De Long on network economy

Henry C.K. Liu hliu at mindspring.com
Tue Jun 22 09:35:41 PDT 1999


JayHecht at aol.com wrote:


> Lock-in effects can help to create useful standards (VHS) but may be inferior
> quality (Beta). I've never used a Mac but Doug (as well as anyone else) knows
> what a better system it is (Again, I defer to the almighty DH).

Apple's strategic error was its focus on the education sector where money was in limited supply.


> It is not clear to me what is so novel about all this: can capitalism exist
> without excludability/appropriately of profits? No. You want to give away
> software, music, econometric algorithms, etc. Fine. But unless you've got a
> trust fund, working wife or some other visible means of support, I'm not sure
> how long you can sustain this kind of non-market activity.

Or an IPO funded war chest. On the issue of excludability, all religious organizations have been operating on that principle for centruies.


>
> Brad: what is the (ultimate) punch line you are suggesting??? That
> shareware is going to reconstitute the property relations in capitalism or that
> zero incremental cost of computing will somehow raise the standard of living of
> poor Americans?
>
> I always thought we should organize society like the stock cabinet at an
> insurance company: you need pencils, got take 'em; you need paper, go take
> 'em. On the other hand, about a year before they left NYC, management created
> a "stock monitor" who required us to give in the cardboard back of our pad or
> empty pen to "prove" that we really needed it. So much for socialism in one
> company!

These companies will soon find out the the cost of collecting and accounting for the evidence of use is exceeding the cost of potential wastage. In many sales departments, sales people are now pounded for not spending enough on expense accounts. The direct pay-off formula is no longer operative, because good will comes unexpectedly and indirectly. Everything has something to do with the price of eggs in China.


>
> Brad, I'm interested in your argument, but I need to think through where you
> are headed with it.
>
> Jason

Capitalism has perpectual longevity; that where he has been and where he is going.

Henry C.K. Liu



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