But in our modern politicized economy — which Jonathan Rauch dubs the “parasite economy” — no good deed goes unpunished. The federal government launched a Federal Trade Commission investigation, later compounded by a Justice Department investigation, of whether Microsoft has monopolized the software market. Microsoft capitulated, agreeing to restrictions on its contracting and pricing policies in order to avoid long and costly litigation. That wasn’t enough for the government, which went on to launch more antitrust investigations.
Whether Microsoft behaved monopolistically, however (the facts cast a lot of doubt on this claim), is less important than the way the government lured the software company into the political sector of the economy. For more than a decade the company went about its business, developing software, selling it to customers and innocently making money. Then in 1995, after repeated assaults by the Justice Department’s Antitrust Division, Microsoft broke down and started playing the Washington game — entirely defensively, it appears.
It hired 4 former members of Congress, 32 former congressional staffers or government officials and the former chairman of the Republican Party. It spent $1.9 million on lobbying in 1997, up 67 percent from 1996.
Of course, numbers like that still don’t make it a big political player. IBM spends more than $3 million a year on lobbying, and General Motors more than $5 million.
Indeed, Washington politicians and journalists have been sneering at Microsoft’s political innocence. A congressional aide says, “They don’t want to play the D.C. game, that’s clear, and they’ve gotten away with it so far. The problem is, in the long run they won’t be able to.” Journalists ask, what makes Microsoft think it can stick to its programming and stay out of politics? Politicians tell Bill Gates, “Nice little company ya got there. Shame if anything happened to it.”
And Microsoft gets the message: If you want to produce something in America, you’d better play the game. Contribute to politicians’ campaigns, hire their friends, go hat in hand to a congressional hearing and apologize for your success.