Copyright, 1998, Max K. Goff, all rights reserved
The acceleration of technological proliferation is leading to many rapid changes in the last decade of the 20th century, impacting society in almost every respect. Economically, politically, and socially, the advent of the Information Age brings with it challenges to both individuals and institutions, as well as fundamental changes to the relationships between individuals and institutions.The nature of technology is to optimize. As such, costs go down even as data communications bandwidths go up. This ensures that once technology saturates a given process, optimal results are soon realized. And less-than-optimal alternative processes are soon discarded.
The nature of markets is to optimize as well, with "price" still reflecting the intersection of supply and demand -- only now the most valuable things are free. Now technologically boosted suppliers can harness the ultimate in niche marketing: one-on-one. The customer and the producer can have a direct link via internet technologies. Consider the set of processes employed in the delivery of, for example, a computer purchased from Dell:
production: Dell order/production/design processes are all tied to internet-optimized solutions, lowering costs dramatically. marketing/sales: Dell processes orders online via the internet. Once a customer submits a valid order, the build assembly-to-order processes begin, all controlled via internet technologies. Every order processed via the internet saves $7+ versus an order taken over the phone. delivery/support process: FedEx has lowered costs via information technologies as well, and has integrated with Dell's technologies such as to provide a seamless interface to the customer, until the system is delivered to the customer's front door.
The net result is a much lower cost system and much more satisfying purchase process for the customer. For Dell, it means optimizing processes to utilize information technology to its fullest, and thus guarantee a highly competitive and profitable business.In the competitive landscape, Dell is highly regard in a field of other worthy competitors. Many come to mind: Compaq, Hewlett-Packard, IBM, Micron, Gateway -- there are many players. The field is highly competitive, and yet there are many names, each presenting viable options, each utilizing information technology to benefit their business, i.e.: to remain competitive.
It is important to note that the net result for the customer -- the user of these products -- is lower costs for more beneficial (faster, more memory) systems with each successive generation.
For the purpose of discussion, let us call the field of players in the business of producing PC hardware the "cast." The cast of players in that particular business. There are literally hundreds of viable businesses in the world producing PC hardware for end use. Some produce specialty hardware, some very cheap, some marginally useful. But there are hundreds nonetheless. However, the largest percentage of sales belong to a relatively small cast of players -- less than a dozen.
The software that drives the cast's systems -- the operating system hardware -- comes almost entirely from a single supplier. The fact that Microsoft has emerged as the monopoly player in the "PC space" provides an interesting contrast to the cast of players providing the hardware. On the hardware side, costs are optimally low (as a cast), providing optimally low and still decreasing prices for PC hardware.
But the dominance of Microsoft operating system software has given Microsoft the ability to literally set prices as will, all the time claiming to have the best interests of customers at heart.
If it were simply a function of price, leaving the Microsoft fold would be relatively easy for users. But the dominance of Microsoft in a few basic applications (word processor, spread sheet, presentation tool), and integration of portions of those products into the operating system itself, all in the name of the best interests of the customers, have given the company a dominance in both strategic market presence as well as raw capital as to continue to spread their monopoly unchecked. The Department of Justice is calling Microsoft on exercising monopoly power in order to extend their monopoly further by integrating their web browser into the operating system, again, in the name of the end user. But such tactics are clearly coercive to end users, and thus diminish freedom.
A correlation between Microsoft dominance and coercion can be gleaned from the writing of Max Weber, a predominant sociologist. In the late 1970s, Weber writing on "Market Relations, Freedom and Coercion", said:
"The development of legally regulated relationships toward contractual association and of the law itself toward freedom of contract, especially toward a system of free disposition within stipulated forms of transaction, is usually regarded as signifying a decrease of constraint and an increase of individual freedom...however, the extent to which this trend has brought about an actual increase of the individual's freedom to shape the conditions of his own life...cannot be determined simply by studying the development of formal legal institutions. ... The formal right of a worker to enter into any contract whatsoever with any employer whatsoever does not in practice represent for the employment seeker even the slightest freedom in the determination of his own conditions of work, and does not guarantee him any influence on this process. It rather means, at least primarily, that the more powerful party in the market, i.e., normally the employer, has the possibility to set the terms, to offer the job "take it or leave it," given the normally more pressing economic need of the worker, to impose his terms upon him. The result of contractual freedom, then, is in the fist place the opening of the opportunity to use, by the clever utilization of property ownership in the market, these resources without legal restraints as a means for the achievement of power over others."The perspective of Weber's employment seeker is not unlike that of the PC user in that information technology represents extensions to workers. In other words, I cannot be competitive if I don't employ information technology, as an individual. To the extent that I am dependent upon information technology as a worker, Microsoft too, with the clever utilization of ownership in the market, achieve power over others. Simply put, in the Information Age, in order to remain competitive, workers become information-technology-dependent. And any dominant player can and will achieve coercive powers over others in a free market.Even if a competing operating system were free of charge, Microsoft would still remain dominant (and thus coercive in nature) because of its dominance in other key application areas.
And continuing to operate such as to eliminate potential competitors, such as Netscape, stifle competition rather than effectively compete. And continue to coerce end users. Weber goes on to say:"The parties interested in power in the market thus are also interested in such a legal order. Their interest is served particularly by the establishment of "legal empowerment rules." This type of rules does no more than create the framework for valid agreements which, under conditions of formal freedom, are officially available to all. Actually, however, they are accessible only to the owners of property and thus in effect their very autonomy and power positions.
[...] The increasing significance of freedom of contract and, particularly, of enabling laws which leave everything to "free" agreement, implies a relative reduction of that kind of coercion which results from the threat of mandatory and prohibitory norms. Formally it represents, of course, a decrease of coercion. But it is also obvious how advantageous this state of affair is to those who are economically in the position to make use of the empowerments. The exact extent to which the total amount of "freedom" within a given legal community is actually increased depends entirely upon the concrete economic order and especially upon the property distribution. In no case can it be simply deduced from the content of the law.
Basically, Weber is saying that even if laws are made to protect workers, coercion will still exist due to the disparity of capital distribution -- them that's got shall get. The corollary with Microsoft is clear. Even if the Department of Justice is successful in stopping Microsoft from bundling its internet browser software with its operating system, the fact remains that Microsoft is still enjoying increasing market share in other strategic niche markets, like departmental servers and web servers. As such, they will be able to continue exercising a defacto coercion on anyone competitively dependent upon information technology.According to Weber:
"Enabling laws of the sort discussed here would certainly play a slight role in a "socialist" community [and] ... will also be different from what they are in a private economy. In the latter, coercion is exercise to a considerable extent by the private owner of the means of production and acquisition, to whom the law guarantees their property and whose power can thus manifest itself in the competitive struggle of the market. In this type of coercion the statement "coactus voluit" ["he wishes it, coerced"] applies with peculiar force just because of the careful avoidance of the use of authoritarian forms. In the labor market, it is left to the "free" discretion of the parties to accept the conditions imposed by those who are economically stronger by virtue of the legal guaranty of their property."The same is true of Microsoft and end users. As long as Microsoft can make the argument that alternatives exist, which they do, they can continue to coerce via the legal guarantee of their property rights. Or in their case, their intellectual property rights, guaranteed through software licensing agreements with the hardware cast of players and ultimately through end users.Weber goes on to say:
"Formally, the market community does not recognize direct coercion on the basis of personal authority. It produces in its stead a special kind of coercive situation which, as a general principle, applies without any discrimination to workers, enterprisers, producers and consumers, viz., in the impersonal form of the inevitability of adaptation to the purely economics "laws" of the market. The sanctions consist in the loss or decrease of economic power and, under certain conditions, in the very loss of one's economic existence. The private enterprise system transforms into objects of "labor market transactions" even those personal and authoritarian-hierarchical relations which actually exist in the capitalistic enterprise. While the authoritarian relationships are thus drained of all normal sentimental content, authoritarian constraint not only continues, but, at least under certain circumstances, even increases. The more comprehensive the realm of structures whose existence depends in a specific way on "discipline": that of capitalist commercial establishments, the more relentlessly can authoritarian restrain be exercised within them, and the small will be the circle of those in whose hands the power to use this type of constraint is concentrated and who also hold the power to have such authority guaranteed to them by the legal order. A legal order which contains ever so few mandatory and prohibitory norms and so many "freedoms" and "empowerments" can nonetheless in its practical effects facilitate a quantitative and qualitative increase not only in coercion in general but quite specifically of authoritarian coercion.
And this is exactly what has happened. The legal order has effectively facilitated quantitative and qualitative increases in authoritarian coercion of information-technology-dependent workers in the Information Age. Microsoft has achieved monopoly status and is thus the most coercive power to date in the Information Age. This is where the "Mythology of Microsoft" bears examination.Throughout the recent encounter with the department of justice, indeed, from their very beginning, Microsoft has operated via two fundamental principles, which are behind almost all of their advertising and strategies:
Implied by their business strategies is another principle, which they do not articulate, but which is nevertheless quite clear and perhaps subconsiously more relovant:We do what is best for our customers (end users) No one can tell us how to innovate ("innovation" is sacred) These three principles comprise what I call the "Mythology of Microsoft." They are the three big lies, without which, they have no viable story.We will be the only supplier Consider the first myth. "We do what is best for our customers." This is the big lie that gives Microsoft license to coerce. In the name of the second myth, "innovation," Microsoft has continued to use their rich capital base to buy dominance in a particular market niche, and then integrate that functionality into the operating system. The fact that a bloated operating system is less stable (and hence less useful to users) is blurred by the myth. Innovation in technology has never been a Microsoft strength. Market dominance through competitive genocide is a better description of their innovative techniques.
But it is the last, unstated myth that is perhaps the most coercive from a sociological perspective. Despite what the Justice Department does, despite the growth of free operating systems for computer users, Microsoft will continue to grow and dominate, because they have convinced most users that they will inevitably win. Their success is legendary. And it is the implicit guarantee, "coactus voluit," that will allow Microsoft continue to dominate...or so Microsoft would have us believe.
Enter Java. The preliminary injunction against Microsoft gives renewed hope in the promise of "Write once, run anywhere." If a truly compatible, truly high performing Java Virtual Machine (JVM) were available on every Microsoft system, the vast majority of application developers would quickly migrate any heretofore proprietary efforts to Java development. The Java story is too compelling to the developer otherwise.
But will Windows ever host a truly compatible JVM? Despite the best efforts of the courts, it remains to be seen how Microsoft's words will translate into actions. But it may not matter.
The focus on Microsoft as the dominant player on the desktop is very much like the focus on rail road monopolies even as automotive transportation was building fundamental infrastructure. The old monopolistic paradigm was outdated anyway. Roads would soon provide competitive alternatives such as to make Rail roads less important; needed, but no longer completely dominant in shipping cross country. The same is true of Microsoft.
Even as systems get smaller, the deployment of systems is getting more diverse. Sales of embedded systems are enjoying higher growth rates than any other kind of processor. So it's not the desktop that should be of concern when it comes to the future of software. It's the systems we will wear. And these smaller systems, systems that monitor and report our health, our position, our agenda, our appointments and our calendars, sytems that will interact wirelessly with servers connected to a wildly larger and faster internet, that will be deployed routinely worldwide. Windows on my wrist watch? Only Java has a credible story from smart card to super computer. So the coercive power of the monopoly, just as with the railroads, will not be thwarted by laws or legal attempts to ensure freedom. But rather by technology and the advances of technology in the marketplace.
Max Weber, Economy and Society: An Outline of Interpretive Sociology. Guenther Roth & Claus Wittich eds. (Berkeley: University of California Press, 1978), "Economy and Law" (The Sociology of Law), ch. VIII, section 7, pp. 729-731.
