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Jews for Java
In Israel, ultra-Orthodox rabbis have banned their followers from cruising the Web, but that's not stopping the observant from hacking code.
By Sarah Coleman
[04/06/00]

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[04/05/00]

Break up? Make up? Appeal?
Microsoft watchers, company leaders and critics weigh the software giant's future in the wake of the antitrust ruling.
Salon Technology staff report
[04/04/00]

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Software outlaw roams the streets!
So Microsoft broke the law. But while the judges argue among themselves, the company remains free to stalk new markets.
By Scott Rosenberg
[04/03/00]

Judge to Microsoft: Guilty!
Thomas Penfield Jackson slams Microsoft for abuses of monopoly power.
By Lydia Lee
[04/03/00]

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We know what to thank for this cultural milestone, of course. It was the Microsoft trial that brought these issues to popular attention. Is the Microsoft decision also the place where they will be resolved, giving us an antitrust law for the information age? Definitely not. Despite the attention given to Judge Thomas Penfield Jackson's ruling this week, we are in danger of missing one of the main lessons the Microsoft trial could teach: that the state is deeply implicated in helping to create the new digital monopolies as well as in trying to subvert them.

The easiest way to understand this point is to think about the continuing debate over antitrust policy. What do we do after the Microsoft case to stop the next monopolist of the information industries? For antitrust skeptics, the answer is "Nothing." We should leave things alone. Let the market work it out. This view is part of a larger intellectual agenda aimed at circumscribing, or perhaps eliminating, the role of the state in the economy. When is state intervention needed? The standard answer used to be that state intervention was needed whenever there was serious, continuing market failure. In a monopolistic market, for example, state intervention may be necessary to restart the beneficial processes of competition.

Over the last 25 years, however, the influential "Chicago School" of lawyers and economists has claimed that this "market-failure" rationale was applied too broadly. In antitrust law, they argued that monopolies may in some cases benefit consumers and that even monopolistic markets can self-correct. The greater the monopoly, goes the argument, the greater the incentive to other firms to find some way to circumvent it. That pressure, in turn, will encourage the market leader to remain lean and nimble. Microsoft must constantly improve quality and service for fear that another company will take away its advantage. If the monopoly continues, it is a sign that the market is working, not failing.

This point of view has no less a supporter than Federal Reserve Chairman Alan Greenspan. Back in June 1998, just as the Microsoft case was getting started, Greenspan laid out his ideas during Senate hearings on antitrust and mergers. The hearings have long since been forgotten in the flurry of news about the case, which is a shame. They shed a revealing light on "life after Microsoft." In fact, quite without meaning to, Greenspan's testimony cast real doubt on the current neo-liberal orthodoxy about the state's role in a digital marketplace.

The first surprise was that Greenspan was quite clear about his views on antitrust policy, (to be fair, this is a standard of clarity that equates to the mildly Delphic in an ordinary human being). A close study of his reasoning is worthwhile and not just because he is Greenspan: a man who surely must get a kick out of the thought that at any moment he could leap to his feet in the middle of a boring dinner, shout "irrational exuberance!" and bankrupt three pension funds before his bottom hit the chair again.

Greenspan's words deserve study because his carefully written testimony is the mother lode of the vaguely conservative, loosely monetarist, entirely triumphalist ideology of the neo-liberal marketeer. The stuff is so pure a representation of laissez-faire folk wisdom, it deserves a special name; we should call it Zeitspan, or perhaps Greensgeist.

To hear Greenspan is to hear the people who think they are "the market" talking to themselves, an endlessly reassuring stream of consciousness that returns narcissistically again and again to the self-correcting wonders of market function. (The whole thing is only more ironically delicious when one realizes that one of the country's leading mouthpieces for laissez-faire economics is a state official whose job is to engage in price-fixing: in this case, literally setting the price of money.)

This is not to say that Greenspan is a mere flack; he is actually both conscientious and lucid in his self-assigned role of "economics tutor to the Congress" and his testimony dutifully ran through the basic outline of a Chicago School view of antitrust law. It is precisely that conscientious lucidity which allows us to see the difficulty that neo-liberal antitrust talk has in describing what states actually do in markets, particularly information markets.

Next page | Greenspan meets Sherman