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|Originally Published: Friday, 31 March 2000||Author: Doug Vogt|
|Published to: featured_articles/Featured Articles||Page: 1/1 - [Printable]|
In the Long Run, We're All Dead
Just as many Linux users are stubborn cusses, so are investors. Our tax code mildly punishes short term arbitrage and similar temporal myopia. More than that, fund managers and individuals already brace themselves, knowing quite often that, yes, they have in fact put capital at risk.
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Even the famously "time insensitive" economist, John Maynard Keynes said that. His "ideology" was to get governments to spend in deficit in tough times and to "hoard" in surplus during good times so that the vagaries of the business cycle could be counteracted. In the long run, according to this theory, we're all better off. However, he even admitted where he might have goofed. In the long run, we're all dead.
Things have come and gone since my country (the USA) started trying a half-hearted application of his wisdom. It has been roughly 65 years. We are better off. More accurate tweaking has occurred with monatarism and Greenspan and so on, but the boom-bust mitigations are all still there in a vaguely Keynesian system (eg, few unemployment insurance disbursements during these good times tend to tilt the government toward hoarding).
How does this pertain?
All this talk of strategic alliances just might miss a point of capitalism in the epicenter of the Information Age, which, for better or for worse, is the USA. Just as many Linux users are stubborn cusses, so are investors. Our tax code mildly punishes short term arbitrage and similar temporal myopia. More than that, fund managers and individuals already brace themselves, knowing quite often that, yes, they have in fact put capital at risk.
Let's just say someone buys a chunk of Sun Microsystems. What do they really own? More than anything, they own the governing style of Scott McNealy that has an uncanny way of keeping brilliant people on the payroll longer than a pure free market would indicate. The same is true of Microsoft.
I think Joseph Schumpeter's echoing, ghost-like, sarcastic laughter would be an appropriate background noise to all our speculation and deduction of the innards of noggins of Scott McNealy, Steve Ballmer, and Louis Gerstner. Whatever Sun Microsystems, Microsoft, and IBM do, over time, there will always be geeks in the garage to irritate any sense of comfort they might derive from their fortunes.
As we all know, the pace is increasing. In our analysis, this laughter is not the entire focus of what is relevant, but it helps. I think we should consider more than jealousy and envy in marketshare and in "standards wars." We should consider something that Louis Gerstner said on the financial news channel on TV.
Please do not treat this as a direct quote because it is only from my memory, but it went something like this:
"Our customers are telling us over and over again that they are sick and tired of new gizmos. For almost twenty years, they have been promised that everything will work with everything else [according to standards], and everything will be made easy. It's not easy. It's hard. The customers are sick of it. What they are telling us is this: 'We don't want more gizmos. We want answers!'"
That is interesting for people who watch financial news on TV. It is even more interesting to people who tinker on our own or in informal aggregations "without capital." Think about it. Those billions of dollars are like billions of monkeys on the back of Louis Gerstner. What is to prevent me from becoming a guru in MySQL and in secure tactics of HTML, deploying minivend, and thereby undercutting IBM IN ITS OWN TURF?
Oddly, assuming that I wanted to serve this trendy hoola hoop e-market, I would have a leg up over IBM for the simple reason that capitalism is bang per buck. Without much wealth, that ratio looks better for me than for Louis Gerstner.
What a pain! That is, from his view, what a pain it is to be wealthy or to manage immense wealth in information systems.
Look at the hype from Microsoft on the tube lately. It is about the same as what Louis Gerstner said to the financial news TV reporter. "We at Microsoft can help you sort out all the confusing stuff about using the Internet in your shop." (That is not a direct quote either.) Both of those vendors are jealous of Sun Microsystems. Sun has locked up a big chunk of the turnkey WWW product/service setup for wealthy enterprises.
However, let us once again recognize that background laughter.
All three of them look silly. In my subjective experience, a company who looks even more silly is Gateway of cowspots fame. What good is a bunch of buildings in South Dakota with a conveyer with partly built PC's on it? Nobody needs an economy of scale to crank out a truly built-to-order beige box.
They are all stuck in a bind. They are stuck in a bind because shareholders expect them to function like capitalists even though it is precisely the immesity of that wealth that clogs up their efforts, given that the customers are as angry as Gerstner said. Try to open up a Wrigley's gum stick with mittens on. Then try to serve this market where it really wants to blow its money: making the gizmos work no matter how many promised magic "MHz" are in the bulleted list.
What troubles these giants is their irrelevancy.
It is a very wacky world. I "admit" that. It is as if Karl Marx wins. The rich do not have a leg up. That is because the desire in the marketplace is to get attention, not gizmos. Attention is a matter of the gal or guy onsite doing what the customer wants done. That puts the value of the turnkey deployment of information technology into a circumstance where the principal determinant of price is what the knowledgeable service person feels like asking and the quantity and quality of such service people to aid in the most objective determination of that price. In other words, the price of labor makes the difference, and the quantity of capital is almost irrelevant.
Now recall what I said in "praise" of Scott McNealy and of (originally) Bill Gates and of Louis Gerstner to a somewhat lesser extent. They suffer minimal turnover among their brightest people. That is the market hedge. Nobody wants to admit it to the borderline reactionary crowd on Wall Street, but capital and labor are one in the same.
For all we know, the earth shattering player of the coming years will be HP, making all the other GUYS seem as irrelevant as DEC and the creators of Wordstar.
The female CEO does her own TV ads. Just get the bureaucracy out of the way, and invent. Watch.
You're darned right, I'll watch. If HP conquers the world (possibly with the help of OSS phenomena, possibly not) then we will see that the overblown macho egos of "three guys" are nothing. The capital is the relationship.
The network is the computer, says Sun. Doesn't it naturally follow that the enterpise is the relationships? I would argue that it takes a woman to see this economic forest among the aggrandized egos of the corner office trees. That would be a farce. I'm a guy.
My magic mind reading deductions tell me that the three, Sun, Microsoft, and IBM, know that they are really just bootlicks of their own geeks, which constitute the capital. They are scared to death of the top-heavy monstrosities they "control". It is a mortal fear.
In the long run, we're all dead.
Doug Vogt, aka firstname.lastname@example.org, aka email@example.com. Copyright (C) 2000. All rights reserved.
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