Monday, February 4, 2013

RMS on too-big-to-fail-companies

Richard Stallman (RMS) is famous for the free software movement.

He is not a fan of Microsoft (neither am I, and its due to the absurdly large market share that they can abuse). RMS doesn't like Microsoft because they don't release the source code for the software.

So why is RMS saying anything about "too-big-to-fail" companies?

Because Microsoft is considered too big to fail.

Seriously. Too big to fail. Microsoft is a multi-billion dollar company (6.4 billion in its second quarter) and has massive amounts of money lying around. They have 97,106 employees worldwide. Lets do some quick math.

Lets assume that each employee costs Microsoft $250,000 a year (paychecks, taxes, benefits, etc.). And lets round up their employees to 100,000.
So:
250,000 * 100,000 = $25,000,000,000
That is $25 billion a year. But they made 6.4 billion in a quarter. That is after they pay everyone though.
They made $74,000,000,000 ($74 billion) last year.

They really are too big too fail. They bring in too much money too fail. Because they have a monopoly.


It is a monopoly because the cost of switching is very high.
From Windows to Mac: $600 (minimum), $220 (minimum + software)
From Windows to Linux: $0 (minimum), $15 (minimum + software)

Basic Software: Mac Linux
MS Office:          $220 Not available
Crossover:         $15   $15     (can remove MS Office cost and run other non-native programs)

Are you willing to spend time and money switching?
Probably not (95% of all people using technology cannot install an operating system, which Linux requires and 80% are not willing to spend more than the bare minimum for a new computer. Estimated numbers)


Anyway, RMS wants to have a tax (progressive) on the gross profits of companies, before expenses are taken out.

Now don't take what I say wrongly, I do appreciate what RMS has done for me, but I am against progressive taxes of all sorts. I do agree that no company should be too big to fail, but a progressive tax is the wrong way to do it. I, after all, use Linux all the time (and have a Windows honeypot for thieves).

I have an alternative, full of holes, but an alternative nevertheless.

It pretty much comes down to this:
If a company controls more than 75% of a market, and the cost of switching (with replacement add-on products) is more than twice the cost of the product, then the company should be broken up. Period. No exceptions, not even settlements should change this.

A settlement is basically an admission of guilt (most of the time, there are exceptions, see the recent spat of porn trolling cases).

Examples: Microsoft Windows -- cost is $400 for a new, cheap computer. You can use old software (addons) on it (e.g., that $400 MS Office 2007 suite). Switching to Mac is $600 for the cheapest Mac plus $200 for MS Office (Mac edition).  That comes out too $800 for Mac, $400 for Windows. Not including other software. Then there is Linux (cost is $0), but what is this thing you call MS Office? (There is no version available for Linux, trust me.) Most software vendors make you purchase a different version for Mac or Linux. There are exceptions (usually downloaded software such as the Humble Indie Bundles).

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TL;DR

RMS wants a progressive tax on all businesses, based off of gross profits.

I disagree and would prefer to see a flat tax/sales tax instead, along with stricter monopoly laws.


Examples of Monopolies affected:
Google (Android. But its built on open-source software, which can be forked into a competing product, and thus it would be difficult use its monopolistic position to abuse the consumer).
Microsoft (Windows, which cannot be forked)
Most Electricity companies (Very difficult to get a different provider)
ISPs (some areas only have one (1) ISP available)