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What is 'coercion?'

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agrippa1

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I'm hoping to get some insight in this. I've done a cursory search on key words and haven't found a discussion here, but please point me in the right direction if one exists (or a blog/article).

My question has to do with stipulations on trade deals, and whether they could be considered "coercion."

My example is Microsoft's stipulation several years ago that PC mfr's who market Windows PC's, not market PC's with other OS's (notably, Linux), as a condition of being allowed to purchase Windows for resale.

The question is: do stipulations intended to affect the behavior of vendors or customers, in a manner deleterious to competitors, have a proper role in a free market?

As a hypothetical, suppose Microsoft stipulated that it would write its software compatible with microprocessors, only if the processor mfr's stipulated that only Windows would be used on those processors, and refused to sell to PC mfr's who did not agree to such stipulations. Would there be a construct possible in which Microsoft could effectively seal out competitive operating systems, and if so, could that be considered coercion?

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None of that is coercion. Coercion requires the threat of force.

Neither party are required to do anything beyond that upon which they voluntarily agree contractually.

In contrast, if you were to force Microsoft to deploy it's OS under any other terms than those voluntarily agreed upon by the parties involved, then you (the forcer) would be guilty of coercion.

A business has the right to sell under any terms it wishes.

As a more general example, if I manufacture widgets, and you manufacture hoozits, and we agree that hoozits will be accessories designed exclusively for widgets and that my company, Widgets Inc, will agree to only approve hoozits built by your company, is anyone's rights being violated?

The big question to ask in any situation such as that mentioned: Are any rights being violated? Is anyone acting under the threat of force?

Edited by Chops
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The question is: do stipulations intended to affect the behavior of vendors or customers, in a manner deleterious to competitors, have a proper role in a free market?
Most certainly. Company A may bind the customer to the contract for a shorter period than Company B, a condition designed to attract customers away from B to A. Loss of customers is deleterious to B. That's their tough luck: they need to counter with something to keep their competitive edge. If you have a superior product, you have more latitude to set conditions that will not benefit your competitors. Coersion involves force, and in contract cases that always involves getting the courts to use force against a company for a social-policy reason.
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In its simplest form: the "threat" of not giving you a value is not the same as the threat of removing a value you already have. The first is not coercion, the second is.

I wont give you my x unless you do/give me your y is not coercion. I am stipulating conditions under which I will give you a value.

I will take your z unless you do/give me your y is coercion. I am stipulating conditions under which I will refrain from causing you a disvalue.

In the first case you have to choose between "no change" and "gain x and lose y". In the second case I am making you choose between "lose y" or "lose z". Obviously the second type of transaction depends on the use of force, or you would simply choose "neither".

Edited by mrocktor
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