Monopolies Real & Imaginary (published in AOB News)

Janet Reno’s vicious attempt to destroy Microsoft by fining them one million dollars per day, for the “crime” of showering computer users with free and innovative software, is instructive. It makes unavoidably clear the nature of antitrust laws and of modern economics’ erroneous conception of what constitutes a monopoly. According to the current wisdom, the defining characteristic of a monopoly is its size in relation to its market. Yet in a free economy a company can only grow large, and thus become a “monopoly,” by means of creating better and/or less expensive products than its competitors.

 In fact, the real essence of a monopoly is the ability to forcibly restrict competition. The only agency that can legally use force is the government. Therefore, the only true monopolies are those created by the government, which by their nature are able to eliminate competition by law, which means by the threat of the government-initiated coercion.

The present conflict is an eloquent illustration of this principle: the size of Microsoft, and its likely ability to dominate the browser market in the future, are directly attributable to the widely acknowledged innovative superiority of its product, combined with the fact that Microsoft is offering this product more cheaply than that of its competitors, i.e., for free.

Thank god we have the antitrust laws and such conscientious public servants as Ms. Reno to protect us from such crimes, while at the same time expropriating our property via taxation to support such non-monopolies as our wonderful public education system, and our amazingly clean and efficient public transportation system.