Soundings, December 1998

The Kennedy administration has often been compared to a royal court. Now we know that it had at least this resemblance: the country's great manufacturers courted on the queen's favor to protect themselves from the depredations of irrational laws. "At the heart of [IBM's] 360 project, Watson, his legal advisors, and the ruling junta at the corporation, came up with another scheme they thought would give them a marketplace lead for the long term. . . .[T]hough antitrust issues were still a concern, John F. Kennedy had just been elected president, and because the new First Lady was a longtime family friend, Watson was confident he could fend off legal scrutiny." Jeffrey Young, Forbes® Greatest Technology Stories, p. 55.

In the July/August 1998 issue of Navigator, "Soundings" mentioned the perceptiveness of Reason editor and Forbes columnist Virginia Postrel. What particularly impressed us was her warning that technology alone will not turn back statism; ideas will be needed. She noted that, however liberating e-mail might be to people and companies, it could just as well be used against freedom, for example in cases of "economic crime" that hinge on intent. Antitrust was a field she particularly mentioned.

Now comes this story from page one of the New York Times (November 11, 1998). "[The lesson that] corporate America is taking away from the Microsoft antitrust case is that old E-mail can be a mine field of legal liability. . . . In the high-profile court battle. . . , E-mail has emerged as the star witness—a fact that appears to be giving pause to executives accustomed to clicking 'send' without a second thought.

"'I love E-mail,' said Jeff Bezos, Amazon's founder and chief executive. 'I think it is changing the world. The problem is somebody can take it out of context and use it against you.'"

According to Richard Pipes, Harvard professor emeritus and author of The Unknown Lenin among many other works on Russia and the Soviet Union, revisionists in the field of Soviet history now "'monopolize jobs to a very large extent and make it very hard for anyone who holds a different point of view to get a job. [Vladimir Brovkin] is a very good example. . . . They claim that he's too passionately anti-Communist and demonizes the Soviet regime.'" Adds Pipes: "'I've never seen a respectable historian criticize a German scholar for demonizing Hitler or being too anti-Nazi.'" Washington Times (National Weekly Edition), October 19-25, 1998.

New York's attorney general, Dennis Vacco, whose office heads up the states' suit against Microsoft, has demonstrated that his anti-capitalism is not reserved for superstars. According to the New York Times (October 29, 1998): "Unlike most states, which permit consenting adults to buy tickets the same way they buy anything else, New York prohibits brokers from charging more than 10 percent above a ticket's face value." Previous New York attorneys general have pursued scalpers in "crusades" that resulted in fines, but Vacco recently sought and won two felony convictions, with possible four-year jail terms. For an added twist, however, the crime he alleged was not charging more than a 10 percent markup; it was failing to pay sales tax on that markup—"a crime no one knew existed," says the Times, since sales taxes were never collected on mark-ups under 10 percent. (It was considered a service charge.) Inasmuch as the state assembly has been considering imposing taxes on mark-ups, one assemblyman wrote that "Frankly, I was amazed to learn of [the brokers'] conviction of an offense which has not yet been enacted into law."

The good news is that Vacco was apparently defeated in the recent election.

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