who appropriate other people’s money and lavish it on each other.
Probably most individuals who earn millions, do so by landing a CEO job. Thus they are much closer to the Grasso scenario than the Eminem scenario. There are aggravating factors, too. Sometime ago there was an article in WSJ about executive pay negotiators. Extremely aggressive lawyers specializing in extorting ridiculous pay packages out of company boards, including those infamous clauses that even in case the CEO fails he gets an excessive severance package. The article said that these negotiators had been a significant factor in the excessive rise of executive pay relative to general wage levels.
Maybe I should add, being a supporter of free markets myself (albeit in combination with the evil C word), I see the excessive CEO pay not as a failure of free market (since it isn’t a free market) but a failure of Capitalism. In fact, it is another example of Capitalism (profit above all else) undermining free markets, along with the examples of monopolies, undue influence on government, etc.