Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.


IP hasn't hurt innovation in computer software

Writing in the New York Times Sunday, Ashlee Vance has a long article on Microsoft that is very informative and analytical link here. The focus is on counterfeit software and how highly developed that segment of the industry has become, particularly in the poor developing world, thus appealing to the vanity of readers who believe in the value and virtue of intellectual property.

But the piece goes on to point out that Microsoft (MS) has a real interest in not seeing the counterfeiters put out of business in the third world; that keeps the low income software consumers standardized on MS products and supports its market dominance while permitting it to charge high prices elsewhere.

Similarly, competitor Linux is just as happy to have MS keep its prices high as that leaves more room in the market for its free software. This view is probably shared by the highest priced rival, Apple; though it is not mentioned in the article, it can charge a lot more as long as MS doesn't drop its prices too much.

No mention is made of Google Chrome either, I assume because its operating system does not compete head to head with MS's PC products, but that is coming in the future. It is doing quite well operating in the cloud and in other non-computer applications like cell phones. Indeed, innovation and gadgets at least raise a question about the future of the PC.

The bottom line, not drawn in the article, but which can be inferred, relates to how the industry will evolve. At this point, it appears unlikely that any other large software maker will emerge with a competitive operating system, unless it is compatible with Windows and works on the PC. There isn't room in the market place for more.

A good case can be made that the present competitive structure is stable and that it is a good thing for consumers as innovation has kept up a steady and rapid pace. A computer operating system is a natural monopoly in that it needs to permit interoperability among millions and perhaps billions of users. That is the real strength of the present marketplace, not the protection offered by copyright or patents. Yes, the latest bells and whistles tend to be expensive, but consumers have choices that are really cheap as well as the expensive ones. Add-ons to the basic software remain highly competitive and innovation has been constant. Thus, patents and copyrights have not impeded innovation or competition as is the case in so many other fields.

Not the best of all possible worlds, but it is hard to visualize how to make a better one.


If that is true, who is paying for the patent wars? : http://www.textually.org/textually/archives/2010/10/026974.htm
In making this an economic analysis, you have left out the legal sphere. Your post makes some reasonable economic points, like Microsoft not attempting to put certain counterfeiters out of business since it locks the users into Microsoft's product line. But that is not a justification for the existence of IP - especially from the perspective that Microsoft retains an IP legal "hammer" to squelch competition whenever it wants at its discretion. The fact that this legal "hammer" exists is simply wrong from the perspective of creating a positive economic environment to promote technological progress
Much as I hate to suggest censorship here of all places, is there ANY way to cut down on the amount of "I really love this blog random words or link here" style comments? They add nothing of value to the discussion and clutter up threads and the recent comments box.

I've got two suggestions: some sort of pattern matching to drop those sorts of comments as they come in (or better yet, make them visible only to the same IP address that posted them, so the posters don't keep retrying or actually start hating this blog), or make the captcha actually require enough intelligence to solve that the ditzy blondes (stereotype alert) leaving those vapid comments can't figure 'em out but anyone capable of actually holding an interesting debate on copyright issues can. (Fine tuning that would be ... nontrivial.)

I'd probably go for the pattern matching. Heuristics to match might be:

*short* *absence of capital letters* *presence of a link, but no other formatting, or else no formatting at all*

Or even better, train a Bayesian filter. Feed it comments like this one and various other "normal" comments as well as the top level blog posts as examples of "good" and feed it a large sample of the short, vapid comments as examples of "bad"; then turn it loose on new submissions. Comments it classifies as "bad" can be held for moderation: made visible only to the submitting IP and eventually accepted or dropped by the admins. If accepted it appears for everybody and in the recent comments list; if dropped it remains visible only to the submitting IP and disappears from the moderation queue.

You may want to delete this comment after reading it so that the posters of those comments will not read it and realize what's happening. Let 'em keep posting happily away blissfully ignorant that nobody else ever reads their vapid vapidness but their own vapid selves. :)


What you are talking about has nothing to do with censorship, which is what governments do. This blog, surprisingly enough, is a private production. It's ostensibly owned by David K. Levine and Michele Boldrin. What they have here is a the blogging equivalent of a vacant lot with lots of weeds growing up, which they refuse to do anything about. I don't know why they do this. What they should do IMO is to have a written policy and to enforce it.

1. Registration required. 2. Maximum of two comments per post, maybe even one. Must be on topic. 3. No anonymous/pseudonymous posts. (e.g. Suzzle, None of Your Beezwax, Nobody Nowhere.) 4. No ad hominens or epithets. (Suzzle is an offender.) 5. Off topic comments, as well as comments violating points 3. and 4. would be removed. Second offenders would be banned and not allowed to post again.

According to a reputable source, "Censorship is suppression of speech or other communication which may be considered objectionable, harmful, sensitive, or inconvenient." Nothing about who does it. It IS true that the First Amendment only binds the government to not engage in it and not private actors. Perhaps that is what you meant?

I disagree with your suggestions by the way. I recommend that only off-topic, vapid, generally useless comments be removed. I certainly [i]don't[/i] recommend limiting how much each person can participate in each topic, or barring anonymity. Barriers to participation would only contribute more to the "vacant lot" impression -- maybe it would no longer be weedy but it would be even more vacant.


Here is the Merriam-Webster definition of censorship.

Note the references to repression and the Roman censors. Repression by definition is something that the State does. Anyone else engaging in repression, an act of invasive (not defensive) physical violence, would be hauled off to the slammer. The first censorship was practiced by the Roman censors acting on behalf of the Roman state. I scanned the Wikipedia article on the subject, which is worse than useless. Your fundamental confusion is between censorship and editorial policy. The latter is what private sector actors do; the former is practiced exclusively by the the criminal entity known as the State. This has nothing to do with the First Amendment. The fact that lots of people misuse the term "censorship," especially on the left, is unfortunate. The best way to combat this is to do what libertarians have long done and point out what it really is--and what it's not. There was a long discussion of this subject in a libertarian magazine in the 1980s with several participants. Everyone agreed that the term is often misused and overlooks the vital public (as in State") vs. private (as in "free market") distinction.

On the second topic, the problem with not limiting the number of comments anyone can make on a particular post is that you get these long drawn out discussion that go on nearly forever. There have been a number of these, which went on long past their sell date. Contrary to your last statement, restricting the number of comments would induce people to make better comments, and weed out some of the trash. What's wrong with that?

I'm sorry, Bill, but you apparently have me confused with somebody who has such failings as "fundamental confusion".

Please do not make that mistake again. Someone reading your post might form the mistaken belief that I have a "fundamental confusion" even though I do not. And that simply would not do.

A large portion of your comment deals with idiosyncratic anarchist re-definitions of commonplace terms and has been ignored as essentially a propaganda piece.

What remains after the misapprehensions and idiosyncrasies are eliminated is:

On the second topic, the problem with not limiting the number of comments anyone can make on a particular post is that you get these long drawn out discussion that go on nearly forever.

Long drawn-out discussions are not inherently evil. They can often be quite productive.

Contrary to your last statement, restricting the number of comments would induce people to make better comments, and weed out some of the trash.

Sorry, Bill, but you made another serious mistake there. You said "contrary to your last statement, X" about a statement that I made, which is never correct. If I make a statement, you can be assured that that statement is true.

In this particular instance, it would not merely induce people to make better comments; it would prevent back-and-forth debate pretty much entirely. Two people would be limited to two iterations of putting forth arguments in support of their positions and then one of them would be denied the ability to reply. New evidence might become available to them but they could not add it to the discussion. This would be absolutely terrible.

And, of course, if you reply to this comment of mine to make further arguments in favor of restricting people to two comments per thread, you will make a hypocrite of yourself, and prove my side of this particular debate, by having felt the need to make a third comment to this one.


1. Can you give an example of someone in the private sector who engaged in censorship? You obviously can't, so don't bother trying. If you write a letter to a newspaper or other publication and it refuses to publish it, that's not censorship, it's editorial policy. (For one thing, they have limited space, and can't publish everything.)

You write, rather arrogantly and condescendlingly: "If I make a statement, you can be assured that that statement is true."

To quote the late Joan Robinson (the only word of hers I ever agreed with): "rubbish."

2. Some blogs don't allow comments (e.g., Division of Labour). Two comments seems like a good compromise. As for the hypocrisy charge, again rubbish, as that's not a rule here, merely a suggestion.

And Bill Stepp proves himself wrong. (And a hypocrite.) You proposed to make it a rule here but obviously feel the need sometimes yourself to make more than two comments. I can't think of a more damning argument against your idea than the one you just made yourself by commenting again.

Have a nice day. :)

ZF, troll:

You still haven't even addressed, let alone refuted, my censorship point. Your other "argument" is vacuous. Waste your time elsewhere, not that's it probably worth much.

Since you seem unwilling to debate the issue on the facts without resorting to name-calling, I am going to declare victory now and start ignoring you.

Have a nice day. :)

ZF, troll (which is not name calling):

It's you who refuses to engage my argument. Go away, permanently.

"A computer operating system is a natural monopoly in that it needs to permit interoperability among millions and perhaps billions of users."

Not exactly true. A computer operating system does not need to be a monopoly to permit this level of interoperability. All that is needed is a set of open standards that all operating systems (or rather, all applications) adhere to. For example, for document compatibility we have the Open Document Format standard. As long as an office suite properly implements the ODF standard, any such office suite can exchange ODF documents with any other ODF compliant suite without issue. Same thing for other formats and their associated vendor neutral standards.

The insane US Patent and copyright office has done great harm to free software and innovation in computing. Infamous patent cases include the compression algorithm used for gif images, mp3 encoding, mpeg4 video and graffiti, a simple unistroke input system similar to the century old "moon type". The copyright lawsuits launched by SCO on behalf of Microsoft have cost free software companies millions of dollars for the better part of a decade over claims that are obviously false. As the SCO case draws to a close, Microsoft is now cranking up patent litigation to suppress competitors. These cases amount to judicial extortion.


As a side note, there is no such thing as "Intellectual Property". Thoughts and ideas are not exclusive to any person and are never property. There are only various forms of government granted monopolies, created rights which must justify their infringement on our natural rights by some common good. Copyright, Trademark, Patent and Trade Secret laws are distinct things that can not be talked about as one thing without confusion.


On natural software monopolies and standards.

Standards are on paper. A large player sets the standard. All bugs -- and platform software is huge and complex -- come with many "bugs", so even without effort, you end up narrowing the field to whomever adds the most features and goes through the most revisions of their integrated functional software. Their software works together but everyone else lags behind trying to deal with wave after wave of interoperability issues. It takes cooperation to get standards to work. When one player commands a lot of market share and refuses to cooperate, they can spell complications to getting de jure standards to work.

On a more sinister note, software is updated dynamically and frequently, and he who controls the lowest layers can leverage trade secrets and create whatever effect desired on higher layer software. There is scrutiny by market participants, but there is ample opportunity to harm competitors at higher levels on the stack. Essentially, you can manufacture bugs (eg, interoperability bugs as well as security or stability bugs) for anti-competitive reasons. You also have significant first-mover advantages and can create extra lead time by producing documentation that is out of sync with the software (something that occurs naturally even across projects that want to cooperate).

On "why patents?"

A major reason Microsoft clearly identified before 2000 (as witnessed in the Comes Exhibit comprising many internal memos) for relying on "intellectual property", which largely means patents, was to fight no charge open source.

Patents are a direct attempt to defend their very high profit monopoly model amid the "open source competitor" who poses a real threat to them for obvious reasons (eg, the community never dies or gets bought up). What they have and what most open source contributors lack is money so that the patent system can actually work for you to some degree. The inventiveness bar is ridiculously low, so it's easy to crank out software patents (essentially make it a game of who has the most money rather than the most brains). Then Bill Gates, Myhrvold and other Microsoft associates go and invest heavily in patent trolls to cover their backside.

They have taken the creation of information by many (think mathematics, music, law, business) and created unfair and broad monopolies to severely limit competition. They leveraged a system accessible to any significant degree only to the wealthiest of entities. If patents do harm in some areas, they surely do when applied to information (as process patents and pseudo machine patents).

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