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Romanticism, Capitalism, and the Internet

E. The Microsoft Problem

1 Leave a comment on paragraph 1 0 The first years of what would become known as cyberlaw mostly involved riding along with the Wired vision―the internet was a realm of potential new freedom that ought not to be sullied by old corporate and government ways―while debating the particulars with those earlier iconoclastic entrants into the open cultural space created by the internet surprise: the market purists and libertarians. However, as Microsoft readjusted itself to the emerging internet in 1995 and 1996, it no longer looked self-evident that the internet’s openness would overthrow the Microsoft empire; Microsoft, by throwing its enormous resources into its browser and leveraging its domination of operating systems, could colonize the internet just as it had come to dominate the personal computer.

2 Leave a comment on paragraph 2 0 Hating Microsoft has been a popular sport, particularly among programmers and technophiles. The railing against Microsoft does not come from exactly the same place as the more generalized railing against corporations in the United States. True, ever since they took center stage in the U.S. economy in the Progressive Era, large corporations have been criticized and attacked almost as much as they have been celebrated and emulated. And intellectual property has often been a source of power for many of them; carefully cultivated patent libraries tied to investment-guided research and development provided much of the strength of early twentieth-century corporations, such as Dow Chemical, General Electric, Westinghouse, and RCA.[40]

3 Leave a comment on paragraph 3 0 But the resentment against Microsoft is uniquely personalized. Criticisms of Microsoft rarely associate the company with corporations with similarly privileged positions in their fields (such as Intel in microprocessor manufacture or Oracle in database management systems), and the structural conditions of corporate capitalism that render bigness its own reward are not usually discussed. Instead, criticisms are typically focused on the company founder, Bill Gates, and linked to criticisms of the quality of its products and the implication that there is something peculiarly nefarious about the whole enterprise. The website Slashdot, popular among computer professionals and open source enthusiasts, labels stories about most corporations―AOL, Google, Sony, Apple, Yahoo―with corporate logos or pictures of products. The icon for Microsoft-related stories, in contrast, superimposes the headgear of the Borg―the evil, mind-controlling empire from the Startrek TV series―on top of a picture of Bill Gates. Computer scientists who go to work for Microsoft find themselves apologizing for their choice of employer in professional fora. Like a mythic demon in a tribe’s collective lore, Bill Gates has been turned into an important negative image in the symbolic economy of online culture.

4 Leave a comment on paragraph 4 0 Why this intense focus on the person of Bill Gates? Significantly, Bill Gates became the richest person in the world, not from software that he actually wrote, but basically by managing the labor of other software writers and carefully manipulating the distribution and marketing of their work. Gates did do substantial amounts of programming in the company’s early entrepreneurial years of the late 1970s and early 1980s. But the products that became the foundation of the company’s spectacular rise to dominance―MSDOS, Windows, Excel, Word―were created and maintained by others.

5 Leave a comment on paragraph 5 0 In the annals of corporate America, Microsoft’s business strategy is hardly surprising. Silicon Valley journalist Robert Cringely claims that Gates once told him that “the way to make money in the computer business is by setting de facto standards.”[41] Insofar as computing is about communication―which, as we’ve seen, has been mostly the case since about 1970―having the same system that everyone else has is its own reward. A better system that is different from everyone else’s is, in an important sense, not better. Call it network externalities, call it path dependence, or call it the fundamentally social character of human existence, there is much value in commonality, and Microsoft’s core strategy has been to exploit that fact. Become the norm and then charge for it; all other goals are secondary. MSDOS was probably not technically better than other available operating systems of the early 1980s, but Microsoft did everything they could to insure that it was everywhere. And as it spread everywhere, a cycle was established that encouraged manufacturers of hardware and software to create things that worked with Microsoft’s operating system, and as they did so they further reinforced Microsoft’s position; this self-reinforcing cycle continues to this day.

6 Leave a comment on paragraph 6 0 From a business management point of view, this is not all that troubling. The Economist calmly noted that, in spite some of his claims to the contrary, Gates is not a technological leader who sees further ahead than others or builds unique and pathbreaking products. His skill is in “making money in the slipstream of other people’s technological vision”―and this on its own is perfectly reasonable, as far as The Economist is concerned.[42]

7 Leave a comment on paragraph 7 0 Bill Gates is uniquely a problem only if you think that the acknowledgment and reward of individual effort and creativity is of overriding importance ―that is, if you are attracted to a romantic individualist point of view. From this point of view, Microsoft is incredibly galling, particularly to someone who actually does do the work of managing or making software. As Microsoft’s dominance steadily grew in the 1990s, the growing world community of programmers and other computer experts regularly experienced visceral annoyance at the success of Bill Gates; he was reaping the rewards, turning those rewards to his further advantage, but he wasn’t doing it by building a better mousetrap, and he wasn’t doing what they saw as the real work. He wasn’t creating much that was truly new or better. If the most fundamental of all rights is, as Ayn Rand put it, “to think, to work and keep the results,” there was something wrong; the people who were doing the thinking and working weren’t keeping the results. This situation was not enchanting.

  • [40] See David F. Noble, America by Design (Oxford University Press, 1979).
  • [41] “Bill Gates once told me that the way to make money in the computer business is by setting de facto standards, by which he meant proprietary standards” (Cringely, “I, Cringely . The Pulpit . Tactics Versus Strategy | PBS,”  I, Cringely, 2 Sept. 1999, www.pbs.org/cringely/pulpit/1999/pulpit_19990902_000622.html
  • [42] “The question is not whether Mr. Gates can strain to see even further―the evidence so far suggests not―but whether his skill at making money in the slipstream of other people’s technological vision will serve him as well in the next decade as it has for the past two” (“I Have a Dream,” The Economist, 25 Nov. 1995, 65).
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    Source: http://mcpress.media-commons.org/neteffect/chapter-6/e-the-microsoft-problem/