Tipping Points – When those Who Willingly Eat Garbage Make the Rest of Us Eat it Too

As regular readers know, I’m all in favor of market economies with only a slight bit of regulation – I think markets should be regulated just enough to prevent most negative externalities and fraud from occurring. But I found the following juxtaposition by the Skeptical Optimist to be quite (unintentionally) funny.

Here he tells us about his recent experience using Excel:

Sorry, I have to postpone the usual GDP and Employment analyses and charts. I am dead in the water, because of a formatting bug in MS Office Excel 2008 for Mac.

Apparently, Microsoft did not test their new 2008 software on Excel models saved in the Excel 2004 format prior to releasing their new version. I am now blind in all those analytical models until Microsoft fixes their goof and issues a software update.

His next post, put up the following day, is just this quote from Alan Greenspan:

There is no denying capitalism’s record. Market economies have succeeded over the centuries by thoroughly weeding out the inefficient and poorly equipped, and by granting rewards, to those who anticipate consumer demand and meet it with the most efficient use of labor and capital resources. Newer technologies increasingly drive this unforgiving capitalist process on a global scale. To the extent that governments “protect” portions of their populations from what they perceive as harsh competitive pressures, they achieve a lower overall material standard of living for their people.

Yes he did. He put up one post one day, and the other the next. So I’d like to comment a bit on that…

I’m not that old, but I’ve used VisiCalc (I was too young to use it for anything useful), Lotus, and for the past quite a while, I’ve been using Excel. Its the industry standard – there really isn’t much choice these days. Now Excel does have some nice features. But I use a version of Excel about a decade old. I may be forced to upgrade soon – people I work with have a later version, and people they work with have later versions still. The reason Microsoft gets rewarded for coming out with new versions of Excel that eventually get bought by the rest of us has nothing to do with anticipating consumer demand and meeting it efficiently. There isn’t any demand for bugs and failures.

The reason Microsoft get rewarded is that there are enough people out there who will buy new versions products that turn out to be infested with bugs despite the fact that all the old versions were also infested with bugs when they came out and for quite a while afterwards. Eventually, though, enough people who simply are incapable of learning have bought the new buggy product with its backward compatibility issues for a tipping point to be reached, at which point the rest of us have to buy it, bugs and all.

So why does it reach this point? Who are the early adapters of bugs and failures, these people who get pissed on time and time and again and keep coming back for more? Worse, those people who insist on dragging the rest of us over for the same treatment? They’re easy to identify – most of them are happy to tell you about how they get pissed on time and again and still come back for more, and they follow it up by telling you about how beautifully markets work. Oh yeah… and most of them consider themselves to be skeptical.