Archive for November, 2011

The Not So Free Market

Monday, November 28th, 2011

I have a small business. I am fortunate to be competing in the relatively free market for Macintosh software, a market that is comparatively unburdened by excessive government regulation and monopoly control. This is a temporary window of opportunity that exists only because Apple’s market share is, so far but not for much longer, small enough to have flown under the radar.

The government is after me. The city, county, state, and federal governments all have their hand out. They all want a piece. They all want my money, which they had nothing to do with earning. I already pay property taxes and sales taxes and income taxes. My business is on the internet. I don’t use any city, county, or state services. Now they want city business tax, county business tax, state business tax, city business property tax, double federal payroll taxes (employer plus employee), and they all want voluminous paper work that takes up more of my time than I can afford, but which is trivial for large corporations with legal and accounting departments. Fortunately I don’t, yet, have to worry about the EPA or OSHA or the NLRB.

The majority of federal business regulations are designed to enable large corporations to crush small competitors. This is inevitable. Congressional politics is funded by lobbyists and campaign contributions funded by large corporations.

I might as well be cooking meth. As far as the government is concerned, small business is a criminal enterprise. All small business men and women in this country feel more or less the same way. We all pretty much vote Republican, but it doesn’t do us any good, because for one, there are not enough of us, and for two, the Republicans are almost as corrupt as the Democrats.

Microsoft, for example, crushed competitors by using their desktop operating system monopoly to make competitor software vendors’ application software fail to function in Windows altogether, or at least not as well as Microsoft application software. Windows was purposely designed to generate error messages and crashes for non-Microsoft applications.

The Microsoft Internet Explorer browser software became dominant, putting NetScape out of business, by making IE free and an integral part of the Windows operating system, and by coercing hardware vendors to bundle Windows with all PC hardware purchases. Hardware vendors are forced, by contract, to pay for Windows, including Internet Explorer, whether they want to or not, for every hardware system that they sell. So, of course, they bundle it. God forbid that they should alienate Microsoft.

This is patently illegal. It is every bit as egregious as John D. Rockefeller’s Standard Oil competition-crushing illegal practices at the turn of the 20th century, whereby the railroads that Standard Oil owned charged higher rates for non-Standard Oil shipments. But Microsoft has been given a pass by the U.S. Justice Department, under both Republican and Democratic administrations, because of the money poured into D.C. lobbyists and Congressional campaign coffers.

Small businesses like mine are only allowed to exist in small niches that have not yet been targeted by government-supported big business. Once the market has reached a size to be of interest to the big boys, it very quickly is no longer a free market. Once it is worth doing, the small fish are driven out of business by the big fish, with the government as their indispensible ally. Large government-connected corporations are no more fans of free enterprise than the most fanatical Marxist.

I wish that the federal government were a check against the monopolistic practices of large corporations. That would be great, but the reality is that the government is the friend of the monopolist, and I fear it always will be. Given that reality, as a small business man, I would rather that the government stayed out of it entirely. The big guys will continue to crush small competitors ruthlessly, but at least they would no longer have the government helping them.

I am forced to conclude that the only solution to the inevitable dominance of monopolistic control of the free market, is less government interference. The tiny mammalian shrew-like creatures that eventually prevailed against the dinosaurs did so without government intervention. Apple’s eventual triumph over the Microsoft dinosaur has and will occur without the help of the government. The inevitable demise of the geriatric music, TV, movie, and newspaper monopolies will happen in spite of federal legislation paid for by said industries, thanks to the internet, which has not yet been overtaken by the disingenuous cries for net neutrality and “fairness”.

In the long run, serving the customer will prevail over screwing the customer, because the customers are not as stupid as they look. The government can only delay the inevitable. That is my naive hope and prayer.

Thanksgiving Day Video

Sunday, November 27th, 2011

Candace, Sarah, Al, Morgan, and, last but not least, Candace’s mother, Mary.

images/MVI_3431 11.31.56 PM

Providing Value

Tuesday, November 15th, 2011

When I lost my last job in San Francisco, I knew that I would never have another. Why hire an old guy who wants too much money, when you can hire a young, energetic guy for half as much? That was the conclusion my employers arrived at, and I don’t blame them. I would do the same in their place.

I like this quote about employment in the 1950’s from this article:

If you could read, follow simple instructions, and settle into a routine, you could find a job in the post-war economy.

That is no longer true. Nowadays you need to have a real skill. It can be a blue-collar skill like welding, plumbing, electrical, hvac, or it can be a white collar skill, computer programming, bio-engineering, etc., but it has to be something.

It was 2004. I was 60 years old and unemployable. But I did have skills, over 30 years worth of developing software, on every computer and every computer language of any consequence during those three decades. So I set to work on the best idea I could come up with and developed MailSteward for the Macintosh.

It was something I wanted for myself, a searchable, relational database of all my email forever. I turned my crude UNIX script into a commercial Mac application and started selling it on the internet. For the first two years, sales were $200 to $300 a month. It was too buggy, not enough features. I worked constantly late into the night, fixing bugs, adding features. We lived on savings, and when that was gone, credit cards.

After two years, it was finally good enough that people started buying it. Now it brings in, gross, about $90,000 a year. I’m still working on it all the time, though not as frenetically as in the past. And I’ve added three more apps to the mix, FileMyFiles, DiskRefresher, and WordWrapper.

The way capitalism, real capitalism, works is that everyone has to provide something of value to other people, that they will pay for with money. Money, when it is not being inflated away by the government, being a store of value. That’s capitalism in a nutshell. We used to be a fairly capitalistic society, but not anymore. Nobody is, but there are now a few nations who are more capitalistic than we are, which never used to be the case.

It is very much my sense, though I am too lazy to back it up with researched evidence, that there is a rising percentage of the adult population who are not providing anything of economic value. A certain amount of that is inevitable. We must care for the old, the sick, and the disabled. But somewhere along the line there is a tipping point, when there are too few people providing value, and too many people not providing, but consuming that value.

I think we are past, at, or quickly approaching that tipping point, here in the United States, in Europe, and in the world.

Here is what Jin Liqun, chairman of China’s vast sovereign wealth fund, China Investment Corporation, had to say about Europe’s request to borrow some more from China:

The root cause of trouble is the overburdened welfare system, built up since the Second World War in Europe – the sloth- inducing, indolence-inducing labour laws.

In other words, no, we are not lending you bums any more money. China has its own problems, big time, but these are words of wisdom.