Neuromancer

The case against Microsoft is based not just on bad economics, but on a fundamental misunderstanding of government's decision-making role when it comes to market operations. This misunderstanding has led to an attack on one of the US’s most successful firms.

It is difficult to measure consumer "harms", much less harms that may only occur in the future. A common misconception about antitrust law is that its purpose is to ensure fair competition. That's not true; antitrust law's purpose is to protect consumers. If fair competition maximizes their welfare, so be it; if monopoly maximizes their welfare that’s what the antitrust laws provide for.

It's not clear that Microsoft has a monopoly in the first place. Past Microsoft customers are not a captive market, as the Department of Justice portrays them. Rather, Microsoft must continue to add features and functionality to its products to get its Windows 95 consumers to become Windows 98 (and beyond) consumers. Consumers are free to change operating systems at any time. There are such alternatives as Linux with the graphic interface, the Mac OS but the point is that even if there were none Microsoft's ability to raise prices is strictly limited by the mere possibility of such an alte

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Joel Klein and the other attorneys at the Department of Justice cannot, practically by definition, make informed choices about how to make the various tradeoffs in the software industry. Basic economics tells us that prices convey information to firms more efficiently than any other information mechanism. Do firms get to make those decisions, informed by consumer preferences? Or does the government do so with its well-documented susceptibility to private interests? I think the answer is clear.

It is perfectly legitimate for consumers to express their preferences about the best way to make this tradeoff; indeed, they do so every day, with their money. For them to try to do so demonstrates not just hubris but ignorance.

It is difficult to measure consumer "harms", much less harms that may only occur in the future. Rather, Microsoft must continue to add features and functionality to its products to get its Windows 95 consumers to become Windows 98 (and beyond) consumers. That is because they aren't quite confident that they have kept up with consumers' preferences about how an important tradeoff is to be made. It is just a side effect of Microsoft's choosing standardization over innovation a corporate strategy they should be free to pursue.

It is perfectly legitimate for consumers to express their preferences about the best way to make this tradeoff; indeed, they do so every day, with their money.

Microsoft products are similar they represent a certain level of standardization and innovation. Consumers are free to change operating systems at any time.

It's not clear that Microsoft has a monopoly in the first place.

Approximate Word count = 1250
Approximate Pages = 5 (250 words per page double spaced)

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