Wednesday, June 27, 2012

Having fought the last war

What will the Eurocrats do for an encore;
A European court on Wednesday upheld most of a massive fine levied against Microsoft by the European Commission's competition watchdog, closing a case against the software giant that began in 1998.
Ah, 1998...we remember it well.  Microsoft was an impregnable monopoly, immune to competition.  All progress would grind to a halt unless politicians protected us from Internet Explorer.

Tom Hazlett remembers too;

There is no guarantee that this enhanced vertical integration will improve products, or that Apple's rival platform will continue to print money. All business structures are a mix; there are no pure strategies. "Closed" Apple relies on thousands of suppliers; iTunes sells the artistic works of a diverse marketplace. The App Store thrives on software written by developers who couldn't find Cupertino even if they logged onto Google Maps or Apple 3-D.
The magic is not in a particular model but in the dynamics of platform competition. Shouting out "open" or "closed" as a prescription for categorical success is at best a mirage and at worst a predicate for anticonsumer public policy, like the government's long antitrust crusade against Microsoft.
The late Joseph A. Schumpeter put it well: Capitalism "never can be stationary. . . . The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates."
That relentless innovation process delivers the goods.

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