Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Matthew Gardine » Wed, 12 Dec 2001 07:46:23



Quote from Adam Smith-Wealth of Nations:

"A monopoly granted either to an individual or to a trading company has the
same effect as a secret in trade or manufactures. The monopolists, by
keeping the market constantly understocked, by never fully supplying the
effectual demand, sell their commodities much above the natural price, and
raise their emoluments, whether they consist in wages or profit, greatly
above their natural rate.

The price of monopoly is upon every occasion the highest which can be got.
The natural price, or the price of free competition, on the contrary, is the
lowest which can be taken, not upon every occasion, indeed, but for any
considerable time together. The one is upon every occasion the highest which
can be squeezed out of the buyers, or which, it is supposed, they will
consent to give: the other is the lowest which the sellers can commonly
afford to take, and at the same time continue their business.

The exclusive privileges of corporations, statutes of apprenticeship, and
all those laws which restrain, in particular employments, the competition to
a smaller number than might otherwise go into them, have the same tendency,
though in a less degree. They are a sort of enlarged monopolies, and may
frequently, for ages together, and in whole classes of employments, keep up
the market price of particular commodities above the natural price, and
maintain both the wages of the labour and the profits of the stock employed
about them somewhat above their natural rate.

Such enhancements of the market price may last as long as the regulations of
police which give occasion to them."

This was written 270 years ago, and are still valid now. The Police
mentioned above are the DOJ.

Also, this rubbish about the US being a freemarket is nothing more than
nationalist rubbish. The US doesn't even hit the top 5 most libertarian
economies.

1. Hong Kong
2. Singapore
3. New Zealand

A freemarket is based on minimal government intervention, by the government
does not manipulate market prices and/or protect inefficient industries. One
only needs to look at the proposed 20% tariff on imported steel from New
Zealand and Australia as prime example of a country unable to cut the
mustard and handle a bit of competition. Or the quotas imposed onto New
Zealand dairy products imported into Canada, because the over subsidised,
unproductive Canadian dairy industry couldn't stand a bit of competition.
btw. New Zealand does not have any subsidises as our government believes
that lower taxes and economies of scales improves productivity, not building
walls, and imposing quotas, like what the US and Canada do.

*! now I've got that out of my system, now I can breath easy.

Matthew Gardiner
--
Windows, for those too scared to use their brain

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by flacc » Wed, 12 Dec 2001 08:58:53



> Quote from Adam Smith-Wealth of Nations:

Thanks, so true.

Quote:> The US doesn't even hit the top 5 most libertarian
> economies.

> 1. Hong Kong
> 2. Singapore
> 3. New Zealand

Hmmm, your intent is vague, but I could make a joke about the NZ
educational system here  :-)

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Matthew Gardine » Wed, 12 Dec 2001 12:10:00




> > Quote from Adam Smith-Wealth of Nations:

> Thanks, so true.

> > The US doesn't even hit the top 5 most libertarian
> > economies.

> > 1. Hong Kong
> > 2. Singapore
> > 3. New Zealand

> Hmmm, your intent is vague, but I could make a joke about the NZ
> educational system here  :-)

1. It was a rant.
2. What joke? the fact that people actually get taught about things outside
their own country, is that such a crime?

Matthew Gardiner

--
Windows, for those too scared to use their brain

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Adam Warne » Wed, 12 Dec 2001 12:19:00





>> Quote from Adam Smith-Wealth of Nations:

>> "A monopoly granted either to an individual or to a trading company
> has the
>> same effect as a secret in trade or manufactures. The monopolists, by
>> keeping the market constantly understocked, by never fully supplying
> the
>> effectual demand, sell their commodities much above the natural price,
> and
>> raise their emoluments, whether they consist in wages or profit,
> greatly
>> above their natural rate.

First a pedantic point:

<pedantic>
Erik does your newsreader have to butcher these quotation? Can you please
consider using a newsreader that is able to requote a paragraph without
turning it into an absolute mess. Matthew posted using Microsoft Outlook
Express 6 so this is no evil Linux * to make your posts look bad.

Look what happens if I press F to follow up:

Quote:> "A monopoly granted either to an individual or to a trading company has
> the same effect as a secret in trade or manufactures. The monopolists,
> by keeping the market constantly understocked, by never fully supplying
> the effectual demand, sell their commodities much above the natural
> price, and raise their emoluments, whether they consist in wages or
> profit, greatly above their natural rate.

The above quotation has been automatically reformatted to the correct line
length. See how the last line is a little longer? ("profit, greatly above
their natural rate." whereas in the original post it was "above their
natural rate.") There are two less characters available on each line
because of the extra "> " indentation.

To see if your post is going to be a mess, first save it as a draft. Then
open the draft. You will then be able to manually adjust the length of
each line. It will take ages. But then you will be able to appreciate the
time that a quality newsreader can save you.

Advocacy using an inferior client that messes up quotations makes anyone
doing so look unprofessional.
</pedantic>

Quote:> Funny, but other than one situation (the recent shortfall of WinXP Home
> lan licenses) I've never heard of a Microsoft product being
> understocked.  Further, since the cost to manufacture the product is so
> slight, Windows is most often OVER stocked.

In this case the scarcity mechanism is the price. Since licenses and media
are not expensive to produce you can 'manufacture' more than you intend to
sell with little marginal cost.

Quote:>> The price of monopoly is upon every occasion the highest which can be
> got.

> We know for a fact that the price of Windows is not the highest price
> which MS could get.  They could charge quite a bit more and get it, at
> the exact same rate of sale they do now.  We know this because other
> OS's have sold for more (OS/2 has always been at least $30-40 more
> expensive).

It's traditionally the highest price that can be got to _maximise profit_.
You might be able to sell one copy of Windows for $10,000 but you won't
maximise your profit that way.

But this is also a market with network effects. In markets with network
effects increasing market share becomes very important (and gives you
important advantages). This may be more important than revenue
maximisation in some stages of the product cycle.

Quote:> Another thing is that MS often gives hefty discounts to OEM's and large
> corporations.  If they were a monopoly in the sense that Mr. Smith is
> stating, then they would have no need or motivation to give such
> discounts.

See above. Plus monopolists routinely price discriminate to futher
increase revenues. It's no accident there are now Home and Professional
versions of Windows XP.

http://www.veryComputer.com/
http://www.veryComputer.com/

A perfectly price discriminating monopolist will not limit output of its
product below the competitive output level. But it will result in a
situation where the monopolist gets all the surplus and consumers get
none.

Quote:>> The natural price, or the price of free competition, on the contrary,
> is the
>> lowest which can be taken, not upon every occasion, indeed, but for
> any
>> considerable time together. The one is upon every occasion the highest
> which
>> can be squeezed out of the buyers, or which, it is supposed, they will
>> consent to give: the other is the lowest which the sellers can
> commonly
>> afford to take, and at the same time continue their business.

> In theory, yes.  It seldom works that way, even in very competitive
> markets.

Actually Erik this is a very good description of how it works in 'very
competitive markets'.

Quote:> Often a company will only meet the price of their competitor, rather
> than go below it (even when they could do so and still make a profit).
> There usually needs to be some stimulus (such as less demand than you
> have supply for) that forces it.

As the number of competitors increases maintaining such implicit collusion
becomes more and more difficult. And the incentive to deviate is large.

Imagine this. 10 sellers each with 10% of the market selling at $1. If one
seller deviates and sells at $0.95 it could capture the entire market. So
if one seller deviates all have to drop their price to $0.95. How do you
keep 10 sellers in line? 20? 30? It's each sellers costs of production
(including an adequate return) that stabilises the price.

What you are describing are markets that are not very competitive.

Quote:>> The exclusive privileges of corporations, statutes of apprenticeship,
> and
>> all those laws which restrain, in particular employments, the
> competition to
>> a smaller number than might otherwise go into them, have the same
> tendency,
>> though in a less degree. They are a sort of enlarged monopolies, and
> may
>> frequently, for ages together, and in whole classes of employments,
> keep up
>> the market price of particular commodities above the natural price,
> and
>> maintain both the wages of the labour and the profits of the stock
> employed
>> about them somewhat above their natural rate.

>> Such enhancements of the market price may last as long as the
> regulations of
>> police which give occasion to them."

> This also doesn't take into account legal monopolies of today, such as
> public utilities.  These monopolies usually have state regulations in
> place to regulate prices.

>> This was written 270 years ago, and are still valid now. The Police
>> mentioned above are the DOJ.

> No, not really.  The "police" he's talking about are the regulating
> bodies which grant the monopoly.

Let's not forget exclusive privileges may not be needed to sustain a
monopoly. Network effects can do that. Like if I get extra benefits from
using Microsoft Office because _you_ use Microsoft Office. The more people
that use Microsoft Office the greater my benefits are. As market share
increases that business becomes increasingly capable of extinguishing any
rival. And you can do that legally though the network effects. But you
first need to have a monopoly. Not use a pre-existing monopoly in one area
to create another one.

We know how the story goes. Microsoft didn't have a monopoly in the
browser market. But it did have an effective one on the desktop with over
90%(?) market share. Netscape had very large market share and network
effects to leverage in a browser client. Very strong evidence is available
that Microsoft knew it couldn't beat Netscape by just competing in the
browser market. So it tied the browser to its desktop monopoly. It's all a
part of public record and the findings of fact.

The greatest network effect in human history is probably the Internet. The
Internet is only of benefit to me because you are all on it :-)

Regards,
Adam

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Joe the Arom » Wed, 12 Dec 2001 12:58:04



> 1. It was a rant.
> 2. What joke? the fact that people actually get taught about things outside
> their own country, is that such a crime?

Us in the US are at a disadvantage when discussing New Zealand... it's such an
insignificant player on the world scene that nobody really cares here.

I hear it's a beautiful country though.

Quote:> Matthew Gardiner
> --
> Windows, for those too scared to use their brain

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Matthew Gardine » Wed, 12 Dec 2001 13:43:44





> > 1. It was a rant.
> > 2. What joke? the fact that people actually get taught about things
outside
> > their own country, is that such a crime?

> Us in the US are at a disadvantage when discussing New Zealand... it's
such an
> insignificant player on the world scene that nobody really cares here.

> I hear it's a beautiful country though.

I don't expect people to learn about a piddlie little country like New
Zealand, however, I would expect people to know basic history, who James I
was? what happened to Charles I when overthrown by Oliver Cromwell and the
gentry? Who was Bismark? why lead the Russian revolution? who was Ho Chi
Minh? Why did the US REALLY go into Vietnam? these are basic historic facts
that most people should have learn whilst at College, ages 13-18.

Matthew Gardiner

--
Windows, for those too scared to use their brain

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Joe the Arom » Thu, 13 Dec 2001 02:29:59



> On Tue, 11 Dec 2001 03:58:04 GMT, in comp.os.linux.advocacy,


> >> 1. It was a rant.
> >> 2. What joke? the fact that people actually get taught about things outside
> >> their own country, is that such a crime?

> >Us in the US are at a disadvantage when discussing New Zealand... it's such an
> >insignificant player on the world scene that nobody really cares here.

> In other words, Americans are ignorant and uneducated.

Well, what do you know about New Zealand??
 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Joe the Arom » Thu, 13 Dec 2001 02:39:16



> What do you expect? The US can't stand competition. They only proclaim the
> greatnesses of a free market when it suits them.

Which 99% of the time it does.
 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by Joe the Arom » Thu, 13 Dec 2001 02:41:21



> It doesn't take much to get the world off your back, does it?

Hey leave Gardiner alone, I don't think he gets out much:

http://groups.google.com/groups?hl=en&selm=3C084BC9.1BC69B6C%40yahoo....

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by chris » Thu, 13 Dec 2001 03:21:01



>Also, this rubbish about the US being a freemarket is nothing more than
>nationalist rubbish. The US doesn't even hit the top 5 most libertarian
>economies.

>1. Hong Kong
>2. Singapore
>3. New Zealand

LOL!  What an idiot.   I love the irony of nationalist, judgemental
a-holes complaining about OTHER people being nationalistic.

P.S., clueless idiot.  TINY LITTLE THINGS liek HK, Singapore, and New
Zealand MUST open their market up wide because they can't produce
everything domestically!  Sheesh!

 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by chris » Thu, 13 Dec 2001 03:22:44



>> Hmmm, your intent is vague, but I could make a joke about the NZ
>> educational system here  :-)

>1. It was a rant.
>2. What joke? the fact that people actually get taught about things outside
>their own country, is that such a crime?

Here's another clue for you, you ignorant, nationalistic moron.  You
have nothing else to learn about.  Nothing has ever happened inside
your country.  Sheesh!
 
 
 

Soap Box Speech: Monopoly and protectism, regards to the Microsoft settlement.

Post by chris » Thu, 13 Dec 2001 03:24:19



>I don't expect people to learn about a piddlie little country like New
>Zealand, however, I would expect people to know basic history, who James I
>was? what happened to Charles I when overthrown by Oliver Cromwell and the
>gentry?

Who the hell cares?  If you want to learn it, learn it, you moronic,
crooked-finger-pointing fool.  Judge not, lest ye be judged!
 
 
 

1. Why the Microsoft antitrust settlement is meaningless

I was listening to the Ashcroft talk about the
Microsoft settlement agreement and I can't find
any changes that will address the monopoly issue.
Developers of competing products already can get
access to source code by buying a license, and
developers also have access to API's.

This idea that Microsoft will share source code
with some enforcement committee is completely
ludicrous.  Every software developer knows that
it's trivial to fork off the source code base and
give ridiculously outdated versions to the
enforcement committee.

The real issue is the lead time that Microsoft
enjoys because it knows about all the changes in
the API's before any of their competitors do.  I
don't see any way of breaking this advantage
unless the enforcement committee can search every
hard drive owned by Microsoft.  Obviously, this is
simply not possible.

The real solution is to break Microsoft's ability
to strong arm PC OEMs into installing Microsoft's
operating system altogether and to put that decision
directly into the hands of the consumer.

The way to do this is simply require that all PCs
be shipped with no operating system.

PC OEMs would ship a variety of CDs with various
operating systems already on them.  The consumer
then decides which OS to install, plugs the CD
in, and boots the computer up.

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2. Problem with authorized_keys and ssh login

3. New idea for Microsoft antitrust settlement

4. So is there any way to do X through IP Masq?

5. Open Letter to DOJ re Microsoft Settlement

6. Stampede, FreeBSD, BeOS

7. Microsoft's settlement offer : publish ALL OR NOTHING AT ALL

8. Can someone tell me if a TN5250 emulation for Linux exists?

9. Protest DOJ/Microsoft Settlement

10. Surprise Settlement Evenly Splits Microsoft!!

11. Last Chance to comment on Microsoft Settlement

12. Email the Microsoft Settlement Judge TODAY!

13. 5-year time limit on Windows in Microsoft's "computers for schools" settlement