Monopoly friendly (1/X)

Today, technology and the Internet favor more than ever the rapid emergence of new monopolies.  Google and eBay are the best examples.

I think that certain monopolies are both a necessary and natural part of the economic evolution. We must stop them from turning into predators.

Let’s begin with an example of a monopoly that is posing problems and talk about Microsoft.

Let’s recognize that technological innovation today owes a lot to Microsoft.  Bill Gates’ initial vision of “having a computer on every desk and in every home” was a good one.
Undeniably, the standardization of the operating system favored progress, just as Henry Ford favored the development of the automobile industry.

This “positive” monopoly has become over time a “hostile” monopoly.
The empire has become a sort of economic dictatorship, and its means for self-preservation have not always been legal.

The capitalist system today encourages the natural emergence of monopolies:
Shareholders are conservative by nature.  It’s not the innovation of Microsoft that interests them; it’s Microsoft’s monopoly status.  Shareholders don’t like surprises. 

Though some companies like Enron, Parmalat and Carlyle went too far, destroying monopolies or the stock market is not the right response.  That would be throwing the baby out with the bath water.  Both monopolies and the stock market are natural products of a kind of evolution, and we should strive to preserve them for the sake the economic ecosystem.

How can we encourage the growth of friendly monopolies?

Comments

[Marty Morrow]

to me, what defines "friendly" vs. "predatory" is innovation. Is Google friendly or predatory when it releases its desktop search capability? I would argue that it is friendly because it is a significant new feature that benefits all. Predatory actions are efforts to thwart innovation to protect your base. MicroSoft bundling IE into their OS to beat NetScape is a good example of this. If you are being innovative and bringing new capabilities to the market, then no matter what your size in the market, I think you would be perceived as being friendly.