Just listened to Chelsea Clinton on BBC world service

[avxo]

Uh, what?

You read what I said. Microsoft used to completely own many segments of the markets. We're talking 99% market penetration. Nobody thought they could be beaten, and everybody believed that even if they ever felt threatened, they'd either buy the competitor out or out-develop them by throwing a thousand developers at the problem.

But despite their dominance, they're being challenged and pushed back basically across the board:

On the O/S front while they are still fairly the big man Linux has made tremendous inroads and now dominates the server operating system market, Apple has an increasing share of the O/S market (and, some would argue, a technically superior O/S).

On the office suit front they are facing competition from OpenOffice on Windows, LibreOffice on Linux (where they don't compete) and Apple's suite on OSX. Even Google Docs is giving them a run for their money on the desktop, and it's a web-based cloud-hosted suite. Of course, Google Docs completely demolishes Office 365 when it comes to cloud-based offerings.

On the database front, they are facing a ridiculous amount of competition by Oracle (as Oracle and as mySQL), and a host of open-source databases, including upstart MariaDB.

On the browser market, IE, which used to utterly dominate the market, is being destroyed by Chrome, Firefox and Safari, and to a lesser extent Opera.

On the cloud services front - both storage and compute - they are vastly outmatched by Amazon and Linux. The Azure offerings don't even compete.

On the virtualization front they are playing catchup to VMWare (aka EMC) and their Hyper-V offerings still don't compete favorably.

On the mobile O/S front they are being completely destroyed by Apple and Google and despite pouring billions of dollars of money to develop and market Windows Mobile and to lure developers, they are getting no traction (except the traction they bought in Nokia Oyj).

That's not to say that they're done for. Far from it. They're fighting and fighting back hard. But the aura of invincibility they had is gone and everyone is smelling blood.

[cephissus]

Interesting choice of words, I guess...

"Linux staged a revolt".  Unix-like systems long predate MS, and have always been widely used on servers and in development environments.

"Apple ... still relatively small" maybe if you're talking exclusively about OS marketshare (and even then, probably not?).  Apple is a "bigger" company than MS in almost every way, though.

[avxo]

Interesting choice of words, I guess...

There was a reason... let me explain.

"Linux staged a revolt".  Unix-like systems long predate MS, and have always been widely used on servers and in development environments.

It did. Nobody expected Linux to gain any market share against things like HP/UX, OSF/1, IRIX, Solaris and the BSDs. It was the poor man's Unix. And yet, it came to dominate, and it did so at a time when Microsoft was making huge inroads in the server market with the first version of Windows for server workloads: Windows NT 4.

Add to this the fact that Linux now runs on more devices that Microsoft if you consider phones and tablets, alongside PCs... I'd say that qualifies as a revolt.

"Apple ... still relatively small" maybe if you're talking exclusively about OS marketshare (and even then, probably not?).  Apple is a "bigger" company than MS in almost every way, though.

Of course I was, and I think it was pretty clear.

[cephissus]

Just seemed a bit of a non-sequitur, I guess...  MS' bread-and-butter is a personal PC OS.  In this field, Linux poses practically no competition, and Apple is far more well-known for their hardware and mobile OS, these days.

[avxo]

Just seemed a bit of a non-sequitur, I guess...  MS' bread-and-butter is a personal PC OS.  In this field, Linux poses practically no competition, and Apple is far more well-known for their hardware and mobile OS, these days.

Actually, their bread and butter is Office; that's their cash-cow. Windows is just an incidental, these days.

[Ronnie Rep]

She will be President one day.  Zero doubt about it. 

First Hillary!

[Big Chiro Flex]

X2, what avxo said.

I'll punch you square in the jaw.

[syntaxmachine]

I think that basing things on events that took place 150 years ago, during the wildcat banking years isn't a good idea. Does it give us a data point? Sure. Did the experiment fail? Sure, but I would add it many mistakes were made. In addition, I would submit that a lot of other issues arose that could not be effectively addressed back then that could be now. I think that the rise of private currencies (whether they are against specie is largely irrelevant) is inevitable.

These are all reasonable claims about the Free Banking Era, probably correct ones.

Still, if we don't put theory to data by basing our claims on empirical events, just what methodology should we use? Pure theory? Even on that front, I cannot find any of the sorts of complicated models developed by economists that even tentatively suggest that it's possible to obviate the need for state managed currencies -- at best, I see models indicating that private money can coexist. What then is left?

All that remains, as best as I can tell, are two methodologies: (i) believing claims that meet certain aesthetic considerations (nobody decides things on a purely rational basis), and/or (ii) neckbeardianism's favorite move, which is to say that 'Our Lord and Savior Ron Paul/von Mises/etc. says so, and so it is so.' And neither of these is acceptable, of course.

I am not convinced that such a bank or institution would arise in the absence of the existing framework and the regulations currently in place, which make it practically impossible to start a new bank and compete with the established ones.

Moreover, I think that the public would want to prevent such an institution from forming out of rational self-interest, and if it did, it could (and would) to swiftly reduce its size and importance (without resorting to legislative means) again out of rational self-interest.

Our stances on this issue may boil down to our opinions on behavioral finance, which tends to incorporate well-known cognitive distortions that make humans vastly less than fully rational agents into models of market behavior.

I am of the opinion that if it's really true that markets are simply aggregates of individuals' behavior, and said individuals are sub-optimally rational, then said markets will also exhibit sub-optimal rationality. And from that I would say it isn't reasonable to infer policy prescriptions on the basis of what fully rational agents/markets would do.

I guess it would depend on what we define as "essential banking services" but I don't see any inherent "unworkable" issues in a system where currency is privately issued by all member banks as a consortium and each member bank accepts the note at face value is workable. Since banks have an interest in providing a stable and widely circulating currency (especially if the currency is issued against specie), so it's rational that they would try to ensure those properties.

I even think a multi-currency system could work (especially in this day and age - it was impractical back in the Free Banking Era) but it would be a bit trickier to coordinate and perhaps even slightly confusing. So the single currency system issued by a consortium of banks seems like a more practical setup to me.

This is all very interesting, and we should encourage countries (I'd say others, so that they can be the experiment rather than us) to adopt such models and encourage economists to work harder to produce meaningful theoretical work that might guide policy. That said, I don't think the current state of knowledge supports the adoption of such systems, as I indicate above.