On the contrary - it is exactly because market capitalism is inherently vulnerable to legacy inefficiency, due to its inability to transcend a local sub-optimal equilibrium, that Microsoft could entrench itself. We got stuck with Microsoft almost exactly the way we got stuck with the standard typewriter-derived keyboard.
EXACTLY (although the story about the qwerty keyboard being purposefully inefficient is a myth...and you can convert your keyboard to Dvorak or whatever at any time, computer keyboards are very good about that). Now please find me the "keyboard monopoly" or bad apples that coerced us into that. You also forgot VHS defeating Betamax, a victory that was won mostly because porn went to VHS, and it makes more sense to buy a machine with broad compatibility than one with limited compatibility and superior features.
That is not "suboptimal" though unless you live in a world without transaction costs. In fact, it's just "economics" that the costs of not only switching, but in switching and maintaining system-wide compatibility would be prohibitively expensive.
The real optimal solution will be one that accounts for transaction costs, because those are very real. A hypothetical optimal solution can ignore them, hypothetically.
iceaura said:
It was exactly not like the Blu-Ray decision. The Blu-Ray decision was a political one - a trade group decision, involving deliberate discussion and reasoning among the major format consumers.
So cute . . . Why pick one, and worse, how dare they "force" you and me to buy the one THEY want. Maybe we prefer HD-DVD, and they certainly were not elected to set policy for us. They are encouraging a fucking monopoly by your definition, anticompetitive behavior that, if you believed your take on Microsoft was correct would be anticompetitive in clear violation of the Clayton Antitrust Act.
iceaura said:
And that's what you need in situations like that - depending on "the market" to install better "common platforms" simply doesn't work, for well known game theoretic and well illustrated, historically, reasons.
Actually game theory says that we do not need an industry organization to tell us which to pick, that a market of independent consumers can select on its own and will select a BETTER alternative in the absence of such a group, because that group exerts disproportionate power over the decision and yet their preferences are not representative of any "average" individual, but are peculiar to their own position.
That is what happened with Microsoft. MS DOS was a stable and powerful operating system for PCs. There were others that I can remember, and they all had issues. MS DOS's issue was that it was confusing to people who did not understand it, and even that was a plus for some of us who did understand it (because we were able to feel smarter than the masses).
Then what happened? Apple made a better system. Microsoft then invented Windows to copy them. By the time that had happened though, we were already committed to Microsoft, so we went along for the ride.
The problem for Microsoft is really one of just staying at or above the level where the aggravation of remaining with MS Windows is less than the costs of switching. Honestly, though, Windows is far and away above that bare minimum level. You may prefer Snow Leopard or Unix or something, but Windows is by and large perfectly functional and capable of doing all the the average person and business needs and then some. We also all benefit because software developers have a good and stable platform around which to design programs, and compatibility issues are, for Windows users very limited.
It's fun to bitch about Windows, but unless you are looking for chinks in the armor, a copy of Windows will last you years with the worst problem you face being a crash or two and having to reboot. They are not bleeding anyone dry forcing us to "subscribe" to the Windows service (and there's no reason they could not try that).
For all their monopoly power (and by the way the definition of a monopoly is an industry that has one and only one producer, an "oligopoly" is one that has few, but more than one producer, including "dominant firm model" oligopolies), they don't abuse it much, and the sole complain you have is that everyone should be forced to use the operating system that is selected based on features (most of which Windows has).
It seems to me you are just unhappy because our operating system of choice was chosen by the market rather than a collection of "experts". I also suspect that perhaps you view transaction costs not as a fact of life, but as a serious market flaw. They really aren't. They do reduce efficiency, but they are a fact of existence. It would be nice if we did not have to eat food to survive, but it is not an market failure that we do.
Even going back to the Blu-Ray example, let's say you are right and Blue ray won solely because of an unelected cadre of elites made a decision on behalf of the market as a whole. Suppose a new format came out tomorrow that was even better? Could the elites force a new change if they wanted to? No. They'd fail, because people are all out there now buying their PS3s, other blu ray players and movies. We're now locked in, and transaction costs have mounted enough to provide resistance to any new change. The elites in that case could give us a less democratic way of selecting the winner (yay?) buy the fundamental problem is back. We're stuck with that format for at least a few years.
Could a better operating system be designed by an industry collective? Yes, but would that collective provide the levels of ongoing support and updates that an operating system needs? That is less certain. Building a Blu Ray player is easy. You never have to update its software, and no one is trying to hack your Blu Ray to steal your credit card information. It's useful to have one company on the hook for providing those services, and they are going to want rewards to compensate them for all the risks of being in that position.
A loose alliance of profit motivated companies acting in concert to produce a specific market outcome is sometimes called "collusion", so I am surprised you hold that up as the model of good economics.
Microsoft is more akin to a natural monopoly than a coercive monopoly, and like a natural monopoly they really only need some basic regulation and then our thanks, and our thanks, for producing a reasonably good product even without all the oversight and regulation.