Is Microsoft A Monopoly?

As I mentioned before, I’m currently enrolled in a microeconomics course that makes use of Mankiw’s textbook.  I haven’t read much of the book, save for the assigned homework questions and his chapter on oligopolies.  He begins with a discussion of monopolies, and asserts that Microsoft is an example of a market monopoly.  This claim struck me as quite hilarious for two reasons.

First, Mankiw uses a very narrow definition of market to prove his point.  Instead of placing Microsoft in a software market, he claims that Microsoft has a natural market monopoly on Microsoft software, since one can only acquire Microsoft software through Microsoft.*

What Mankiw should say, in order to be precise, is that one can only legally acquire Microsoft software from Microsoft.  But this would undermine his point, because what enables Microsoft’s monopoly power is not the natural mechanisms of the market but rather the government, via intellectual property laws.  Therefore, Mankiw’s narrow definition fails because it Microsoft’s monopoly power is the result of governmental favoritism and is not a natural market monopoly.

The second thing that makes Mankiw’s claim laughable is that he ignores the broader market of software.  There are plenty of alternatives to Microsoft software.  Mac, Linux, and Unix are all alternatives to Windows; OpenOffice is an alternative to Microsoft Office; Wii and PS3 consoles and games are alternatives to the Xbox console and games; etc.  Mankiw, if he were being honest, would say that Microsoft cannot force anyone to buy any of their software, and is therefore not a monopoly in the sense of being able to make prices.

Of course, if Mankiw were concerned with honesty, he would have to say that Microsoft, though not a true monopoly, does have a limited form of monopoly power via government regulation.  Saying this would be heretical to mainstream economics because the natural conclusion of this assertion is that improving market function would require less government, not more, and we can’t have that.

* Of course, this latter claim is patently false as one can easily acquire Microsoft software on a variety of torrent sites.

1 comment to Is Microsoft A Monopoly?

  • jessica Tipton

    Its an old book that has no relevant theory in todays world. MS was a monopoly in software but has LOST that battle against open source about five years ago. You will never hear this cause open source hasnt the means to advertise with billions to promote this. Open source won the battle and microsoft is to catch. Claiming new terms like ‘cloud’ which was an open source process for almost a decade. They are claiming this cloud thing when in turn open source systems have been doing it for years.

    What they do have a monopoly in is workers!

    I am a ten time Microsoft worker and want to help you expose the unjust 21 first century slave labor they use. Washington state politicians are in bed with Redmond. MS is the sole provider of profit for the state government. They do what they want cause there is noone that can stand up to their billion dollar law team.

    MS deserves no credit
    MS is the worst company in the world to work for.
    My only suggestion to you is learn java or get out of the computer field. The computer field has failed since MS was the company that laid the foundation for other computer companies to follow.

    Nothing more than sweat shop labor in todays market.

    They import bus loads of immigrant workers from India and China daily. They have imitation companies apply for government visas so they do not. They lobby for increases in the visa program so they can stay competitive by hiring workers from other countries and shipping them in for a month. These immigrant workers get paid in their own countries currency. Mexicans get paid in pesos, India gets paid in rupees, etc These imported workers get paid less than a dollar an hour. These workers live in Redmond at 15 people to a one bedroom apartment. They have increased hiring College interns by 100%, advertising and promoting at college job fairs. Stay away from this corruption and industry that is failing on all levels. Interns DO NOT get paid a paycheck while working at MS. They get zero dollars. They only get SHARED HOUSING allowance, rental car, and meal card valid only at MS dining halls M-F. These interns think they will have a chance at getting a fulltime job if they do an internship, BUT this NEVER happens.

    I want to help you with you report and can give you important information regarding the illegal activities of a company that has been going out of business for ten years.

    What makes them a workers monopoly, is the fact they are the only game in town. When you move to Redmond area, the only computer company is them. Then you have all these imitation companies that surround the company feeding off the money and will do anything to please MS. These imitation companies do immoral acts against workers setting them up at the request of MS.

    MS tells them they will give them Gold level status if you do this to this worker! They give incentives to companies that SETUP FAKE INTERVIEWS ONLY INVESTIGATE past employees.

    THEY WILL THREATEN LAWSUIT if certainsemployees try to find jobs at other computer companies.

    These other smaller startups, have no lawyers that can compete against MS legal threats. So other companies do not hire, high level/high profile former MS employees!! What makes matters worse is its behind closed doors and the workers who are directly involved never hear and continue to apply to companies with zero chance of ever getting a job. They are prisoners in Redmond, with the only place to go is homelessness. I have worked on over TEN different major projects over the last fifteen years at MS. During these projects which hold the largest projects they ever developed, I was forced to get my food from the foodlines and had to take a bus everyday cause I couldnt afford gas. They care nothing about its workforce. People are inventing billion dollar ideas for them on a per hour basis and let go after patents are filed. They deserve zero credit and should be broken up and dissolved as a company with no moral values. A company built by lawyers. The largest projects that you see are built by a handful of devs. Meaning the top projects they have released over the years were built by groups smaller than 5 people! Yet there are 95 other staff that market and sales the project, the real innovators are treated like trash and forced to eat from the trashcans. I only write this at disgust and awareness to those thinking about becoming a Microsoft Slave. The company represents inhumane work conditions for the next few decades as other companies in their industry repeat the same methodologies. When you work for them you are closed out from the rest of the world. If you work on their products, you are only experienced to work on those type of products. Marginalized and taylorism is their HR. When you try to get another job, you have no other skills besides the push button worker on some obsolete server/pc platform. These skills are worthless outside of redmond. The company will NOT train you to find employment in other areas. ONLY MS technologies. You work on programs that never get released to the public. Your skillsets are limited to applications that no other company knows about. You have no other training. When other companies look at former MS employees they all say the same thing. Unfit and unskilled.

    They continue to hurt families struggling to pay rent by forcing other competing companies to lawsuits.

    MS sets up FAKE interviews. Has imitation companies setup fakes interviews, by renting out buildings locally promoting this fake company and having unemployed ms workers, interview under investigation. They investigate through imitation companies based in India posing as real legit companies having interviews. When in fact they are only investigating for MS. All these workers wasting precious time and energy to interview with FAKE companies setup by MS!

    If they hear former employee is getting contacted by competitors, they get these imitation companies to harass with calls and emails setting up fake interviews diverting the workers away. They threaten lawsuits to the competitors! All the time the workers go without work. Abused by the immoral policies of Microsoft HR. They have destroyed the one thing that would give them an advantage from the other companies.

    I will continue to tell these stories forever or until they are dissolved.

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