The Goose With the Golden Egg Is Being Led to Slaughter

After months of mobilizing, the government and 20 states have charged Microsoft with antitrust violations. In the near distance, moving up to the sound of the guns, are the legions of the Trial Lawyers of America, hoping to increase their tobacco loot by collecting treble damages from Microsoft for any loss incurred by any software startup over the past 10 years.

The fog of war already is obscuring the battlefield, only here it is made of over-simplifications and bad metaphors instead of cannon smoke. Joel Klein, head of the Justice Department’s antitrust division, says that Microsoft’s practice of bundling its net browser with the Windows operating system is like a manufacturer of compact disc players insisting that people buy only its own brand CDs. Microsoft says that what the government wants it to do, which is to ship a competing browser with the operating system, is like requiring Coke to add three cans of Pepsi to every six-pack. Neither image is totally wrong, but both need hedging with so many additional facts that they are essentially useless.

The real stakes are competing visions of the future of the software industry. The government thinks that Microsoft’s Windows should continue its dominance as the operating system of choice for PCs. Only it should be frozen in time, containing only those features included as of, when--1995? Maybe roll it back to 1989? Well, we’ll work that out. Windows should then be made into a common carrier. Like a bus or a train, it should be forced to accept any software product that any developer wants to hitch onto it, and it should not be allowed to add any feature that might compete with any of these.

Microsoft Chairman Bill Gates has a different vision. It is: Who knows what will happen? Apple had a vision of total control of machine and software, rather like Klein’s metaphor of the CD maker. It reaped monopoly profits for a time, then cratered. Gates had a vision of an open architecture that tapped the creativity of multiple software makers and of an operating system that would keep expanding as the capability of PCs grew.

Gates’ vision is truer, so far, but maybe the future will be different. People are always complaining about Windows, so surely someone can build a better system. Most of Microsoft’s vaunted “monopoly” is that it keeps Windows too cheap for anyone to bother, but Linux, OS/2, Unix and others are waiting. Maybe we will have multiple operating systems, multiple applications and a middle layer of system integrators. Or we might have a few competitors marketing fully integrated suites--operating system, word processor, spreadsheet, browser, tax forms, graphics, all in one seamless package. Maybe it will be some combination of these visions or something else entirely, based on Java or the Internet.

The point is, no one knows--not Gates and not Klein. But Gates at least knows he does not know. The history of the computer industry makes clear that he was constantly getting surprised. In the early 1980s, he did not anticipate the power that would accrue to the owner of the operating system for the IBM PC; he resisted taking the project on, even as IBM fought to give it to him. Later, IBM’s failure to work with Microsoft to develop OS/2 as an alternative to DOS was a shock, and so was the lack of interest in writing for Windows by such dominant application makers as WordPerfect and Lotus.

In the mid-1990s, the wild growth of the Internet brought Gates up short and could easily have broken Microsoft. Gates is worth decabillions in part because he had a few big visions, such as the basic tide of growth in PCs and the creative power of open standards, but equally important has been his embrace of the fluidity of the future and an awesome ability to react to surprises. This is the opposite of the bureaucratic mind, which cannot stand uncertainty and fluidity and so makes the future predictable by stifling it.

So go to it, Gates. However unwillingly, you have been drafted as the champion of those of us who do not want our technology or our lives micromanaged by a committee composed of antitrust division bureaucrats, Al Gore, 20 state attorneys general drooling for governorships, the vultures of the plaintiffs’ bar and all those business people who would rather buy the government with campaign contributions than get out and compete. The odds aren’t with you--or with us. But it’s a great cause.

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James V. DeLong is an adjunct scholar of the Competitive Enterprise Institute in Washington, a contributing editor to Reason magazine and the author of “Property Matters: How Property Rights Are Under Assault--And Why You Should Care” (Free Press, 1997). E-mail: jdelong@regpolicy.com