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Source link: http://archive.mises.org/13469/the-sociopaths-win-again/

The Sociopaths Win Again

August 3, 2010 by

And now for our “Narcissistic State Announcement of the Week“:

Federal Trade Commission Chairman Jon Leibowitz will be joined by Bureau of Competition Director Richard Feinstein at FTC Headquarters on Wednesday, August 4, 2010, at 10:00 a.m. ET to detail the terms of the Commission’s order settling charges that Intel Corporation used anticompetitive tactics that stifled innovation and harmed consumers in the market for computer microprocessors, graphics processing units, and chipsets. The FTC’s complaint, filed in December 2009, charged Intel with waging a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace, and harming consumers.

So if I understand this correctly, two men who have devoted their lives to aggressing against innocent people will stand before a (worshipful) Washington press corps and explain why a company that has produced useful and innovative products for over forty years has “harmed consumers.” Moreover, the aggressors will explain how their violent behavior will produce superior products versus the peaceful coordination of the marketplace. And to top it off, the aggressors will explain why they and they alone possess a superior understanding of the marketplace—not Intel or its customers—that eliminates the need for any outside check on their violent behavior. Please tell me if I am missing something here.

UPDATE: George Mason University Professor Joshua Wright deems it “somewhat odd” for the FTC to call a press conference to discuss a consent order. Odd, perhaps, but not surprising. Jon Leibowitz has done a good job since taking over as chairman of raising his personal public profile. As I have said before, Leibowitz won the bureaucratic lottery. He spent most of his career as a “compliant aide and fawning courtier” to Senate Democratic leaders—to borrow the words of Leibowitz’s wife—and now he is in a position where every American company must bow before him. Heck, in that position I might call a press conference and take a curtain call myself.

But to address a more important question—why did Intel give up without a fight—I suspect the company sealed its fate last year when it hired A. Doglas Melamed as general counsel. I initially thought this was a good sign. Melamed successfully represented Rambus in defeating the FTC over the course of seven years of litigation. But that was when Melamed was outside counsel. Rambus had a strong general counsel, John Danforth, who oversaw the company’s overall litigation strategy—and he was not a career antitrust lawyer beholden to the FTC. Melamed is a career antitrust guy who spent five years at the DOJ’s Antitrust Division—even serving as acting chief—during the height of the Microsoft litigation. It was unreasonable to expect such a man to wage a principled campaign against the FTC. Intel should have known better.

{ 19 comments }

(8?» August 3, 2010 at 5:44 pm

It’s really not “winning” if they have to put a gun to our heads. Quite simple, it’s merely coercive violence.

Of course, when enough of the sheeple think that criminals are protecting them from “evil” entrepreneurs, I can see how it appears that reason is losing.

(8?» August 3, 2010 at 5:46 pm

Sometimes, I really miss the preview function.

It was my friend.

S.M. Oliva August 3, 2010 at 5:54 pm

Normally i would agree. But Intel had the resources to fight—not just in litigation, but publicly and politically.

geoih August 4, 2010 at 6:47 am

Yes, aggression is always justified when the aggressee can defend themselves. It’s their own fault for not fighting back.

I do love that one term: “consent order”. The modern day version of the torture induced ‘confession’.

S.M. Oliva August 4, 2010 at 7:16 am

Thank you for the comment. Aggression is never justified. But Intel had a choice to fight back. Instead, they hired a career antitrust lawyer as its general counsel, a man with every incentive to capitulate in the face of aggression. Intel is not responsible for the aggression, but it is responsible for its own poor decision making that facilitated the aggression.

geoih August 4, 2010 at 1:43 pm

It serves them right. Maybe we could call this the Sudetenland defense.

Robert August 3, 2010 at 6:01 pm

Should’ve bought some AMD stock…
On one hand, it is true that Intel has some crafty deals with suppliers and PC makers (and threatens to revoke special pricing from certain PC makers for wanting to use other chips).

On the other hand, Intel was making poor products for a few years (Pentium 4) and then was losing out to AMD’s superior technology. AMD gained market share but Intel responded with making better products. And now Intel has good products again. So market forces win, until someone doesn’t want to compete anymore because it’s too hard.

J. Murray August 3, 2010 at 6:18 pm

And the FTC has to resort to outright lies and fabrication as well. Intel hasn’t had any sort of stranglehold on the graphical processing unit (GPU) market. The GPU was pioneered by Nvidia and, currently, the GPU is dominated by them and AMD. Intel GPUs are so bad even casual computer buyers quit purchasing them years ago. Just take a walk through a Best Buy one of these days and try to find an Intel GPU in any computer system.

On the other end of the spectrum, if AMD could make a decent high-end processor, I’d buy one. As it stands, they can’t produce anything beyond the low-power $100 range. Intel isn’t destroying the market by some insidious force, they earned their market share by putting out a product (both consumer and enterprise) that no one can touch. All the other “complaints” are standard business fare. Bulk discounts, preferred customers, etc. What’s the FTC going to do next, wage war against weekly coupon books? That’s the “evil” business practice Intel engaged in, corporate coupon clipping.

Ohhh Henry August 3, 2010 at 8:51 pm

If any company was a stupendous success at selling/distributing coupon books and saving consumers millions of dollars while building their business, or creating preferred customer clubs, the FTC would slap them down them faster than you could say “anti competitive”.

It isn’t business practices that they hate, it’s success. Or to be more precise, they don’t give a crap about any business practice or whether it is successful or not. Because the general public is often envious of success, it gives them the political leverage they need to conduct a particular form of banditry. It is the same line of work as Robin Hood except instead of sleeping rough in Sherwood Forest these Merry Men live in large, comfortable homes in the suburbs of Washington DC.

pussum207 August 3, 2010 at 8:55 pm

Intel needs to move to Singapore/Hong Kong.

Ayn Rand’s words seem appropriate:

“[Government] does not need need to nationalize [the businessman's] property: they nationalized his mind long ago.”

Sigh.

William Bartholomew August 3, 2010 at 10:26 pm

The answer is quite simple. Government hates free will. From the government’s perspective, there can be no progress unless they control it. Anyone violating that rule are plunderers of the people.

Guard August 4, 2010 at 12:11 am

In fact, government hates free anything. Enough laws, rules, regulations, and controls and human beings are no longer needed: machines could do the same as people. Since everything is planned cradle to grave, no decision making (freedom) is required of anyone.

Seattle August 4, 2010 at 1:14 am

Not true: The planners are just fine with their own self-determination.

Mud August 4, 2010 at 5:45 am

Heavily into projection?

The utility and innovation of the IAPX432 aside, what justifies anticompetitive abuse of a dominant position in the market to mislead the public as to the benefits of honestly useful and independently innovative technologies and the attempt to deprive the public from benefiting from them by admittedly underhanded tactics that if admitted to are de facto unlawful?

You’re probably posting from a computer incorporating technologies of AMD’s devising that were necessarily adopted by Intel to regain a competitive stature in the market that they very nearly lost forever during their campaign of any number of abuses that they’re now having to disavow. The sociopaths have lost in this case and you’re crying. Your world where there is no public interest and nothing should stand in the way of your personal aggrandizement and enrichment seems like a terrible place. I’m glad we don’t live there.

Matt Wing August 4, 2010 at 7:58 am

“Your world where there is no public interest and nothing should stand in the way of your personal aggrandizement and enrichment seems like a terrible place.”

You’re confused. What’s best for public interest is the pursuit of personal enrichment.

Jim August 4, 2010 at 8:35 pm

I agree. The public intrest cannot be best served by the micromanageing of society.

Chris August 11, 2010 at 12:57 pm

“You’re probably posting from a computer incorporating technologies of AMD’s devising that were necessarily adopted by Intel to regain a competitive stature in the market that they very nearly lost forever during their campaign of any number of abuses that they’re now having to disavow.”

What, you mean the AMD64 extensions? Technically, Intel had a 64-bit chip before AMD, but it wasn’t compatible with x86 and it was locked into the expensive Itanium architecture, where all software for it had to be re-written against it.

Keep in mind that AMD got started into the PC business because Intel licensed its 8086 and 8088 architecture to them. True, AMD does serve a purpose in keeping Intel competitive, but Intel has contributed far more to the computer industry, such as the USB and PCI buses to advancing the x86 architecture from the 4044 to the i686. AMD, on the other hand, seems more intent on suing Intel whenever they can’t handle their fab problems (such as the issues that occurred with producing their 65nm chips and the Phenom microcode error).

David August 4, 2010 at 2:29 pm

Please offer a coherent definition of “anticompetitive behavior” that can be applied to all actors in the economy in a neutral and principled fashion.

If you cannot do so, then please accept that the Rule of Law no longer applies in America. This is not about a particular business engaging in a particular business practice. Anti-trust law is inherently unprincipled, which means it is subject to political considerations (or as you say, “the public interest”).

Under such a state of affairs, businesses must maintain large cadres of lobbyists to satisfy the regulatory agencies that their actions conform to the “public interest.” The agencies can exact a fee from businesses that seek to engage in any action that requires their approval, using the “consent decree.”

I will gladly concede the point, as soon as you explain to me what precisely are the legal elements that comprise “anticompetitive behavior.” And please offer elements that do not capture all sorts of business behavior that goes unpunished and uninvestigated.

Hesbon September 9, 2010 at 10:28 am

I totally agree with you and thanks a lot

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