Laying the foundation for attacking Google

[Rule of Reason Blog]

By Nicholas Provenzo from The Rule of Reason,cross-posted by MetaBlog

Below is a quote from Washington Post business columnist Steven Pearlstein excerpted a column he wrote on Google titled "How Much More Should It Be Allowed to Grab?"

[P]recisely because of its success, it's fair to ask if Google should be barred from furthering its dominance through acquisitions or collaborations. At issue are the recent purchases of YouTube, the leader in online video sharing, and DoubleClick, the leading broker of online advertising; in both instances Google used its gusher of profits to outbid rivals. There are also new joint ventures with Clear Channel, the giant radio broadcaster, and EchoStar, the satellite television operator.

Consider this: There may never have been a Google without the government's antitrust suit that prevented Microsoft from crushing upstart rivals. By the same principle, isn't it time to begin restraining Google to increase the odds another Google will come along?

I think it is safe to say that Steven Pearlstein will never be as productive or successful as any of the top leaders at Google. After all, if Pearlstein had real business acumen, he would not be a mere newspaper columnist hawking his opinions in a sea of opinion.

Nevertheless, Pearlstein feels himself competent enough ask if it is appropriate to regulate a massive company with thousands of employees and tens of thousands of investors—on the grounds that this company is now too successful and represents a coercive threat to others. Never mind that Google cannot outlaw or regulate its competitors; its mere success equals an act of violence that must be squelched.

Yet consider this: smashing the ability of the successful to reap the benefits of their good judgment and hard work creates a powerful disincentive for the successful to produce. Just what kind of innovation does Pearlstein think will come when the super-productive and super-innovative realize that all their best efforts guarantee them is an antitrust suit?

I suspect that Pearlstein doesn't think that deeply about the issue. The simple idea that there is some imaginary innovator out there who is somehow denied the right to outflank Google is probably justification enough. And that's what you get when you enshrine need as a value—and when great producers fail to justify their right to exist for their own sake.

http://ObjectivismOnline.com/blog/archives/002494.html

[KendallJ]

Columns like this Washington Post column make my blood boil.

When people tell me that Atlas Shrugged is wholly overblown version of today's state of the world, this kind of stuff proves me right.

Thanks Nick. I gotta go calm down.

[Mimpy]

This stuff makes me angry, too. Google is fast, efficient, and very user friendly. Everything the company does...it does well. What is the problem???

[Galileo Blogs]

This stuff makes me angry, too. Google is fast, efficient, and very user friendly. Everything the company does...it does well. What is the problem???

There is no problem, and that's the point. Antitrust is consistently used to attack the leading companies in an industry. There are so many examples, of which these are a small handful:

Standard Oil, the leading oil company by far in the early 1900s (this was the landmark case that validated antitrust; the company was broken up)

Alcoa Aluminum Company, approx. 1945, the leading aluminum company by far: "We can't wait for tomorrow." was their slogan. They dominated the aluminum industry by anticipating and even "creating" demand through finding new uses for aluminum. Their punishment for this success was that they had to hand over some of their plants to an upstart competitor.

Microsoft, the leading software company, attacked by Lilliputian bureaucrats, both federal and state in the United States, and continuing today with the European Union

Sirius and XM radio merger -- the antitrust people want to deny this merger of two companies that pioneered a brand-new industry, satellite radio.

Google is the leader in its field of online advertising and searching. Now it is being punished.

There is nothing good that can be said about antitrust. There is a lot of intellectual sophistry that rationalizes these attacks on the most productive businessmen, but they are specious. Perhaps in another post I might comment on it.

[apologies for bad grammer; in hurry today!]

Edited April 27, 2007 by Galileo Blogs