Wednesday, November 02, 2005

Free Markets

I have long said free markets and capitalism needs oversight to function properly.
 
Here's another example of what happens in a capitalist economy that contains powerful corporations: they exercise that power to squash innovation and competition.
 
 
"Microsoft had proposed that device makers that included a CD with the Windows Media Player with their devices not be allowed to include any competing software. In other words, devices that wanted to run the Windows Media Player would have to do so on an exclusive basis."
 
Seems like Microsoft is using their influence to REDUCE the number of options a consumer has. Surprise!!
 
Sure, the consumer can go and find another media player, research it to determine if it works on the player he just bought, download, install and configure it... But what if "xyz corp" (the player vendor) knows that another media player works well and wants to include it for the benefit of their customers? That's a win for everyone: xyz sells a media player and we get options on the software without the hassle...
 
Sounds like a good idea to me -- but, in this case, the government HAD TO STEP IN to ensure we get those options. The "free market" would have reduced our options. Or, at the very least, made it harder to evaluate one software package with another...

Folks - the natural outcome of competition is a group of very powerful corporate winners. The problem begins when these guys start using that muscle to stifle competition in very uncapitalistic ways. Without regulation, this will ALWAYS happen.

4 comments:

Stalin the Shark said...

Oh Dear Lord, heresy!

The free market works very well as long as there are ground rules to protect all parties involved, including the consumer. In areas where these basic rules have been rescinded - air traffic, healthcare, energy - we're seeing problems.

The true genius of the New Deal was the creation of institutions like the SEC, FDIC, and so on, that allowed capitalism to work for everyone. These days, when profit is the only variable that enters into the public discussion, we're seeing the social fabric fraying at the same time as companies stifle innovation and, in consequence, grow fat and lazy.

:-), StS

Reign of Reason said...

You nailed it StS...

The problem is with these neocons: they have faith in free markets akin to their religious faith: it's absolute and is requires to be pure.

I think they've sold this story well -- and it's gonna take a while to undo the damage.

Intellectual Insurgent said...

Doesn't Apple do the same thing? Having iTunes as my music software prevents me from getting music from other services. I am a fan of the free market and the way these big dogs are competing, everyone has to pick a camp and stick with it. No worries though. There will be another kid like the one who invented Linux who invents a system that everyone can use.

Stalin the Shark said...

Apple is exactly the example I would use to illustrate Rick's central point: it's by far the superior operating system (I'm writing this on an iMac, OS X), stable, easy to use, and fun to work with. The only reason people don't go in droves to Macs is Microsoft's quasi-monopoly.

I've never had a problem importing music into iTunes, though. Granted, they tie in with their own store, which is good business sense, but the software plays music from other providers as well.

:-), StS