Group 1: Sitora Israilova Daryna Stalnenko Ngo Pham Minh Nhut Ghali Sebti

THE CASE OF BILL GATES AND WARREN BUFFETT ANTITRUST TRIAL 2000
INTRODUCTION
The case is about two of the most influential billionaires in current world: Bill Gates and Warren Buffett and the arising question is whether the way American capitalism allows them to reach such huge properties ethical or not. First, after dropping his education, Bill Gates has developed Microsoft into a multibillion company which dominated computer software market. There are ethical critics from Marxist and non-Marxist point of view about how Microsoft payment and competing policies, which makes Microsoft a big-bad-giant focusing on making profits. Then, there is Warren Buffett, another billionaire. He is one of the greatest investors by purchasing companies, whose fortune amounts of 62 billion dollars. Despite critics on ethical issues, these two billionaires contribute a huge amount of money for charitable activities and funds, helping poor people all over the world. Will this generosity compensate for their claimed unethical issues?

INVOLVED STAKEHOLDERS
The stakeholders involved in this case range from the billionaires, Bill Gates and Warren Buffett, to the government, whose responsibility is to have control mechanisms over those giants. Specifically, as stated in the case, in order to achieve such high-end positions in the market, large corporations try to impose their power throughout the battle field, which in turns become monopolistic power. This monopoly forces other competitors to withdraw from the game while binding the customers to their products, both directly and indirectly. The shareholders of the companies are also involved since the decisions of the companies are to maximize profits, which benefit the shareholders. Another party involved in the case is the charitable funds and organizations. They receive millions from these millionaires to help poor people all over the world from poverty and diseases. It benefits both parties since the billionaires also get good credits for conducting such ethical activities.

AN ETHICAL NORM
Aside from other ethical issues which will be discussed, one of issues falls more into the category of norm fairness. Obviously, our guts feelings tell us to treat everyone equally and fairly by giving them the same rights, the same status, the same positions and not taking advantage of any entity. However, in American capitalism, there are conflicts among social classes. The rich are getting richer while the poor are getting poorer, which in turn gives the rich dominating power over the poor and turn the relationship into so-called master-slave relationship. However, this capitalism also gives its people maximum freedom and opportunities to achieve wealth and every person plays an important role in this system, which could not excluded by any means. Therefore, the rationale behind this norm is rather strong in comparison to its critics.

NON-MARXIST CRITIQUE
There are three non- Marxist critiques. Firstly, according to the chapter, American capitalism is wasteful and it can be seen differently. The second part of this critique is to do with products that are not vital in our lives. The third part is about how the defenders of free economy believe that no one can decide whether the product is useful or not, or how people should spend their money. Secondly, some believe that governments support industries that make war materials through tax. Some think that without the war the system will not survive, because it needs the destruction and the rebuilding periodically. And others say that the military-industrial complex is the one that controls the government and took the power from the people. However, there are a few factors that can defend capitalism from these critiques. The third and the most related critique against capitalism is that it creates unfair inequalities. According to the book, the inequality is large between the poor and the rich in the United States. And that small percentage of the rich is the one that controls a big percentage of nations wealth. This critique is directly related to the Case Study of Bill Gates and Warren Buffett. As they are in the rich category of the society, people find it unfair that they find means to avoid tax through charitable and aid funds and various charitable organizations.

DEFENSE OF THE AMERICAN SYSTEM

The defense of the American free enterprise system mainly puts their focus on freedom and efficiency, production of wealth and distribution of wealth, and how preferable socialist societies are. The defense believes that American free enterprise system puts emphasis on the significance and value of freedom of individuals. Every individual have the right to be respected. The system also permits the freedom of action and freedom of choice to every individual. American free enterprise system tries to satisfy the moral commitment by proving social safety for individuals. The political freedom has positivity only if it backed up by economical freedom. The government makes economical decisions as it feels comfortable. Political freedom has a meaning only if only if individuals live their lives as they determine by themselves. Political freedom puts a limit to governmental interference in the lives of individuals. Individuals have the right to vote and to express their opinion and point of view on the governmental actions. The Rawl's theory of justice states that all the individuals in the system have the right to the most wide basic liberty which competes with alike basic liberty. Americans are not pleased having unlimited liberty. Restrictions on the law are needed, in order to provide peace and security of the nation. Freedom provides a moral grounds of private property. Individuals also have the right to be free by law and by nature. Individuals are free to satisfy necessary needs for their survival and development including the use the natural resources. Efficiency includes the usage of natural resources and human labor. The waste is not needed because it takes away the potential goods of an individual in the long term. The defenders believe that America free enterprise system is really efficient in placing and using the goods and services, because supplies respond really fast to the demand.

None of the critics argue that capitalism had put an enormous impact on the ability of individuals to produce goods and services. Increase of human productivity since industrial revolution, increase in standards of living from 17th to 21st century. Mass production has increase which resulted in a great availability of goods and services for individuals survival and development, and for satisfying their wants and demands. The machine age is developing continuously, health care improved intensively, life expectancy has increase, and the opportunities of education worldwide had been realized by many individuals. All mentioned above is the result of American free enterprise system. Critics of capitalism do not deny that productive effect of individuals was and is developing though capitalism. Karl Marx himself had recognized and respected capitalism because it improves the development of human productivity. Capitalism freed individuals from hard work and continues to help the American society to have better living standards. Individuals have access to water, food, improved health care, existence of roads, and these are the factors which help to increase the standard of living of individuals. American economic system had improved human life and welfare by providing technology, by providing goods, providing refuges to people from other countries and satisfies Rawl's second principle of justice. Inequalities exist, but everybody benefit from it. Bill Gates is an extremely wealthy man. He provided employment for many individuals. He provided very useful and efficient products for many people worldwide. The defenders support Bill Gates, because he provided the benefits for many individuals worldwide. The difference between rich and poor harms the societies. The government put higher taxes for rich individuals. Warren Buffet became a very rich man by smart investments. Warren Buffet also votes for high income and inheritance tax. American free enterprise system is not perfect, it has its issues. American free enterprise system needs to look for the immoral aspects, as well as improving welfare of individuals. Since Marx days, socialism was seen as the next stage of human development. In theory socialism is strongly appealing. The defenders made a comparison of socialism with capitalism. Socialism is not an ideal system anymore. Findings showed that the standard of living in U. S. is higher then in the former socialism countries. In U.S.A People have political freedom, but in the former socialist countries there is no political freedom. The defendants concluded that capitalism is more preferable than Socialism. The experience of the people in Soviet Union in1989 and 1991 is the evidence that the system was unbearable, thats why most of the people choose capitalism. In conclusion the defense stated that most of Americans are not ready for adapting the new system. Americans are scared of the result of the experiment. By taxes government reallocates income, adjusts business activities, and finances own activities. Government provides employment for many individuals. In order to keep the conditions of market operations fair and legal, governmental confusion with business had been excused.

PHILANTHROPY
Both Bill Gates and Warren Buffett have started to give parts of their own wealth away through philanthropic charitable foundations, as they have promised they will do. The critique mainly is to

the system that allows people as Gates and Buffett to build up such wealth that allows them to indulge in such philanthropy and charity. Regarding this point, we find that because Bill Gates and Warren Buffett increase their capital in a way that harms other people around them. They also could have made a difference in the world with the amount of capital they have.

LEGAL ISSUE ANTITRUST TRIAL 2000

The legal issues arisen from the case includes the Anti-trust trial of Microsoft in 2000. The case accused Microsoft for bundling its operating system and web browser products together, which gained them monopolistic power and conditions to eliminate its competitors. For the remedies, Microsoft had to produce their products in separations and cannot impose their power anymore. It raised the legal issue of monopoly, whose effects are applied to both competitors and customers. Competitors cannot compete fairly with monopolies and customers are bound to their products irrespective of their desires. We thought that Microsoft has learned their lessons. However, the situation happened again in 2006 when Microsoft faced another trial with European Union for bundling their Windows with Window Media Player. As a result, they had to pay a tremendous fine and produced another version of Window without WMP. It happened twice in the past and there could be a possibility of it to happen again. The question has been raised and the answer lies in the hands of the government whose responsibility is to control those giant players in the game.

CONCLUSION
We believe that both Bill Gates and Warren Buffett are looked at differently by everyone. Bill gates, as you already know is known for his monopolistic business, where no one is able to compete and only he gets to grow his capital. Warren Buffett can also be judged because he is the one that uses currency to increase his own capital, so some can call him a speculator and he is the one who dictates in the currency market, but when he does, he makes it hard for others to survive, so banks and other companies go bankrupt. Both are very successful, however, many people would agree that with the amount of money they have, they could have contributed to the US and the rest of the worlds problematic areas more. We think that they are winners in this situation. The monopolist Gates can play with his prices as he wishes to because people have no choice and the speculator Buffett can buy currencies and let banks go bankrupt. The losers are consumers, governments, banks in case of Buffett and even people who use the public goods and services that governments propose. The big giants of the business world are the winners here because their capital grows and their tax burden is the same as for a ordinary citizen. We believe that the government should take more control of the situation and improve their tax system, but not the whole American system. They should increase tax rates for the hyper rich, but at the same time leave them their freedom to operate their organizations.