Robert Reich on Technology

Former Secretary of Labor; Democratic Challenger MA Governor


Consumers benefit from standards; but not Microsoft monopoly

Microsoft owns the basic operating software going into almost all computers--Windows. In 1998, the Justice Department sued Microsoft for monopolization. Microsoft objected. Surely, it argued, a single operating software standard is easier on consumers than many different incompatible standards.

The problem was that Microsoft's Windows had become so ubiquitous that buyers and sellers of computers, browsers, and other software had little choice but to license it from Microsoft if they wanted to connect with everything else. This gave Microsoft power to effectively block new products using a different operating system. Arguable, it also gave Microsoft power to deter innovation by rivals. So ruled a federal judge.

What begins as a convenient standard can end up as a barrier to innovation. The trade-off: common standards were needed. But rather than one company setting them, the standards were set by emerging industries as a whole, and made freely available to all comers.

Source: The Future of Success, by Robert Reich, p. 46-48 , Jan 8, 2002

Tech is great for consumers but hard on our personal lives

Never before in human history have so many had access to so much so easily. Technology is the motor. Technologies are radically sharpening competition among sellers, which in turn is provoking a staggering wave of innovation.

Economically, this is to our great and unequivocal benefit. But what it means for the rest of our lives--the parts that depend on firm relationships, continuity, and stability--is acutely problematic.

The easier it is for us as BUYERS to switch to something better, the harder we as SELLERS have to scramble in order to keep every customer, get every contract. As a result, our lives are more and more frenzied.

The faster the economy CHANGES--with new innovations and opportunities engendering faster switches by customers and investors in response--the harder it is for people to be confident of what any of us will earn next year or even next month, what they will be doing, where they will be doing it. As a result, our lives are less predictable.

Source: The Future of Success, by Robert Reich, p. 7 , Jan 9, 2001

Age of the Terrific Deal is replacing Age of Mass Production

Motivated by a mixture of curiosity and greed, Western capitalism grew and spread: The Age of Exploration, the Age of Imperialism, the Industrial Revolution, the Age of Mass Production.

The world is in the middle of another great opening: the Age of the Terrific Deal. It started in America several decades ago and has been gathering momentum ever since. It's about to accelerate very sharply. It's based on technology and imagination. Combine the Internet, wireless satellites, and fiber optics, great leaps in computing power, a quantum expansion of broadband connection, a map of the human genome and tools to select & combine genes and even molecules--and you've got a giant, real-time, global bazaar of almost infinite choice & possibility.

Finding and switching to something better is easier today than at any other time in the history of humanity, and in a few years, will be easier still. We're on the way to getting exactly what we want constantly, from anywhere, at the best value for our money.

Source: The Future of Success, by Robert Reich, p. 15 , Jan 9, 2001

Microsoft has duty to citizens as well as to shareholders

I’m a shareholder of Microsoft. Not a big one, mind you, but the money Microsoft has been spending lately lobbying has been spent on my behalf. But I’m also a US citizen, and I have goals other than maximizing the value of my stock.

I think it’s a good thing that we have a Justice Department, and that antitrust laws are enforced against powerful companies. I don’t want to live in a country dominated by the interests of big companies, even the ones I own. In short, I don’t want Microsoft to maximize the value of my shares at the expense of my values as a citizen. When I bought my tiny piece of the company, I wasn’t saying, “Take my money and do whatever’s politically necessary to give me a big return on it.” I was only asking the company to do whatever was technologically and economically necessary to give me a big return.

Microsoft’s political tactics are making an eloquent case that it and other corporate behemoths should be either more directly accountable to the public or busted up.

Source: The New York Times, Op-Ed, “A Shareholder, and a Citizen” , Nov 5, 2000

Globalization and computerization widen the wage gap

For more than 15 years, people in the bottom half of the earnings distribution have lost ground. The middle class has been squeezed. The very poor have become even poorer. The wage gap is widening. Most of this is due to two great changes that started in the late 1970s-the emergence of new technologies like computers, and the knitting together of all the world’s economies. Both have been boons to well-educated professionals, but have created disasters for poorly-educated workers, who can now easily be replaced.

The same transformation has undermined the implicit social contract that once existed between companies and their employees, such that when the company did better, its workers did too. Technology and global competition have allowed investors to move capital quickly to wherever it earns the most.

The main answer is to improve education and job skills. The other part of the answer is to renew the compact between companies and their workers. Encourage profit-sharing. Strengthen unions.

Source: Locked in the Cabinet, p. 12-13 , Nov 15, 1992

Interstates, built for defense, had positive side effects

In the 1950s, the legislation launching a new national highway system--40,000 miles of straight 4-lane freeways to replace the old 2-lane federal roads that meandered through cities and towns--was called the National Defense Highway Act, and justified in the halls of Congress as a means of speeding munitions across the nation in the event of war. The manifestly real possibility of other consequences, good and bad--that it might also generate sprawling suburbs and shopping malls, harm downtown retailers, fatten the construction industry, boost auto sales, create an entire trucking industry, displace barges and railroads, and radically lower the cost of transporting and distributing goods across America--was not openly discussed.
Source: The Work of Nations, by Robert Reich, p. 61-62 , Feb 4, 1992

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