Screaming Penguin

While it is reasonable to expect that customers would appreciate a better browser, it is a stretch to say they have been harmed by the lack of one.

While it is reasonable to expect that customers would appreciate a [cheaper phone service|affordable railroad cargo|cheaper petroleum], it is a stretch to say they have been harmed by the lack of [whatever].

That is "Monopoly 101". If you believe that the competitive environment is good for consumers, it has to follow that the absense of same is bad.

And that makes sense. MS perceived insufficient profit (be it financial, or otherwise) to justify spending money to improve a product. Whether or not this was a good business decision remains to be seen. Given that IE's closest competition is free to end-users, one can argue that it was a sound decision.

Monopoly 102: Monopolists do not have to invest in product development nor are affected by market pricing.

Well, there's a much easier and more precise indicator of a monopoly: competition is restricted due to application of force (be it legal or illegal, direct or indirect).

That is quite a stretch. Certainly Standard Oil to AT&T never sent goon squads out to beat up the competition or have them thrown in jail.

Monopolies are simply categoried by (a) domination in a market with high barrier to entry, (b) vertical and horizontal market expansion based on their original market through anti-competitive techniques -- exclusivity, dumping, bundling.

Opposition to "monopolistic" organizations is typically grounded in pragmatic concerns over ill-effects and market failure. The problem with this perspective is it ironically ignores reality. The forecasted ill-effects occur infrequently and are short-lived. The market (when it's free to act) punishes poor businesses and rewards good ones.

That is, really, just not true. While we don't "criminalize" monopolies in the US, we do force them to play by special rules, because history before those rules showed us that unchecked monopoly power will become exploitative and even contribute to/precipitate a larger economic collapse.

It is also quite presumptive to say what the ill effects are. This is great because there is such a clear-cut example of monopolistic behaviour to the detriment of the market. In the long view, however, you cannot know what the path not taken would have yeilded.

The fact is, in the real world there are "natural monopolies". Things like utilities that are localized and high barrier or operating systems which are tipping-point market and high barrer reall are natural monopolies. The market will lean towards a monopoly. This is the (a) factor above. However, monopolies are forbidden from (b) -- parlaying that into dominance in other areas, of which Microsoft has become a textbook example.

The difference here is you view the absense of capable competitors as equivalent to the absense of a competitive environment. Of course this does not address the original issue, which was the notion that because someone doesn't give me a better browser, they are harming me.

A lack of a competitive envrionment does implicit harm on it's own. Without price or utility competition, there is no motivation for a company to improve or not gouge customers.

Let's take Windows. No marginal cost, historically fixed deveolopment costs and each successive version has seen a price increase of 20-30% while demand moves up in predictable ways. The only reason Linux is a threat to Microsoft is because it has shifted that predictable demand curve.

I would certainly be fine going back to paying $30 for a browsers package if Windows would go back to being $60/seat retail. The fact is, the "bundling" hasn't given us increased value. We pay more now, in a larger market with no marginal costs, that we payed in 1995 when you bought everything seperately.

No, Bill doesn't charge $10k for Windows, but he also has a fixed supply/demand curve on which he can maximize his profits without worrying about shifts in demand because of competitors.
No one has to invest in product development. Sometimes it's a good idea, sometimes one's resources are best spent elsewhere. If there's a demand for the innovation, smart money will invest in profiting from that demand. How much will you pay for a browser?

The problem is, when you have a market with fixed or predicatable demand controlled by a monopoly, there is almost no impetus to invest in product development. The only reason Microsoft does it at the OS and Office level is because they have to drive just enough change from version to version to force their corporate customers to upgrade. Fortunately, they get to set the prices with no competitive influence so they can continually raise them, too.

AT&T certainly did. Just because their goons were in D.C. doesn't negate the fact that they had a coercive monopoly. Standard Oil is the best argument I could use for the lack of ill-effects during the brief life-span of a non-coercive monopoly. S.O. was dominant because they were efficient. Immediately after the "trust-busters" took a hatchet to them, oil prices rose rapidly, and did not return to S.O. prices for decades.

(a) AT&T didn't have anyone in government enforcing their monopoly, just regulating it to keep AT&T from taking over everything. S.O. wasn't "efficience". They were "vertically integrated". They did the Microsoft in reverse. They could keep oil prices high and let refinement and transit lead losses, preventing anyone esle from competing. The problem with that break up is without the vertical integration they were still not regulated, so people continued to pay inflated crude prices while paying market rates in the other areas for the few years it took other companies to catch back up and the market to correct itself.

Ok. Care to cite any instances where a non-coercive monopoly (i.e without government protection) precipitated a "larger economic collapse"?
The entire guilded age economywas based on monopolies. Frankly, the only one I can think of that was "coercive" in your definition was Pullman.

In any case, "barrier to entry" is red-herring. How many new airlines have started up in the last 10 years? Quite a few, and I would argue an airline is pretty capital intensive.

Yes, but (a) they are all low-margin short haul airlines and (b) an air line is capital intensive but capital retaining -- that's not barrier to entry. Bank loans me money on a $2m jet, if I got out of business in 2 years, they still get to foreclose on a $2m jet.

As for Operating Systems, how much consumer demand do you think is out there relative to the cost of a new OS? Just beacuse people are generally satisfied with a product (ignorance is bliss sometimes) does not mean the vendor is a criminal (well, I guess anti-trust laws changed that).

Again, this goes back to natural monopolies. "How much demand do you think is out there relative to the cost of building a new Cable Telivision System in a metro area?" Again, fixed predictable demand, barrier to entry, optimized costs (by the way, have you noticed that the cost of cable TV has skyrocketed since it was deregulated too?)

Is there huge demand for a new OS, no, not in our current environment. Microsoft, however, has done everything in their power to maintain that environment. The reason Netscape or Java were ever a threat was that they threatened to commoditize the OS. Microsoft, of couse, took their vertical monopoly and crushed them out of business by dumping product, violating contracts because they knew they could afford to take the lawsuit and by not just siginging exclusivity deals, but PAYING people vast sums of money -- money built up through 10 years of OS monopolization -- to take them.