When Microsoft Was Forced to Join the Corporate State

Via Radley Balko.  He is quoting Tim Carney in turn

People think money drives politics. It doesn’t. Money is merely the vehicle. Power drives Washington. As Carney points out, Hatch has spent a good deal of his time on the Judiciary Committee targeting Microsoft. So he wasn’t mad that the company wasn’t giving him money—they weren’t giving to his opponents, either. Hatch was angry that the company wasn’t acknowledging that it needs Washington, that it needs people like him. He finds that offensive. So people like Hatch make companies like Google need people like Hatch.


 . . . it grated on Hatch and other senators that Gates didn’t want to want to play the Washington game. Former Microsoft employee Michael Kinsley, a liberal, wrote of Gates: “He didn’t want anything special from the government, except the freedom to build and sell software. If the government would leave him alone, he would leave the government alone.”

This was a mistake. One lobbyist fumed about Gates to author Gary Rivlin: “You look at a guy like Gates, who’s been arrogant and cheap and incredibly naive about politics. He genuinely believed that because he was creating jobs or whatever, that’d be enough.”

Gates was “cheap” because Microsoft spent only $2 million on lobbying in 1997, and its PAC contributed less than $50,000 during the 1996 election cycle.

“You can’t say, ‘We’re better than that,’ ” a Microsoft lobbyist told me on Friday. “At some point, you get too big, and you can’t just ignore Washington.”

You know what happens next . . .

After the Hatch hearings, Microsoft complied. Its PAC increased spending fivefold in each of the next two elections. In the 2010 elections, Microsoft’s PAC contributed $2.3 million to House and Senate candidates. The PAC has contributed the maximum $10,000 to each of Hatch’s last two campaigns.

Back before the antitrust case, Microsoft’s tiny lobbying contingent sat in the company’s local sales office in Chevy Chase. Since the Hatch hearings, Gates’ company has poured more than $100 million into K Street’s economy, hiring up members of congress and Capitol Hill staff, many of whom then became top fundraisers — such as Republican Jack Abramoff and Democrat Steve Elmendorf.

And of course now that Microsoft has a strong Washington presence, it uses its influence to lobby the government to harass its competitors. Like Google, which must then open its own Washington lobbying outfit in response. And the cycle starts all over again. (If you’re really on your game, you then hire the government regulators you’ve lobbied to investigate your rival to come work for you.)

Money is not the problem in politics, and is not the root of the corporate state.  Power is.  Money in politics will never go away as long as the government has the power to micromanage winners and losers.  Take the power away, and the money would disappear.


  1. Michael C.:

    With any luck my fellow Utahns will retire Orrin Hatch in today's primary election...

  2. Phil in Englewood:

    "Money is not the problem in politics, and is not the root of the corporate state. Power is. Money in politics will never go away as long as the government has the power to micromanage winners and losers. Take the power away, and the money would disappear."

    Exactly right. The *only* way to get control of the government is to reduce its power. It's going to take people like the Founders. Maybe the people will elect and listen to them after the current bunch has completely crashed the economy. Maybe...

  3. NL_:

    Warren Meyer quoting Radley Balko quoting Tim Carney quoting Michael Kinsley paraphrasing Bill Gates. Nice.

  4. me:

    Spot on. I've made that argument whenever I had a chance since the DOJ travesty (I was working at MSFT at the time, and the judgment made no sense technically and left a whole lot of the - admittedly overly naive - employee population quite surprised).

    You'd be amazed how frequently you get the "they are a monopoly... why? They were found to be a monopoly by the DOJ" even from technical people who ought to know way better.

  5. Harry:

    Today Cavuto had a great guy on -- wish I could remember his name, a smart Brit elder gentleman -- who got everything right about our present precarious economic situation. He predicted a depression in Europe since nobody works and the states demand riches be sent to the state, so the state will become rich, a program (my analysis) that has been going on before most of us have been alive.

    Just read the piece in the WSJ today about the Italian prime minister's plan for growth, an exercise in typical Italian fascist style. Get to that sixteenth employee and the full weight of the state descends. Yet we here in the US are not dissimilar. There is a big penalty for hiring that fiftieth employee, and it is not just about money and paperwork. If they do not like you, it may mean jail time.

    The problem is not about money infecting political speech. Rather, the insatiable state seeks to enrich its members, the peers, courtiers, knights, princes, stableboys, gamekeepers, woodcutters, masons, boatwrights, seamstresses, tutors, and miners for their pleasure and for the pleasure of the knights, masons, seamstresses, et cetera, who have state approval. Seamstresspersons. Unstressedseamlesspersons. Don't want to get arrested or sued for careless speech. Don't call any seamstress a coyote.

  6. me:

    The thing that worries me here is that folks are so absolutely on board with the idea of politicians as an all-powerful class that can extort at will.

  7. IGotBupkis, Legally Defined Cyberbully in All 57 States:

    >>> Take the power away, and the money would disappear.

    If we started shooting the bastards, I predict the demands for money and attention would disappear quite effectively.

  8. IGotBupkis, Faecies Evenio Mr. Holder?:

    >>>> You’d be amazed how frequently you get the “they are a monopoly..."

    They are, though, as usual, that's fading fast since they finally missed a turn on the road.

    Droid will soon own the OS market, and that's a little less of a single-source control -- Though Google technically owns Droid, it's based on Linux, so if Google starts screwing things up people can switch to Linux a heck of a lot easier than anyone could switch away from Windows.

    As far as any arguments that M$ did or didn't have a monopoly, it should be noted:

    1) If a company sells ANY intel-pc systems with Windows, it must pay M$ for a license for EVERY pc it sells, regardless of the fact that those systems may well be shipped with, say, only Linux on them. So any company that wants to offer an alternative to Windows gets no benefit from it. Gee, that's not going to discourage competition. :-S

    2) M$ literally PAID companies (via "price cuts on licensing fees") to NOT install Netscape on systems... that's the primary tool they used to kill Netscape -- user inertia and laziness. Not making a better browser, and winning out based on user preference (in actual fact, NS2, released a year or TWO before IE3, had significant features that IE3 lacked, including basic security features which were later shown to be major flaws). Even with an example showing them the direction to go, IE3 sucked balls. But the average bozo didn't know enough or have the expertise enough to know the primary use of IE on an IE-only machine: "To download a better browser."

    You could do NEITHER of the above if you did not have defacto monopoly status. M$ has a long and widely documented history of performing blatantly anti-competitive actions which do not work by being BETTER than their competition, but by using their hold on the market and/or their deep pockets to crush The Enemy regardless of quality.

    That's not suggesting I approve of the lawsuit, or even more particularly, the lame way it was resolved, which showed zero understanding of the computer/IT market. The best way to have dealt with it would have been to use government purchasing power to create an alternative market. By requiring that Federal offices be 25% "alternative OS" and that all software must readily exchange data, they would have created a clear market for an alternative to develop in, and which could have then become competitive with M$. Instead, we've had to wait for M$ to miss the boat a second time, with the smartphone-tablet convergence -- and the public has had to deal with another 10 years of Microsoft's ill-written garbage.