June 10, 1998

Microsoft and Monopolistic Practice

“In a relatively confidential manner, lucid texts are beginning to appear, anonymously, or signed by unknown authors—a tactic helped by everyone’s concentration on the clowns of the spectacle, which in turn makes unknowns justly seem the most admirable—texts not only on subjects never touched on in the spectacle but also containing arguments whose force is made more striking by a calculable originality deriving from the fact that however evident, they are never used.”
Guy Debord, Comments on the Society of the Spectacle
para. XXVII, 1988

Internet-hype freaks and technoutopians who believe that the blue glow of the screen will somehow mediate society into the intersubjective space of universal interaction with dim and undefined potential for democracy via the World Wide Web, seem to have taken a vow of silence, or at least undertaken a campaign of fingerpointing obfuscation, as regards one set of recurrent phenomena: Microsoft’s troubles with the US Department of Justice. Why have none stated the obvious?

As should be plain to all thinking people, Microsoft is the prototype of information-age monopoly, late-capitalistic hegemony, the abstract and invisible postmodern trust. This is not your great-grandfather’s trade association. It is disproportionately wealthy and powerful in a way the industrial titans of old could not even dream. Microsoft is an extraordinary example of how a company can succeed in the marketplace, pull itself up by its own bootstraps, so to speak. Microsoft has risen from nothing to dominate an aspect of the information industry, and therefore a major segment of industry in general, in only 23 years.

But so what? There is nothing out of the ordinary, nothing uniquely disturbing, about Microsoft when it is compared to the other massive makers of high-tech paper fortunes, except perhaps for the profits forcibly to be shared among those other members of the hardware/software cartel.

While one could not ask for a better organization than Microsoft to represent the power of internationally mobile capital to produce and sell intangible bits so successfully as to monopolize a particular area of software production, locking all minimegacorporations out of competition (as if it were possible now to compete with Microsoft, as its operating system controls 90% of the personal computers in the world; if it cannot leverage one potential revenue stream it certainly must be allowed to leverage another! Or must it? Will it be broken up like AT&T, only slowly, like the liquid-metal man in T2 and the divisions of the dismembered AT&T itself, to ooze back together again in a murderously synergistic orgy of upward spiraling profits?), protests against capitalism’s very own systemic workings-out, under cover of blaming one particularly nasty scapegoat, are inevitable.

But Microsoft cannot be consistently held to be evil for doing what every other corporation does: tie-ins. You can see these every night on network television. All commercials are tie-ins. To package Internet Explorer with every Windows OS: “Is that so wrong?”

The anti-Microsoft cartel’s rhetoric of greater competition is clearly fraught with contradictions. Our demystification of both the “progressive” (liberal) and the “competitive” (conservative) antitrust foolishness in this case must begin with the question of how this universal practice is perceived to have leapt into a different realm, that of monopolistic evil, as opposed to the usual monopolistic good toward which all dutiful fiduciaries strive. How did the quantity of software sold morph into a question of the quality of ethics of sale?

Let us suppose for argument’s sake that competition is not the motive. Profit presents itself as the most viable alternative. It explains so much more: The guild is up in arms about the fact that Microsoft’s success in the marketplace to date virtually guarantees its continued success, and continued accumulation. Path dependency—the rut which destroyed Beta, which threatens Apple yearly, i.e., business-as-usual—equals profits. The principle is the same as that of inherited wealth and its corresponding legacy admissions to Ivy League universities. Merit becomes Money makes Money. This explicit statement of the truth of the system is too much for aspiring monopolists to bear, and their very own principle strikes them as repulsive, their alienated essence reflected darkly in Windows.
Here at the war-ravaged border of corporate fiefdoms in competition, the only rule is to keep the other lords from becoming monarchs. The principle is the same as that of The Godfather’s Mafia, Larry Ellison and Jim Barksdale standing in for Don Altobello and Sollozo the knife-wielding Turk.

At the bottom of the capitalist process lies general collusion, a ban on individual corporate outstripping. This is the eminently scaleable class conflict at the base anyway. When powered up exponentially in scale and turned back upon management by management, the class conflict (now intraclass) still requires the extracorporate methods of competition (thus corporate sit-ins, strikes, and sabotage, techniques borrowed from labor in interclass conflict), just as effective general collusion in Puzo’s masterpiece—to introduce new product lines, to expand into new markets—required multiple secret alliances against that corporate body’s stronger individuals.

In other words, it is not only that Microsoft is able to relieve itself of the strenuous uncertainty of normal corporate competition upon the strength of its prior successes, but also that the competitor’s guild must leave the realm of competition to step into that of Big Bad Government. As Weber might have noted, at the end of each iteration of the cycle of accumulation, near the apex of elite wealth accumulation, competition, i.e., consolidation, takes place only by means of the State monopoly on force. Fascism, here we are.

Is it clear that the principle of free corporate competition is a sham? that this group of anti-Microsoft elites is guilty of what their Randian free-market sloganeers often denigrate as the bad collectivist Big Labor mentality, which must turn against its own rhetoric out of powerlust and envy? that consumer interest is the furthest thing from the cartel’s collective mind?

The impulse for each individual corporation to succeed on its own in the marketplace, to monopolize, will then be expressed, in a Freudian primal-horde sense, in mergers and acquisitions, which allow each individual corporation to experience the illicit power of monopoly without offending its collectivist-moralist sensibilities. Corporations are not individuals. Expect OracleScape and LotusApple soon. Actually, Microsoft already has a large-though-subcontrolling interest in Apple: Charity is not dead.

June 10, 1998

Supplementary Note
Of course, Microsoft’s rise to power was “subsidized” by noncompetition enforced by the State: recall the GUI lawsuit Apple lost, or any of the myriad failed attempts, before the Internet congealed as a platform unto itself, of “small” companies to enlist the State against Microsoft. In the first stage of the development of the new electronic-management techniques, conflicts were bound to be numerous—as numerous as those microborderwars on the nineteenth-century American frontier. The universal diffusion of the new techniques required something else: rigid platforms and strict operating parameters, in order to be effectively exploited by the bourgeois class. After the first stage was set, after 90% of all computers can communicate with one another easily because of their identical operating systems, and after this universality has allowed the discovery of the intensive exploitation of an entirely new field, the 60s-vintage Arpanet—only after these things does Microsoft’s prior dominance come to threaten the exploitation of the new field: the individual PC’s OS doesn’t matter as much anymore. Prior accumulation, the bane of the bourgeois, rears it’s ugly head: Microsoft is able to shoehorn it’s way into providing precisely 90% of all computers with its specific version of Internet software, with its particular set of products to advertise, which in principle could be provided by any enterprise. Now this is unfair, because it is not required by the entire bourgeois class, i.e., it limits the potential revenues, and we all know that every enterprise needs as many new sales as possible, and the Internet, transformed before our eyes into a big impulse-shopping bin, can help delay the day of reckoning.

June 7, 2000

Postsupplementary Note

William H. Gates, the chairman of Microsoft, has no doubts about who is responsible for his company’s antitrust woes. During a news conference last Wednesday, hours after a federal judge ordered that Microsoft be split in two, Mr. Gates spoke pointedly of the “competitors that have been behind this lawsuit.”

....

At the trial, a procession of competitors—representing Netscape, Sun Microsystems, America Online and others—testified against Microsoft. And in the months and weeks before the government presented its proposal in April to break up Microsoft, industry executives—some rivals of Microsoft and some not—were shown or read individual sentences and paragraphs in drafts of the remedies plan by government lawyers, who then asked if the provisions seemed sensible.

Steve Lohr, “U.S. Pursuit of Microsoft: Rare Synergy With Company’s Rivals,” New York Times, p. C1 (Business Day), Monday June 12, 2000.

June 12, 2000

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