Persecution of Microsoft is Immoral

by | Nov 13, 2003

The government’s persecution of Microsoft continues unabated. The U.S. appeals court is now considering whether the Bush administration and 19 states negotiated an adequate settlement in their antitrust case against Microsoft. It’s time for the American public to stand up and defend–morally defend–the right of this company to its success and profits. Imagine a company […]

The government’s persecution of Microsoft continues unabated. The U.S. appeals court is now considering whether the Bush administration and 19 states negotiated an adequate settlement in their antitrust case against Microsoft.

It’s time for the American public to stand up and defend–morally defend–the right of this company to its success and profits.

Imagine a company that continually generates exceptional products. Suppose it makes such products available in ever-improved versions, at ever-lower prices. Suppose that the superiority of its products is so widely recognized that they are used in almost every industry, thereby raising productivity and living standards across the globe.

If you’re a typical success-loving American, you would regard it as self-evident that this company ought to be applauded.

But now imagine that this firm is denounced as an evil “exploiter.” Perhaps its out- classed competitors complain to antitrust bureaucrats, who seek to harness this company. The firm’s ability to gain market share by creating the best products is condemned as “predatory.” It is ordered to allow its competition to catch up. The firm is ordered to sign an oxymoronic “consent decree,” which is deliberately made vague enough so that if the firm shows new signs of racing ahead, the bureaucrats can keep prosecuting it until it is fully reined in. The firm is compelled to provide others with precisely those proprietary ingredients that make its products so superior.

Now, stop imagining. This is what has been happening to Microsoft, whose trailblazing Windows is the operating system for most personal computers today.

According to the antitrusters, Microsoft should not set the conditions of sale for its own product. It should rather be compelled to make its innovations available on whatever terms and prices the government sets–on whatever terms benefit those who did not, and could not, match Microsoft’s achievement.

Many people ask: If Microsoft’s products are so demonstrably good, why has the company been under assault? The answer is: precisely because its products are good. Does Microsoft have a unique advantage, for example, by being able to package its browser with Windows? Of course. It has earned that advantage, because it, and no one else, developed Windows into a leading product. If its competitors want the same benefit, let them make a product equal to Windows. If buyers do not like the terms set by Microsoft, they are completely free to patronize Microsoft’s competitors. What they should not be free to do is to have Microsoft while eating it too.

All the prattle about “anti-competitive practices” means only one thing: Microsoft is too competent. Antitrust law is a tool to enforce the claims of any second-rater against any innovator. If you invent something so good that the market clamors for it and makes you wealthy, you are deemed a “monopolist,” because your competitors are “shut out” of this market–the market you have created.

Microsoft is only the latest in a long line of victims of the unjust antitrust laws. From ALCOA in the 1950s to IBM in the 1970s to Wal-Mart in the 1980s, the government’s goal has always been the same: prosecute an exceptional firm that is growing rich not through theft or fraud, but through superior production and voluntary trade.

Microsoft should be cheered for having taken an unusually firm stand against the Justice Department. But company officials focused on the wrong issue. Their basic argument should not have been that the public benefits from the unfettered freedom of the best producers like Microsoft. This argument is true, but is not fundamental–and the antitrusters know it.

Microsoft needed–and still needs–to make the moral case for economic freedom. It needs to uphold the moral right to reap the rewards of one’s achievements–the moral right to soar as high as one’s talents take one–the moral right to succeed and not be shackled to others’ non-success. The principle to defend is that ability should be a source of reward, not a cause of punishment–a principle upon which America was built, and a principle of which antitrust law is an obscene mockery.

This is the position that will free Microsoft–and all other producers–from the envious clutches of the success-haters.

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Dr. Salsman is president of InterMarket Forecasting, Inc., an assistant professor of political economy at Duke University and a senior fellow at the American Institute for Economic Research. Previously he was an economist at Wainwright Economics, Inc. and a banker at the Bank of New York and Citibank. Dr. Salsman has authored three books: Breaking the Banks: Central Banking Problems and Free Banking Solutions (AIER, 1990), Gold and Liberty (AIER, 1995), and The Political Economy of Public Debt: Three Centuries of Theory and Evidence (Edward Elgar Publishing, 2017). In 2021 his fourth book – Where Have all the Capitalist Gone? – will be published by the American Institute for Economic Research. He is also author of a dozen chapters and scores of articles. His work has appeared in the Georgetown Journal of Law and Public Policy, Reason Papers, the Wall Street Journal, the New York Times, Forbes, the Economist, the Financial Post, the Intellectual Activist, and The Objective Standard. Dr. Salsman earned his B.A. in economics from Bowdoin College (1981), his M.A. in economics from New York University (1988), and his Ph.D. in political economy from Duke University (2012). His personal website is richardsalsman.com.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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