Not Too Big to Fail?
Failure is never so much what others take from us as it is the result of our failing ourselves. Recently, the AMC cable channel started airing a series called “Halt and Catch Fire” about the heady days of PC clone computers in the 1980s. This is a remarkable and instructive (and therefore forgotten) story about how the action of the free market confounds the common (leftist) wisdom about how economics works.
Shortly after IBM announced its pending introduction of the OS2 operating system for its PC computer in the mid-1980s, I met a man who worked for “Big Blue” and he told me that IBM was going to continue to dominate the PC market because it is big (a kind of precursor of “too big to fail”) and people would buy OS2 just because it was IBM that produced it.
Gates again remembered his ethics and—realizing that someone could use Microsoft DOS to operate a PC clone—offered to sell the exclusive rights for the operating system to IBM. But IBM did not see why they needed to do that. The software only worked in a PC, and IBM made the only PCs. They were Big Blue after all. They were the five-hundred-pound gorilla, right?