Microsoft and the Protection Racket: Rothbard Was Right

Austrian economist Murray Rothbard famously described government as a large and successful criminal gang, arguing that it relies on coercion and violence to achieve its ends. The Microsoft antitrust case of the late 1990s illustrates this concept, as the government used its power to target a successful private company for alleged anticompetitive practices. By threatening legal action and imposing restrictions on Microsoft’s business operations, the government effectively organized a shakedown of the tech giant.

The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

He spoke with a very thick Sicilian accent. “Ah, young fellow,” he said to Vito. “People tell me you’re rich. You and your two friends. But don’t you think you’ve treated me a little shabbily? After all, this is my neighborhood and you should let me wet my beak.” — The Godfather, Don Fanucci tries to shake down Vito Corleone

In the mid-1990s, Microsoft stood atop the hi-tech world and its founder and chairman, Bill Gates, had guru status among his fellow Americans. Microsoft had recently come out with its own Windows program, allowing it to compete with Apple Computer’s system and giving his company a huge advantage in the cutthroat world of technology. Gates was interested in furthering Microsoft’s fortunes, not its political ones. Michael Kinsley writes: