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 Dan Fylstra has
been involved in the PC industry since its inception. He was founding
Associate Editor of BYTE Magazine in 1975, and founder of VisiCorp, the
marketer of the first successful computer spreadsheet VisiCalc, in 1979.
He is currently president of PC software vendor Frontline Systems, Inc.
In 1998 Fylstra, worried about the threat of increasing government
interference in the personal and economic realms, joined the Libertarian
Party. He has spoken to computer industry leaders, urging them to join
the libertarian movement in the struggle for online -- and offline --
freedom.
In 1998 Fylstra wrote the following widely-distributed article on the
topic.
OPENING PANDORA'S BOX:
An Open Letter about the Politicization of the PC Industry by Dan
Fylstra
INTRODUCTION: IS THIS WHAT WE EXPECTED?
Last year, Netscape and several other PC industry companies appealed to
our government to help them in their fight against Microsoft, whom they
felt was using its market power with Windows to gain an unfair advantage
in the browser wars. Our federal and state governments have responded,
and the results are everywhere in the daily news. I'd like to comment,
not about Netscape or Microsoft, but about the politicization of our
industry, what it means for our future, and what fundamental choices we
can make going forward.
Somehow, things are not working out quite the way we expected: As I'm
writing this, we're waiting to find out whether the Justice Department
and/or a dozen state attorneys general will file lawsuits to stop the
shipment of Windows 98 -- a decision which will impact the fortunes of
not just Microsoft, but literally thousands of smaller companies,
hundreds of thousands of us who make our living in the computer
industry, and tens of millions of consumers. And there are strong hints
that the government will soon launch an antitrust action against Intel.
(Intel? What did they do? Among other things, they paid out money to PC
makers who put the "Intel Inside" logo on their machines.)
Now, in countless trade press articles, columns and editorials, people
are asking: Should the government be involved? Will they do the right
thing-whatever that is? And how will it impact us? Have we opened
Pandora's box?
HAVE WE OPENED PANDORA'S BOX?
My answer is yes-we've opened Pandora's box, and it will prove
impossible to close it. Our industry is being politicized. Henceforth,
it won't be enough to design and build great products, and sell them at
attractive
prices. We'll also have to compete in the political sphere. And that
will take time and money, which will be siphoned off from product
development and marketing. We'll have to worry about whether we have
enough influence in Washington, and in our state capitols. Have we hired
the right lobbyists-donated to the right PACs-hobnobbed with the right
politicians?
Will we get our share of any government largess, and can we sneak in
our special exemption from the latest tax or regulation? There will be a
new pecking order, defined by the amount of political influence enjoyed
by various companies, trade associations and other groups. And who is
likely to come out on top of this new pecking order: The startups with
the hottest new technology, or the established companies who've had the
time to develop their political connections? Let's be blunt: It's pretty
obvious that in today's White House and Congress, influence can be
bought, and the price tag isn't all that high by our industry's
standards. If a night in the Lincoln bedroom goes for $50,000 and a seat
on a Commerce Department trade mission is just $100,000, the established
leaders in the PC industry ought to be able to afford plenty of
influence. As for the small and medium-sized companies, well-if you
can't afford to pay, you can't afford to play.
WHO AMONG US WILL HAVE THE MOST INFLUENCE?
And who can afford the most influence? Which company is responding to
the pressure brought upon it by drastically stepping up its lobbying
efforts and political contributions? Microsoft, of course. Bill Gates is
no dummy, and he's said it quite explicitly: He used to think that all
he had to do was design and build great products. Now he realizes that
that attitude was "naive." The folks who hate Microsoft, the
800-pound gorilla in a relatively free market, should be worrying about
the future Microsoft, the gorilla with so much political influence- so
many senators and congressmen in its back pocket-that it's practically
untouchable. No, this won't happen next month or next quarter-but what
about four years from now, given our politics today?
We've worried about the market power of a few companies like Microsoft,
but we haven't anticipated how the true coercive power of government
might be used for or against us. After all, you don't have to buy
Windows 98, and many people won't. But you do have to pay your taxes, or
go to jail-to finance things like the federal Market Promotion Program,
which pays for McDonald's hamburger ads overseas today, and-who knows?
-- might pay for Microsoft's browser ads overseas tomorrow.
WILL THE GOVERNMENT DO THE RIGHT THING?
Most of us cling to the notion, or at least the hope, that the Justice
Department or the state attorneys general will somehow act intelligently
in the public interest, and things will turn out OK. We've never
examined public choice theory, which predicts that in the public sector
as in the private sector, key players will pursue their own
self-interest, not the broad public interest. We need to recognize the
state attorneys general for what they are: Political entrepreneurs who
are simply riding the anti-Microsoft wave for all it's worth, seeking to
advance their own careers. The results for consumers or for our industry
are beside the point, as long as we are not that politically
influential. Indeed, public choice theory predicts that a political
system like ours will transfer wealth from the politically unorganized
to the politically influential. The ideal outcome, from the politicians'
viewpoint, is that we all become supplicants, on an ongoing basis,
fighting among ourselves for the favors that only they can hand out.
Pandora's box is open. The impact of politics on our livelihoods is
growing every day, and we don't know what to do about it. Most of us
would rather avoid thinking about or spending time on politics-we'd
rather be creating new technology, and satisfying more customer wants
and needs. Many of us, if asked, would echo the classic cry laissez
faire-leave us alone! But the politicians won't leave us alone. Because
of our relative lack of sophistication and lack of involvement in
politics, we are on the defensive. We're likely to end up on the short
end of any compromise-whether it's about strong encryption, Internet
access and freedom of speech, electronic commerce and sales tax, you
name it.
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