Mirrored from Wired Magazine, Issue 5.03, The Robin Hood of the Rich for stability.
A lawyer named Rebeck is commenting on Microsoft's effect on the market, and the use of outdated economic models.


Despite his unrelenting attacks on Microsoft, Reback sees the company's tactics as the symptoms of a disease, rather than the causes. He reserves his most caustic comments for certain economists, who he says are "often in deep space." The problem, Reback adds, is that many analysts are asleep at the switch, applying old laissez-faire models to new economic models.

The main underpinning of this ideology is the belief that free and competitive markets bring supply and demand into equilibrium and ensure the best allocation of resources. But Reback's DOJ white paper relies heavily on a different school of thought in antitrust economics, that of increasing returns. The model, championed by the Santa Fe Institute's Brian Arthur, among others, shares strong parallels with modern nonlinear physics and doesn't accept laissez-faire's traditional checks-and balances.

Instead, the concept of increasing returns allows that small, random events occurring at critical historical moments can determine choices in technology that are extremely difficult and expensive to change, resulting in a "lock-in" of inferior products. Production costs consequently fall, and the technology becomes entrenched, regardless of advantages alternative products or services offer. The leading product tends to stay ahead and even increase its lead. Predictable, shared markets are no longer guaranteed, and the best technology doesn't always win. Some textbook examples: the QWERTY keyboard, the VHS videocassette format - and Microsoft's Windows operating system.