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Economics and Open Source Projects

michael posted more than 11 years ago | from the barn-raising dept.

News 214

david_christie writes "Dan Gillmor has a piece on the economist Yochai Benkler's paper "Coase's Penguin, or Linux and the Nature of the Firm" which examines open source projects asan example of an emerging general model of economic behavior that is neither market nor company based. A previous version of the paper was noted in slashdot back in October, but it's been revised for upcoming publication in the Yale Law Review and is well worth a second look. Benkler attempts to explain why open source projects succeed, without falling back on theories about the special nature of software projects or hacker culture. He suggests that more general economic principles are at work, which are displacing the traditional motivations (market prices and employee relationships) that economists use to quantify individual behavior. If he's right the open source model could spread to other forms of creative work where the output is information or culture (music production comes to mind). The author thinks deeply about the information flows characterizing collaborative projects like free software development ("commons-based peer production"). That distinguishes this paper from the usual economist mumbo-jumbo about price points and such. Like Larry Lessig on the legal side of things, this is a guy who gets it and has thought deeply about how his field relates to it."

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214 comments

DTABN (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952061)

DTABN

Death to all black niggers.

Thank you.

-klerck

CLAIMED (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952414)

8============D
Someone has to do this.

this post is the one at the top (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952066)

all the others are the ones at the bottom

CLOT

CLiT sux (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952072)

fp cocks.

FP 2D AC (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952079)

FP2DAC bitches

Bad news RE the notcha (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952086)


What is the notcha, you may ask? The notcha is the area "in between." Notcha balls, but notcha asshole either. The notcha!

Re:Bad news RE the notcha (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952264)

Also known as the taint.

Taint your nuts and it taint your bunghole.

Note that the actual name for the area is the perineum.

Open Sores are expensive (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952104)

You could get ganggreen or stuff and lose an
arm or leg from open sores.

never mind

Wait it works? (0)

The Rogue86 (588942) | more than 11 years ago | (#3952109)

All this time Windows has been saying that Free/Open Source Software will disapear because there is no economic background..... Microsoft also sold me parts of the Golden Gate Bridge.

Re:Wait it works? (1)

Anonymous Coward | more than 11 years ago | (#3952153)

You're damn right it works! Some dude who "gets it" says so!

Open-source music? (4, Insightful)

MaestroSartori (146297) | more than 11 years ago | (#3952114)

But then, most open source programmers are, I would guess, full-time programmers. Which helps pay for all those neat toys. None of the professional musicians I know (and I know quite a few, session & orchestral players) would record music and give it away.

What does that leave us? Amateur musicians like myself pimping their home-grown stuff. Which in some cases will be as good as or better than the pros, but the vast majority of it will be as cruddy as all those non-updated open source projects on Sourceforge...

Re:Open-source music? (5, Interesting)

a_n_d_e_r_s (136412) | more than 11 years ago | (#3952152)

Actually most professional musicians does not get paid by recording CDs - they get paid by performing music at clubs and other venues.

I.e. basically they have a salary paid by others and not by people buying their recorded music.

It's actually very few people who make money selling records - most of them actually work at the record company and are not musicians at all. They are mostly managers, agents and record bosses.

Re:Open-source music? (2, Interesting)

MaestroSartori (146297) | more than 11 years ago | (#3952231)

Yes, and they don't make a great deal of money doing that - I've gigged with a few bands in my time. However, you can't make enough gigging (unless you're prepared to do that full-time) to do much studio recording, which is why many bands go for the explotative record deals in the first place. They don't just do it for fun! :(

Re:Open-source music? (2)

God! Awful (181117) | more than 11 years ago | (#3952541)


Actually most professional musicians does not get paid by recording CDs

I think we know that already. This point only been stated about a billion times on Slashdot before, although it always gets modded up to +5, insightful (sometimes multiple times in the same thread), so I guess it's good for karma whoring.

- they get paid by performing music at clubs and other venues.

Actually, most of those people hardly make any money performing. A lot of them have a full time job and they play music in their spare time.

Let's look at what the OP said:
None of the professional musicians I know (and I know quite a few, session & orchestral players) would record music and give it away.
Do you think all the bands out there who are getting ripped off by the labels wanted to give their music away for free? Of course not. They signed a contract thinking they were going to make money but they didn't. That makes them far more likely to sell their music through an alternate channel (e.g. a personal website) than to GPL it.

-a

Re:Open-source music? (5, Insightful)

Damek (515688) | more than 11 years ago | (#3952242)

You know, people are always saying that the problem with amateur (i.e. non-corporate) music/art/software/whatever is that the vast majority of it is cruddy. Pick any artist from MP3.com at random, or any project from Sourceforge at random, and chances are the music will be pretty cruddy, or the project will be lifeless...

But you know what all this is? It's called CHOICE. And it has always been there. Corporate sponsorship of creativity and ideas makes it easy for people who don't like to deal with choice to find a couple of good things here and there. But it doesn't particularly foster the best creativity or ideas, only the easiest to market. It doesn't make the world a better place, it only makes shareholders and CEOs richer.

Choice is good, but it does take effort to appreciate.

As the parent acknowledged, in some cases amateur stuff is as good as or better than the pros. People have become so used to being force-fed their ideas that they can't believe that the good ones might also rise to the top in a truly free idea market. But they will - in a free idea market, without corporate sponsorship, the most visible art and ideas will be the ones you hear about most from other people, some of whom you will trust more than others. Much like internet memes, a good artist will quickly and easily become well known in an absense of corporate interest. Unfortunately, as things stand now, corporate interests drown out amateur efforts.

Re:Open-source music? (3, Interesting)

idfrsr (560314) | more than 11 years ago | (#3952275)

Sure there are a lot of "cruddy non-updated open source projects on Sourceforge", but I myself would love it if musicians were free to get together and play what they want with whom they want and create truly great music.

At the moment, if you are a pro musician, you're probably signed to someone, and so you have to do what they say. You can't get together with someone you met at a concert and do a project together unless your label approves it (which is unlikely). That was why even Eric Clapton and George Harrison played under psuedonyms(sp?) on for each others labels, so as not to infringe on the labels that owned their works.

Not every musician needs to give away their music, but I bet a fair amount would. It would sure lead to some great stuff. The cream would rise to the top (just like OSS) and we would all be beter for it.

Re:Open-source music? (1)

mwood (25379) | more than 11 years ago | (#3952354)

If you want to see a (fictional) pure gift economy in action, read Hogan's _Voyage from Yesteryear_. Chiron sounds like a nice place....

Re:Open-source music? (0)

areguan (578670) | more than 11 years ago | (#3952328)

To make all of this free music available, we could setup a sort of website "repository" that will host this "open" music. We could register mp3.com and, oh, wait...

Re:Open-source music? (4, Insightful)

SirSlud (67381) | more than 11 years ago | (#3952371)

Making music, is, by definition, and Open Source process.

Open Source. Free as in speech, not free as in beer (or free as in CDs, if that helps.)

Please know what you are talking about before you comment on it.

It's not about giving it away, its about your music being trasparent. Your musician friends are Open Source friendly whether they like it or not - I can go to a show, transcibe their music, make some modifications, alter it. Now, I can't sell it, but that doesn't mean that I'm not able to know how the music was built. I can find out just by listening to it.

Compilers are like (neccessary) noise-makers .. you obfuscate the 'sound' of the software such that I can't transcribe it and use it as imput/inspiration to another creative work. In music, the 'source' and the 'compiled version' are usually, in practice, synonymous.

And the reason your musician friends dont give music away for free is because if anybody gave all their product away for free, nobody would make a living. Duh. That doesn't mean that they should try and prevent people from knowing how their sound/songs were built, because that kind of information is what *drives* culture. No artist has ever created anything original - art is just a history of creative "patches" to others' work.

wrong name (0)

Anonymous Coward | more than 11 years ago | (#3952388)

Don't call them Open Source Programmers, call them volunteer programmers. Everybody knows what a volunteer is, and almost everybody has volunteered at some time. Who the hell knows what Open Source or Sores or whatever is?

As a volunteer, you're also covered under each state's Good Samaritan Laws, and you're generally immune from being sued, as under UCITA for a non-disclaimable Merchantibility clause.

Geez, does everything have to be spelled out for you?

Re:Open-source music? (1)

Smedrick (466973) | more than 11 years ago | (#3952436)

I think it stems a little deeper than professional musicians not wanting to give their music away for free. If music was truely open source like the software projects, then it would involve many different musicians contributing riffs and lyrics and vocals and whatnot to create songs. The problem with this is that music (like the other forms of art) can be very personal. And while open source music might help those who aren't capable of creating a complete song, most professional musicians would want to control every creative aspect of the songwriting process.

Obviously it's a really cool idea, and a lot of musicians do it today to some extent (i.e. the Counting Crows getting the help of Sheryl Crow and Ryan Adams on a couple tracks on their latest album)...but I can't see it becoming any more than a novelty or side project.

economic behavior? (-1, Troll)

Anonymous Coward | more than 11 years ago | (#3952130)

"Dan Gillmor has a piece on the economist Yochai Benkler's paper "Goatse's Penguin, or Linux and the Nature of the Firm" which examines open source projects asan example of an emerging general model of economic behavior that is neither market nor company based..."

Most Open Source projects favor failure as their "economic behavior":

LNUX [msn.com] RHAT [msn.com] etc

Holy Fuck! (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952345)

LNUX [msn.com] loses over $7 per share! The onlt people making money from LNUX are the red ink manufacturers!

first goatse.cx advertisement post (-1, Troll)

Anonymous Coward | more than 11 years ago | (#3952132)

g to the oatse
c to the izzex
go visit goatse.cx [goatse.cx] !

mod this down to -1: Troll, please!

Why... (0)

the great bortman (595899) | more than 11 years ago | (#3952156)

Open source projects succeed because the people working on them actually enjoy working on them. They can take the project in the correct direction, instead of the corporate direction.

one word (1, Interesting)

Anonymous Coward | more than 11 years ago | (#3952223)

Mozilla.

four years from a working codebase to a (barely) shippable product.

Mozilla certainly eschewed the "corporate" direction, refusing still to fix rendering bugs which MSIE does not share and instead babbling about "standards". But instead of choosing one correct direction, the Mozilla team chose ten or fifteen of them, selected an obscure computer language which nobody knew, demanded 8-way cross-platform compatibility, and then proceeded to code all of this without once dropping below an 0.12% blood alcohol level. Then the code was united from all its inferior "components" (Chatzilla, Gecko, Galeon, etc) into one monolith of binary terror, poised and crouching, just waiting to take a giant memory leak and a huge core dump on your desktop.

Microsoft, on the other hand, honed IE into a product which both advances their political and economic goals, and also doesn't suck balls.

Corporate 1, OSS 0.

One slight error (0)

Anonymous Coward | more than 11 years ago | (#3952370)

It is actually Corporate 2, OSS 0.

Mozilla made it this far only because AOL/TW is paying most of the Mozilla developers to program Mozilla.

Actually you were right for the wrong reason. Mozilla eschewed the "corporate" direction & promply died. They regained the "corporate" direction & came back to life.

Re:Why... (0)

Anonymous Coward | more than 11 years ago | (#3952294)

Open source projects succeed because the people working on them actually enjoy working on them.

You're almost right.

Open source projects usually don't succeed. A quick browse of SourceForge [sourceforge.net] or Freshmeat [freshmeat.net] will verify that most OSS projects are poorly-crafted code-trash which deserves never to see the light of day. A few OSS projects are worth using. Those tend to be the ones written by people who like writing it, yes, but also know their ass from a null pointer and are willing to spend time coding it.

on a personal note, you're a karma-whoring fuckknob without a grain of wit from your misshapen head to your ingrown toenails. i sincerely wish that you will be involved in a high-speed automobile crash in the near future.

Re:Why... (0)

the great bortman (595899) | more than 11 years ago | (#3952350)

on a personal note, you're a karma-whoring fuckknob without a grain of wit from your misshapen head to your ingrown toenails. i sincerely wish that you will be involved in a high-speed automobile crash in the near future. That's a little uncalled for, and this was my very first post ever on /. but if you feel you must post flames, I guess that's your right. (please mod this -1/offtopic ... I just had to reply.)

Re:Why... (0)

Anonymous Coward | more than 11 years ago | (#3952369)

this was your first post ever?

looks like you'll fit right in.

kill yourself. now.

Re:Why... (0)

the great bortman (595899) | more than 11 years ago | (#3952455)

I love the "intellectuals" in this community.

I guess I'll just go cry in the corner now, since I could never live up to your massive brain power. If I had realized /. was for personal attacks instead of actual discussion of news stories, I would have included a generic flame in my sig. Thank you for alerting me!

Re:Why... (-1, Flamebait)

Anonymous Coward | more than 11 years ago | (#3952518)

well now you know, you pathetic shitbag. and who the fuck are you calling an intellectual?

Wuzzah? (0)

Anonymous Coward | more than 11 years ago | (#3952173)

Open-source projects cannot be sold.
Therefore there are no economics of it.
Therefore this story is useless.

Good thing I didn't read it... otherwise it would try to influence me by their left-wing marxist bias

Re:Wuzzah? (2, Informative)

LowellPorter (466257) | more than 11 years ago | (#3952277)

Open Source Projects can be sold. However, you must include the source code. You can still have a regular copyright on content. An example would be the Quake engine. Id released the source code. You can develop a game with it and change the source. You can then sell the game all you want. You must release the source you used/changed for the game. However, you can still copyright the graphics, music, and content and prevent others from using it in a commericial product. Open Source does not mean free software as in money, but free access to the source code to the software.

Re:Wuzzah? (3, Informative)

Nomad7674 (453223) | more than 11 years ago | (#3952530)

I am sure this will be modded down as the response to a zero-rated post, but hey why not? :-)

Economics is not the study of money. It is the study of the flow of resources and value through a system. Early economic systems had nothing being sold - things were given or traded, and in some gift-based cultures you got nothing tangible in return. OpenSource has a definite economic structure and flow of resources - they follow the interest.

Actually, I would make the argument that OpenSource-type movements are only really possible in an already mature and vibrant economy. Could OpenSource have evolved without this strange commodity we call "free time?" Most of human history was involved with very few activities: eating, sleeping, reproducing, fighting, and running away from things try to kill you. Only in the last few centuries have societies evolved with "free time" built into them. Once you have free time, you have time to think about what you "enjoy." Once you know what you enjoy and some extra wealth lying around (either in the form of time, currency, or resources), then you can pursue the things you enjoy. Only in this final state can OpenSource (as it exists today) really work and thrive.

Funny, if my hypothesis is correct, OpenSource is not some anti-American (or anti-Liberal Capitalist Democratic Republic, for those of you outside of the USA) conspiracy, but rather a natural outgrowth of our society.

He forgot something basic (0)

Anonymous Coward | more than 11 years ago | (#3952175)

The freeloader problem: people who take without contributing, because there is no reward for contributing and conversely, no punishment for not contributing. As such, people tend towards taking without giving back, lessening and lessening the amount of contributors.

Re:He forgot something basic (2)

mccalli (323026) | more than 11 years ago | (#3952204)

...people tend towards taking without giving back, lessening and lessening the amount of contributors.

Well, lessening the proportion of contributors anyway. The amount stays the same.

Cheers,
Ian

Re:He forgot something basic (0)

Anonymous Coward | more than 11 years ago | (#3952237)

No, the assumption is a static community. In that community, as people realize there is no reward for contributing or punishment for not contributing, they lower their contributions as time goes on. Sure, you can argue that the community is growing, but to observe an individual tendancy, you have to hold everything else constant.

That's the basis behind the old (and stupid) joke:

Q. How many economists does it take to change a light bulb?

A. 100. One to change it and 99 to hold everything else constant.

Re:He forgot something basic (3, Insightful)

mccalli (323026) | more than 11 years ago | (#3952341)

. In that community, as people realize there is no reward for contributing or punishment for not contributing, they lower their contributions as time goes on.

Hmm. Not really applicable to open source though, is it? I'd agree that this is the conventional model. However, no-one ever gave anything back in the first place to the developer, so whatever their incentive to start writing was - that incentive still exists.

Cheers,
Ian

Re:He forgot something basic (5, Insightful)

merkel (219826) | more than 11 years ago | (#3952342)

No, this is wrong...

The freeloader problem really manifests itself only in the Tragedy of the Commons. That is, freeloaders are only a problem when resources are scarce.

If we assume the marginal cost of distributing free software is 0 (which is probably true for the developer as there a many sites that will mirror popular software distributions), then why does it matter if 100 or 1000 or 1 million people download it?

I think most open source developers would be happier to have a popular application with 10mm freeloaders, rather than pulling a Bill Gates and bitching about all the ungrateful pirates out there.

The real viability issue for open source is whether it is possible to maintain a stable base of developers for an application -- not the number of freeriders.

Re:He forgot something basic (0)

Anonymous Coward | more than 11 years ago | (#3952378)

The real viability issue for open source is whether it is possible to maintain a stable base of developers for an application -- not the number of freeriders.

I would argue that is one problem - not too distinct. After all, given your assumption that there is no marginal cost to production, there are only two possible states a person can be in with regard to open source software: a contributor or not.

By definition, a freeloader is not a contributor. Thus, every freeloader is one less contributor (and, of course, every contributor is one less freeloader). By this light, those are not two distinct problems, but one.

Re:He forgot something basic (1)

martyn s (444964) | more than 11 years ago | (#3952449)

He did NOT say there is no marginal cost of production. He said there is no marginal cost of DISTRIBUTION.

A freeloader is not a contributer. A freeloader is one who diminishes the availability of the resources for everyone else. Since there is no scarcity it doesn't matter if there are freeloaders.

My point is, it's not like you need one contributer for each freeloader. All you need is a certain number of contributers, and it doesn't matter how many freeloaders there are; freeloaders do not diminish what is available for everyone else.

Re:He forgot something basic (0)

Anonymous Coward | more than 11 years ago | (#3952483)

My point is, it's not like you need one contributer for each freeloader.

A freeloader is one who diminishes the availability of the resources for everyone else.

Exactly. And what are the resources in an OSS environment? Contributors. And there is a finite numebr of potential resources, is there not? So, if a freeloader is not a contributor, how are they not taking away resources?

Re:He forgot something basic (1)

martyn s (444964) | more than 11 years ago | (#3952599)

NO. Freeloaders do not KILL contributers. They do not "take away" contributers. The resources I was referring to was the software. Anyone can take and use the software without diminishing anyone else's ability to use it.

Stop being stupid. Are you trying to say that if the software *weren't* available for free, then this "freeloader" would've been a contributer? That's crap. In fact, making the software open will likely find you more contributers.

Sorry, but your freeloader was *never* a "potential contributer". He's not taking away anything. You're equating taking away resources and not adding to resources. They're not the same. Freeloaders do not lower the number of contributers, they simply don't contribute.

Re:He forgot something basic (1)

ryochiji (453715) | more than 11 years ago | (#3952402)

>there is no reward for contributing [...] lessening and lessening the amount of contributors.

Obvious you're not an open source developer (and probably shouldn't be if that's the way you think). Generally, I don't think Open Source developers look at "rewards" the way you (and most normal people) do.

I worked on my project for 2 years before I even released, and it's been as rewarding as any paid job I've had. My project just saw a large scale deployment, satisfying the company that deployed it as well as their users, which, in turn, has made the experience one of the most rewarding in my life.

To suggest that contributing to an open source project isn't rewarding is simply insulting to those of us who do feel rewarded.

Open Source Music??? (3)

timothy_m_smith (222047) | more than 11 years ago | (#3952177)

If he's right the open source model could spread to other forms of creative work where the output is information or culture (music production comes to mind).
Open Source Music Production...so, are we talking about a bunch of "We are the World" records?

Re:Open Source Music??? (1)

Thoguth (203384) | more than 11 years ago | (#3952263)

No, probably more like root records [rootrecords.org] . AFAIK, there aren't any open-source collaborators working on those songs, but it's probably just a matter of time.

Re:Open Source Music??? (0)

Anonymous Coward | more than 11 years ago | (#3952296)

Open Source music would be if you had written no songs and couldn't play any instrument, but you have this AWESOME idea for the album cover. Now you just need to get a SourceForge site up and the rest will take care of itself.

Re:Open Source Music??? (1)

Rory Drum (595149) | more than 11 years ago | (#3952560)

More like a bluegrass jam community (or any other healthy informal community of aesthetic practice). These folk communities are engaged in an evolving process of refinement of individual skill and knowledge based upon collaboration, critique, consensus, further practice. Of course the analogy breaks down at some point -- open source work usually creates applications not experiences for one thing. But is not much of the motivation for open source development aesthetic?

Investing in OSS (3, Interesting)

Real World Stuff (561780) | more than 11 years ago | (#3952188)

Forbes has a great article [forbes.com] looking at OS businesses as the market faces current tribulations. They objectively look at the financials and give a good overview based on history and performance. They disclose upfront that they have a feed from slashdot.

A very good read, and it supports the partnership that VA and Forbes have made.

Economist Article (3, Informative)

sien (35268) | more than 11 years ago | (#3952319)

The Economist has just put up an article [economist.com] about how Open Source's future in the world, and how bright it looks.

Sourceforge business plan (1, Funny)

Anonymous Coward | more than 11 years ago | (#3952192)

1. Publish ads featuring lightsabers
2. ?
3. Profit

Communism at work? (2)

faqBastard (174444) | more than 11 years ago | (#3952197)

A random thought: The barn-raising example from Gilmour really seems to me like communism at its best: People in the community volunteering, without being forced, to a common project, because of the pride, etc. it gives them.

It's what always seemed to me flawed with other (arguably) noble Communist experiments, like the Soviet Union. Specifically, that all citizens were forced to participate in this system, in effect with a gun to their head. (You will help! We will be happy, dammit!) Over-simplifying possibly :-) but my main point is that the forced nature of many public-welfare-type projects seems to necessarily lead to resentment and division.

Given that volunteers to an Open Source project are just that: volunteers, it seems possible that these projects may come much closer to the spirit and the ideal of communism. So the article seems optimistic and hope-ful. And very cool.

Just my $.02--

Re:Communism at work? (2, Interesting)

Wudbaer (48473) | more than 11 years ago | (#3952270)

And the system certainly also inherits communisms inherent flaws. In the end, communism not only failed because people were forced into it, but because true communism only can work if people in general are acting completely altruistic which they usually aren't. So people tend to press everything they can out from a system that allows them to do it while trying to contribute as less as possible. So sooner or later, the system runs of of money and other resources needed to power the system. Game over. Everybody lost.

Even in the Open Source world, most developers don't write programs for the good of mankind but to scratch an itch, to show that they can be better than closed source software or for the fun of it. And most users usually give a damn about the free speech aspect, they only want to get really drunk hard with the free beer.

Re:Communism at work? (0)

Anonymous Coward | more than 11 years ago | (#3952314)

You bring up a very good point. Without capitalism driving open source, it wouldn't be NEARLY as successful as it is today.

Now do you see the humor in Linux destroying Microsoft? Without MS, people would be 'forced' to have to write some Operating System, and to innovate it. I guess that fanatics are always the downfall of something, whether it be religion, or some ideal (read: linux elitists/bigots)...

Re:Communism at work? (1)

chris_mahan (256577) | more than 11 years ago | (#3952333)

That may be true of society as a whole, but Geeks generally are much more altruistic because they regard achievement as more than just the amount of capital genereated.

Re:Communism at work? (1)

Dthoma (593797) | more than 11 years ago | (#3952281)

The best part about OSS is that it can't be used to restrict the freedom of others, and that it can't be corrupted as easily as Communism itself. Human nature shows that Communism often becomes a dictatorship, but it is hard to see how OSS can become proprietary software.

Re:Communism at work? (1)

rsd1s1g (519812) | more than 11 years ago | (#3952325)

That's what tears me apart about this whole open source issue. Being a follower of Ayn Rand's philosophy, I can't seem to rationalize how devoting one's time and energy and not recieving any kind of monetary compensation is good. Yet, I wrote a paper for my Economics class last term advocating this very thing. I see it in action, am a staunch supporter of all things Linux, Apache, FreeBSD, etc. Yet, especially after reading this article, the whole things just seems to reek of socialism...

Re:Communism at work? (2)

elmegil (12001) | more than 11 years ago | (#3952418)

The only way the Libertarian ideal can work is if you are certain to keep in mind the word "enlightened" in the phrase "enlightened self interest". If we just devolve into "self interest" we get the negative side of capitalism: monopoly, corruption, et. al. Look at our happy corporate mess in the US today for many prime examples.

The "englightened" part of all this is where you realize that there are other forms of compensation besides monetary. Having a good environment in which to make and spend your money can entail making donations to civic organizations in the form of money and/or time. It can probably entail a large number of things that I'm not thinking of at this very moment, none of which gives you direct monetary compensation.

The point is, you have to have a balance. The pure greed/self-interest/whatever you want to call it of a completely open market is, in my opinion, clearly not the optimal social environment. You have to balance some socialistic seeming institutions with some capitalistic solutions for everything to work. I think the point about voluntary vs. mandatory is really key in how you strike that balance too.

Re:Communism at work? (0)

Anonymous Coward | more than 11 years ago | (#3952425)

Being a follower of Ayn Rand's philosophy

with truly no personal slight intended, i would beg to submit that that might be most of your real problem, right there. Rand's ideas sound nice at first, but even she and her inner circle didn't exactly live by them in practice - certainly they did not become any models of virtue and all that's good about humankind because of those ideas. you might want to carefully, open-mindedly look into some of the critiques other philosophers have published of objectivism - criticism can't hurt a sound idea, after all, right?

in practice, extremism is what makes things unworkable. communism as practiced in the USSR failed because it took ideas to ridiculous extremes, which was more than enough to make those ideas ridiculous regardless of whether or not they were to begin with. similarly, laissez-faire capitalism in the extreme doesn't work either, and for the same reason.

(one of the times that latter extremism was tried, things got so bad Karl Marx got inspired to write some really, truly silly things in opposition to it, which in turn served as inspiration for the less extreme labour union movement, which managed to genuinely improve conditions for at least a while. what became of it after that is another, long and confusing story...)

Re:Communism at work? (1)

bluprint (557000) | more than 11 years ago | (#3952334)

but my main point is that the forced nature of many public-welfare-type projects seems to necessarily lead to resentment and division.

And inefficiencies.

it seems possible that these projects may come much closer to the spirit and the ideal of communism.

The whole point of communism is that it is an established, enforced, system. Given free-market/libertarian type thought in regard to markets, there is nothing that precludes charity. In fact, it is expected that there is at least some charitable nature in humanity, and that that level of charity would more than support need, and do it more efficiently.

Bottom line, there is no reason this type of behavious is excluded from a capitalist/free-market economy. It's part of human nature. I wouldn't say that "barn-raising efforts" are "communism at it's best", but rather human nature and free will at it's best.

Re:Communism at work? (0)

Anonymous Coward | more than 11 years ago | (#3952412)

This sort of voluntary colaboration of individuals in a classless society is the ideal set forth in Marx's works. But it certainly isn't the reality of communism in the real world.

Supposedly, after the workers revolted and seized control of government, then they could gradually dissolve the government until they were left with a utopian cooperative effort. Of course, it never happened, except by fiat (You will help! You are happy! as you said.)

Perhaps the lesson is that governments can't force people to work together in this way effectivelly, but government can work to promote environments conductive to it.

Of course, the US is doing the opposite (DMCA, zillion year copyright extensions, Hollings, etc.)

Can you imagine... (3, Interesting)

idfrsr (560314) | more than 11 years ago | (#3952199)

If music artists started their own OS projects. Imagine a world where music was free, to make, to listen to, to change.

I remember reading/using an official music book that had the all the songs ever recorded by Stan Rogers (a Canadian folk musician). In his forward, he said feel free to learn these songs, and play them as you want, in the great tradition of folk music. He even ended with if you find a better way to play them, let me know.

I hope the OSS model does in fact become common-place in other parts of culture and public works.

Emperor's New Economics? (1, Interesting)

Anonymous Coward | more than 11 years ago | (#3952201)

"an emerging general model of economic behavior that is neither market nor company based"

Open Source is merely a variant of the way modern western science has behaved for the last four centuries. Everything is open and published.
The only blot is that there is patenting, but even patents are openly published albeit restricting those that can exploit them for a limited time.

A new type of economic good (1, Interesting)

Anonymous Coward | more than 11 years ago | (#3952203)

Economics is still largely based on theorisation of 19th century economics. This is the 21st century, and no longer does all economic produce have to have any material/physical/medium/transportation cost.

Software isn't yarn. We don't need companies producing music, movies, art and movies for us - it'll happen by itself anyway.
The movies would be bad without big bugets you say? Maybe it is because we've become acustomed to quantifying how 'good' a movie is by how flashy its special effects are and not its actual storyline. The music would be bad? Why? True market forces, no distortion by lowest-common-demoninator exploitative marketdroids; production by those who use and love it.
Many areas of economics are like this. But companies are te real power, not the citizens, because the citizens are too ignorant. The coporations would rather have us all under some sort of security & surveyance nightmare than let go of their exploitation of us. And I'm not even a communist.

full-time open source (1)

martyn s (444964) | more than 11 years ago | (#3952208)

Open source is successful even though it's just done by hobbyists, in their free time, who spend the rest of their time making money from a salary.

Imagine if public organizations funded open source programming, kind of like how universities are funded to do research. This would mean that these people who love doing open source work would be able to devote their time to it. That would be really great.

Coase's pengiun (1)

Qrlx (258924) | more than 11 years ago | (#3952218)

For some reason, I read that as "Goatse's Penguin"

Guess I've been reading at -1 too much lately...

So-called intellectual property (0, Offtopic)

CommieLib (468883) | more than 11 years ago | (#3952221)

This article violates my filter to disregard the ideas of anyone who uses the term "so-called"...

Re:So-called intellectual property (0)

Anonymous Coward | more than 11 years ago | (#3952479)

In response to your sig: Plebs exaequo te oportet haud conor scribo Latin! I studied classics at Oxford - you clearly did not.

This is Market Economics, plain and simple. (3, Insightful)

BitGeek (19506) | more than 11 years ago | (#3952222)


Open source is the definition of Market Economics. It does not need its own theory- it proves the Marekt theory in the most divergent context imaginable.

If you have an idea and you open source it, you get free engineering. People contribute their engineering and get the utility of yours and others in response. This is a free exchange of value in a free market.

IF your terms suck, or you change direction in mid stream, the others are free to leave your project and start their own, or go along with you if they like your direction.

Linux is a consistant linus kernel because people like linus's direction-- not because he "owns" it. That is direct market feed back to linus.

If you are selling your product to people who are contributing nothing but money to the process, and are just using it, then you are in the traditional software model. but Open source works here as well-- you can incorporate open source into your product and leverage others work to make more money off of your work. At the same time, the MARKET FORCES (not the GPL) will force you to contribute your improvements back to the community. And finally, you're not profiting unfairly from others work because the others contributed freely, and were compensated... and also can sell the results in the market place against you, so if your product is PURELY reselling open source, then you'll loose the inevitable price war-- its hard to beat free.

If, however, you actually add value to the product, on top of the open source, then you CAN charge for that value and everybody wins-- your customer gets a better product with more features and testing than you could otherwise do yourself, the other os developers get the benefit of your improvements and you get more money for selling a better product that cost you less to develop.

This is all free market economics.

The differnce between open source (free market) and communism is that under communism you are forced to work for the state against your will. Here in america, we are %50 forced to work for the state against your will, but they cleverly let us work for private companies and only took the product of half our work in taxes (fees, etc. And yes, last time I did my taxes, my total payments to the state were over %50, and I'm in a medium tax bracket.)

Even with the GPL, however, you are not compelled to work for the "State"... you can choose to not use the GPL for your code, or go make code to replace whats' in the GPL, or just use the gPL code and not change it. ITs a free market of licenses.

Since the government isn't (Yet) regulating software, the emergence of the open source movement proves that free markets work-- whenever one company gets to monopolistic, under free market theory, competitors emerge. Lots of competitors have emerged to Microsoft, but Open Source is the first one to really sustain a battle and change the terms of the war.

As long as the state doesn't mandate Microsoft control (As they may wit palladium) the free market will prevail and the products that offer the most utility value will succeed. For a long time Microsoft was able to distort the market with anti-market means, and also provide sufficent value to have locked up much of the market--- a great example of the market under a lot of stress.

But the emergence of the free market, the resurgence of a variety of MS competitors- from Sun to Apple to IBM to me, shows that the free market does work-- even with the governments help for microsoft, the market is beating them.

Not financially right now, but in terms of brainshare and technology, MS is currently loosing. In order to win, or even survive, they will have to deliver better value for their prices... and since open source software is free, the competition is stiff.

So, no, there isn't a new theory needed-- The Free market works and has been validated, yet again, by opensource. (So stop voting republican or democrat and become a libertarian already.)

Re:This is Market Economics, plain and simple. (-1, Flamebait)

Anonymous Coward | more than 11 years ago | (#3952304)

Open source is the definition of Market Economics. You show a woeful understanding of market economics. Market economics dictate that price is determined by the functions of supply and demand. Here's a basic example. [about.com] So, as price increases, supply goes up - more people are willing to sell something at a higher price, right? As price increases, demand decreases - less people are willing to buy at a higher price, right? Market economics dictates that the free market determines price as these two functions intersect. Nowhere does the definition of market economics mention anything about free engineering. In fact, the term "free" is an anathema to true market economists. Nothing is free - after all, there is always an opportunity cost. In conclusion, STFU and go back to smoking pot with your libertarian buddies.

Flamebait? While the parent is Insightful? (0)

Anonymous Coward | more than 11 years ago | (#3952395)

Wow, the mods like to smoke their crack rocks. No wonder there is so much trolling here.

Re:This is Market Economics, plain and simple. (2)

ajakk (29927) | more than 11 years ago | (#3952348)

And yes, last time I did my taxes, my total payments to the state were over %50, and I'm in a medium tax bracket.

I would hate to know what you were doing to get taxes that high. The average family in the United States pays between 20-25% of their income to taxes.

Of course your pro-libertarian rant left out many of the complexities of the marketplace that cause free market economics. Namely, you left out the ability of consumers to obtain accurate information, and the strong anti-competitive pressure that a network effect can have. As we have seen from recent corporate scandals, consumer often have a very hard time obtaining accurate information about products they would like to purchase. Microsoft is a very good example of this. They can spew FUD with the best of them, and their misinformation machine will cause consumers to purchase items which are not actually in their best interests. Also, the network effect of economics makes it so that many people won't want to switch to a operating system that other people are not currently using, because the OS doesn't give them the value that it normally would with an increased number of other users.

Re:This is Market Economics, plain and simple. (2)

BitGeek (19506) | more than 11 years ago | (#3952434)

I would hate to know what you were doing to get taxes that high. The average family in the United States pays between 20-25% of their income to taxes.

THis is simply not true. The average family pays that much in INCOME TAXES ALONE. When you add Sales taxes (%8) car taxes, STATE TAXES (say %10), gas taxes, Social Security (%16) Medicair (dunno) you easily get to %50 for the average family.

Hell, add sales tax and social security to %25 and you're already in the %40... not including the property taxes you have to pay and the phone taxes you have to pay (%12 roughly), etc. etc. etc.

Pretending that income tax is the only tax you have to pay is dishonest.

s we have seen from recent corporate scandals, consumer often have a very hard time obtaining accurate information about products they would like to purchase.

I love it how leftists consider "Fraud" to be the natural state of the freemarket.

FRAUD IS FRAUD. It is illegal, and thus the only question is if it is being prosecuted enough.

And, as I pointed out, even despite the Microsoft effect, the freemarket is beating them. Not financially yet, but technologically and mindshare wise. Non-MS operating systems are the fastest growing, and apache seems pretty stable with over %50 marketshare. Did you just not read that part?

Sheesh.

Re:This is Market Economics, plain and simple. (3, Insightful)

MattJ (14813) | more than 11 years ago | (#3952387)

"Open source is the definition of Market Economics. It does not need its own theory-"

It might be *possible* to describe the Open Source movement in terms of standard market forces, but it is not parsimonious.

I wonder whether you've read Benkler's paper. It's long, and as he says, he spends "substantial space in this article explaining why peer-production processes appear to respond mostly to cues other than price signals." *That* is clearly one aspect that removes this from the realm of market forces. If you want to argue tautologies about how people always do what's in their best interests, etc., go ahead. But you're not describing standard market economic models unless actions are motivated by profits and regulated by prices. Free-as-in-beer software may be used by some companies to save money, but that's not why most programmers create it.

"[T]he emergence of the open source movement proves that free markets work-- whenever one company gets to monopolistic, under free market theory, competitors emerge. Lots of competitors have emerged to Microsoft, but Open Source is the first one to really sustain a battle and change the terms of the war."

Are you serious? This proves the opposite. It proves that in an unregulated market, monopolists can emerge that can't be dislodged by any competing firm. Only people who are not motivated by profits have a chance, and only by creating a product that has zero marginal costs (digital data) and zero price. Those assumptions overturn all of the first chapter of Econ 101.

Market forces do not explain all aspects of human behavior. Why do some libertarians get so defensive when that's pointed out?

Re:This is Market Economics, plain and simple. (2)

BitGeek (19506) | more than 11 years ago | (#3952465)



The error you, and many others make, is confusing "prices" with "Value"

Free software has value, even though its free.

To claim that the free market is only about pricing things in terms of CASH is false. Pricing includes value, and everything that goes into a transaction-- labor, for instance.

By your theory, every worker is getting a free ride because they put no money in and get money out.

Free Market Economics is not about pricing of cash, its about pricing in terms of value. To pretend that "only profits mater" to people is stupid -- a huge profit is pointless if you end up in jail, and thus fraud is rather rare in a free market economy.

Monopolists MORE OFTEN emerge in regulated markets-- the government creates them. YEs, in an unregulated market, they can emerge, but tehy cannot survive for very long.

To say that people developing open source software are not motivated by profits is to lie-- either about them, or the definition of "profit" which is to "receive value"... Things other than cash have vale- even to capitalists.

Re:This is Market Economics, plain and simple. (3, Insightful)

William Tanksley (1752) | more than 11 years ago | (#3952410)

You're right and you're wrong.

Yes, classical liberal economics (the a priori discipline) encompasses open source, and explains its success quite well; but at the same time, there are broad financial models within that discipline which fail to explain open source, even though open source has financial consequences. This paper examines open source with the intent of fitting it into some of those models.

I'm using the term 'economics' to describe the science which examines the results of human actions and choices, while 'finance' is the subcategory of that which examines only intercomparable human actions and choices, and which uses money as the instrument of comparison. A better choice of words would be to use 'praxeology' for the first term, and 'economics' for the second.

See von Mises' text 'Human Action' for MANY more details. In that text he covers praxeology in general and economics in specific. Highly recommended, and available as a free ebook on mises.org.

Oh, and although Mises is the poster child of the Libertarians, he wasn't one and couldn't have been one (there weren't any at the time). So check your prejudices at the door. A lot of what he says is valid even under non-Libertarian assumptions, and much of the rest is valid as long as you don't try to apply it too far (as most Libertarians do).

Note the big L -- I'm a libertarian, but I'm not a Libertarian.

-Billy

Re:This is Market Economics, plain and simple. (2)

BitGeek (19506) | more than 11 years ago | (#3952503)


My only prejudice is to figure von Mises is worth reading.

I know of no difference between Libertarians and libertarians. Except that some people calling themselves libertarians are idiots, but that's to be expected. There are even objectivists who support Microsoft (thus violating objectivist morality.)

That people may have built financial models that don't account for open source is not an issue-- it simply means that the models may not be correctly applied, and are appropriate only to situations where value is only represented by cash. Hence using the word financial is appropriate.

But the free market is a free market of value (not cash), and open source fits right in. And that was my point.

little insight (2)

GigsVT (208848) | more than 11 years ago | (#3952243)

There are more than just those "commons-based" motivations in open source.

I would even argue that isn't a main motivation.

Motivations to go open source:
1. Get your name out there

Something to put on a resume, a way to build relationships with companies who may later hire you.

2. Other people do some of the work

Whereas freeware might get your name out there and satisfy the first advantage, it does not allow other people to help you debug and build the work very much.

3. Makes money through contracts

Many people contract with open source developers to add features or fix specific bugs that have lingered. This benefits the company which spends way less money than on the closed source alternatives, and also benefits the programmer, by letting them take 100% of the money rather than some corporation only giving them a fixed paycheck. This 100% performance based reward system creates a very efficient marketplace. The programmer also generally gets to keep ownership of the added code, which is a plus.

Anyway, my point is, one doesn't have to believe in anything but selfish motivations, and old fashioned rational economic behaviors to see that open source is win-win for everyone involved.

Re:little insight (0)

Anonymous Coward | more than 11 years ago | (#3952552)

I think your'e on the right track. The piece-meal contributions by hobbyists fall-in line with "Co-opetition" theory by Nalebuff et al. (Also from Yale. http://mayet.som.yale.edu/coopetition/index2.html ) The open-src contributors fit under the category of "Complementor" as described in Nalebuff's book.

"If I contribute to the Linux OS, that will increase my value as **IX Programmer."

"If I help create a standard in the Java Community this will enhance my rep as a Java Architect."

Peter

I believe what he is saying...wrt coase. (3, Insightful)

Bobzibub (20561) | more than 11 years ago | (#3952246)

Coase described the size of the firm within the market, and claimed that with competition it would gravitate to the most efficient size.

So if one can call, for instance, the Linux kernel folks a firm, their fixed costs are fixed, but their marginal costs are zero. (barring Linus's scaling issues of course).

Marginal costs being the added cost of each extra unit of "firm size".

So organizations will scale to be quite big over the 'net because of low marginal costs.

And this is what we have witnessed.

I hope the paper has graphs. I like graphs.
-b

We're about to recieve a major whomping of irony.. (3, Interesting)

NoMoreNicksLeft (516230) | more than 11 years ago | (#3952251)

Anytime that economists start to see that maybe money/greed isn't everything, I get the creeps.

Which can only mean that asteroid will hit in 2019. Oh well, still 17 years left to party...

OS economics (0, Flamebait)

brain-in-a-box (168001) | more than 11 years ago | (#3952252)

...open source projects asan example of an emerging general model of economic behavior that is neither market nor company based.

I would conjecture that the open source economy is naivity and "my parents pay my bills" based.

Same ol' economy, new face. (4, Insightful)

MarvinMouse (323641) | more than 11 years ago | (#3952276)

Open-Source doesn't really attack corporatism as it does attack Mass-Production Media.

Software, Music, Movies, Books, etc. Are all money makers based on the fact that they can mass produce a product that people will pay for. On an individual basis, the $16 or so made off of a single CD, book or movie doesn't matter unless they can product millions of these $16 products and sell them.

With the internet though, it has opened the possibility of distribution of IP products for free or near free prices. Thus the business model of these IP companies is not applicable anymore without forcing the public to play by their rules by legislating laws into place.

The Open Source Movement has a weird effect of showing what happens when people can produce the same products and share it with everyone else, allowing them to improve on it. Before hte internet, when I coded a small program I could only share it among my close friends easily. Now I can share it with everyone, and if it is useful, everyone can contribute to it.

In a way it is like the folksongs from way back. Somebody thought it up, and shared it among his friends and family, or in performance, thus making his money from his actual work and not a 'photocopy' of his work. Then other musicians got it, and would play with it, producing even better music. Some of the great classical pieces are basically open source folk songs that have been improved upon by the masters. Since folk songs could easily spread by word of mouth, and didn't cost anything to spread, these songs became the equivalent of Open Source Music. Everyone was able to enjoy it, and no one had to pay anyone for the right to hear, see, learn or play the song themselves.

Now, we can pass programs, books, poetry and more using the internet and allow others who may be better (may be worse) then us to improve on them and create a better product in the long run. It's not a new economic model, it's just an old one coming back in a new form.

I heard once that people don't like change, they like things to remain the same as long as possible. I think it would be more correct to say people with power and money don't like change, and will go to great lengths to prevent it.

Some interesting thoughts.

No Need To Turn Economic Theory Upside-Down (5, Insightful)

istartedi (132515) | more than 11 years ago | (#3952279)

There's no need to mess with economic theory to explain Open Source. There's nothing new there. Each programmer, as a rational operator, contributes for a number of possible reasons. For example, they may value creative control and consulting opportunities more than they value a salary. In other words, someone who waits tables at night and codes for free during the day isn't necessarily a radical leftwing crackpot--as long as they are doing it for the future hope of consulting $$$ and/or the right to maintain control of their work (witness the not insignificant number of people who have un-Opened their work).

Corporate sponsors have rational reasons too. IBM doesn't support Linux to join the lovefest. They think it's better for some applications, they want to offer consulting for it, they don't like being tied to a proprietary vendor, etc. Any contributions they make are made because they realize it's the price of doing business under the Linux model--they would lose business due to bad PR if they didn't.

As for software being "special", there isn't any need to appeal to such an idea. Coffee is a good example. Generic not-so-tasty coffee is often given away in waiting rooms, hotel lobbies, places like that. Same deal with those little mints on pillows. Same deal with free samples at the grocery store (I've known people who make a meal of free samples on Saturdays at Fresh Fields). In all of these cases, software included, there is a rational economic model that has given rise to support for some free riders. People still have to pay for these products. The payers have deemed that they are better off paying the free riders, much as society has decided that some taxation is better than none.

The OSS model could be regarded as a "natural tax". Once again, there is nothing irrational about it. Advocates just have to realize that neither model is "superior". The free market sometimes moves us towards paying for goods directly. Other times it moves us towards indirect payment (somebody pays for OSS, because TANSTAAFL).

Of course, I doubt that advocates will stop advocating. There is a demand for politics just like anything else, and they supply it. It's just that I hate to see it when the supply-demand for politics pushes the supply-demand for other things out of equilibrium.

Re:No Need To Turn Economic Theory Upside-Down (0)

Anonymous Coward | more than 11 years ago | (#3952396)

Actually, open source probably has strong parallels in academic research in science and mathematics, where the general direction is towards the greater good for the particular fields, while allowing for due recognition of productive contributors.

Is software a cottage industry? (3, Insightful)

jlowery (47102) | more than 11 years ago | (#3952295)

Perhaps we're seeing the reemergence of a cottage industry in software development.

Back in previous centuries, whole villages of craftsmen and women would do finishing work on mass-produced pieces that were then sold by a large retail company. The garment industry still operates this way in many instances.

As long as software remains a craft rather than a formal engineering discipline (it has elements of both, but each software project is pretty much unique to this day), then the economics of software will probably most resemble the crafts industry rather than industries based on mass production.

Re:Is software a cottage industry? (1)

david_christie (19052) | more than 11 years ago | (#3952500)

I like this characterization of software production as a cottage industry. (Maybe because I program in a cottage.) Over 25 years as a programmer I have witnessed the unending quest by management types to deskill the software engineering process -- unsuccessfully. The cottage industries that the industrial revolution wiped out fell victim to the possibility of deskilling them. Let's hope software proves to be an art form, like music or writing, that endures all attempts to make it an assembly-line process. To that end, we have to be careful in our choice of tools -- are they designed to unleash our creativity and automate tedious tasks, or do they simply impose management strictures and create new forms of tedious work? Similarly, the architectures and platforms we buy into. At least as open source developers we generally get to choose (and build) our own tools.

Blah Blah Blah (1)

Ravensign (134410) | more than 11 years ago | (#3952372)

I started to read and maybe I am jaded, but when I hear the dawning of the new "pure" culture of ideas and intangibles over material good, I just hear "blah".

I am a mortal, material being, and I don't see any kind of glorious end to materialism, to be replaced by a utopian "economy of ideas".

Academic Blinders (2)

jamesmartinluther (267743) | more than 11 years ago | (#3952407)

"I call this mode "commons-based peer-production," to distinguish it from the property- and contract-based models of firms and markets. "

Commons-based peer-production? How about an enjoyable hobby?

While the focus of academic specialization has contributed countless practical ideas to our civilization, people have a very hard time working in new concepts within any given academic paradigm. Why is so uncomfortable for an economist to work in the concept of people having a hobby into his specialty?

Academia needs to work on some intellectual APIs that allow for a more practical invocation of "foreign" concepts within any given specialty. Otherwise, we will continue to slide into the cellular isolation of Vinge's "focus".

- James

Re:Academic Blinders (2)

William Tanksley (1752) | more than 11 years ago | (#3952438)

Because a hobby is FAR from the only way of gaining the result we're discussing. Many open-source programs are initially written as a hobby; but much work on them is written as part of a company.

There's no need for him to look at just one of the many diverse motivations possible; the goal is to look at the results, and check whether they're sustainable.

Hobbys or no hobbys.

-Billy

TROLL! (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#3952454)

someone mod the parent down, please.

massively huge troll

specialization (2)

bob_jenkins (144606) | more than 11 years ago | (#3952444)

We humans have come so far, it's difficult to put a new idea into practice anymore without making specialized contributions on top of a mountain of work of others. And it's hard to pin down where the good ideas are going to come from.

Corporations keep their mountain of work secret, so only their employees can build on top of it. Often they're even more restrictive, the only person allowed to build on top of any piece is the person the company assigns to own that piece. Open source in general, and Linux in specific, make the mountain of work public. Anyone can contribute anywhere they see fit. The pool of potentially inspired and motivated people is just so much bigger.

There's no reason to limit that to software. I hear progress in steel manufacturing follows a similar pattern. The steelmaking process is public. Whoever gets an idea finds an existing steel company and tacks it on.

The real trick, economicowise, is to allow motivated people to do what they want to do and monetarily reward them for doing it.

Before You Make a Hotheaded Reply... (2)

al3x (74745) | more than 11 years ago | (#3952461)

...check out his disclaimer:

"One important caveat is necessary. I am not suggesting that peer-production will supplant markets or firms. I am not suggesting that it is always the more efficient model of production for information and culture. What I am saying is that this emerging third model is (a) distinct from the other two, and (b) has certain systematic advantages over the other two in clearing human capital/creativity. When these advantages will outweigh the advantages that the other two models may have in triggering or directing human behavior with relatively reliable and reasonably wellunderstood triggers of money and hierarchy is a matter for more detailed study. I offer some lines of understanding the limitations of this model of production in Part III, but do not attempt a full answer to these questions here."

So does your blustering comment about "the realities of the marketblah blah blah rabble rabble" seem so worthwhile now?

Cause I can't do it along (2)

bluGill (862) | more than 11 years ago | (#3952484)

I'm a fairly smart guy, and I have a degree in Computer Science. It is reasonable to assume that I can write and OS from scratch, throw a GUI on it, write my own web browser, and word processor. However to do the above all on my own takes too long. I'm not satisfied with with the commercially avaiable equivelents that I can afford so ecconomics suggests that I will do something else. Since it would take me years to write all the above (1 year each for minimal: os, compiler, GUI, gui toolkit, device drivers... working full time).

I can do it though. However by using open source I can get help. Linux/*BSD are good OSes, by starting with them I can take a good network stack, and replace the schedular with one that is better, and have a good OS. In the mean time someone else can fix a bug I haven't seen yet in the network stack... If I don't like my desktop, KDE/GNOME are good starting places to make things better, without spending years getting to where they are first. And they provide things I consider nice but not critical that I would never touch on my own.

Open source makes sense, so long as I have income, and there is something I need that I can't get.

Slashdot (5, Interesting)

tmark (230091) | more than 11 years ago | (#3952487)

I seriously doubt that we are ever going to have a completely "economic" explanation of open-source. I can't see an integrated explanation of the phenomenon without significant reference and fallback to psychological/ego factors.

Of course, many open-source advocates are wont to believe that this proposition is false, because to believe so is a tacit admission that some (but not necessarily all) part of their motivations involves the (some might say shallow) gratifications that comes for leading something, or from having their name "known" and praised, or even, from following someone else - it's an admission that we crave peer-approval/recognition. Now, you can assign economic utilities to this sort of peer-gratification, but that means the economic theory MUST fall back on a psychological theory.

Just look at the case of Slashdot, which is discussed at some length in the paper. There's NO way to explain why people contribute lengthy posts from a purely "economic" viewpoint and without reference to very subjective terms. You can't get a job or contracts because of your insightful Slashdot posts. You can't make business contacts through Slashdot posts.

What would happen if Slashdot were anonymized, or if changes were made so that people couldn't receive gratification from moderation ?

Imagine that Slashdot started running threads, sorted and nested as they are now, but with NO moderation totals and NO comments ("Funny/redundant/Interesting/etc"). I bet that posting would become much less popular...but I can't see how you could explain that without psychological reference. It is clear that many if not most posters derive significant psychological gratification from getting the "pat-on-the-back" of an up-moderation and "Interesting" tag...But is there an economic explanation ?

Similarly with the notion of karma. I've gone on too long already, but suffice to say I can't see how you can explain how carefullly many users tender to and monitor their karma without capitulating to the notion that they derive significant gratification from peer-approval.

We may seem shallow for it, and hence we might not want to believe it, but I think it's true.

Bandwidth shortage is about to stomp P2P (4, Interesting)

joneshenry (9497) | more than 11 years ago | (#3952523)

Ironically this article may be an example of how opinions expressed in more establishment-oriented formats such as journal articles are being made obsolete by rapid change. I'm not going to write 100 pages about how every one of the article's points is inaccurate, but let's just take one popular example of file-sharing and P2P networks. Napster occurred at the time of an exuberance that consumer bandwidth was going to increase exponentially forever. In the wake of the continuing telecom industry collapse, this assumption is no longer valid. With the current American administration, the Federal Government will not be pursuing the historically proven method of building out the last-mile infrastructure, the equivalent of the rural electrification effort. Instead of increasing choice and value per dollar, the US broadband industry will under of the direction of FCC Chairman Michael Powell consolidate into a few cable and Baby Bell monopolies which will shortly impose steeply metered bandwidth charges to consumers for monthly usage over a small amount, say 1GB. This will remove any "slack" bandwidth for file-sharing that would have been available from US consumer broadband users. This is especially important for P2P file-sharing type systems because research has indicated that file-sharing is facilitated by a relatively small group of high capacity super-nodes. The other source of super-nodes has been college students using university bandwidth. But the telecom industry collapse is causing a tremendous reduction in state revenues. The states unwisely planned their budgets under the assumption that the stock market boom would exponentially increase revenues forever. It seems likely to me that states will preserve K-12 school budgets, forcing even deeper slashes in funding for state universities. I expect state universities to impose much more stringent limits on students using bandwidth for non-academic purposes.

Consumer P2P file-sharing will shortly be history.

Re:Bandwidth shortage is about to stomp P2P (1)

TheCanuck (56207) | more than 11 years ago | (#3952606)

Some excellent insight. The Internet is directly affected by many industries, specifically the telecom industry, which is going through a shakeout. The weaker telecom companies are going bankrupt and are certain targets for industry consolidation. With consolidation comes economies of scale in providing data services, dropping costs and eventually making the industry stabilize costs and become profitable.

However, with consolidation we (Internet users) run the risk of business model changes that could start a pay per usage access system as joneshenry stated. This could also stifle innovation and make Internet access as bland as current telephony.

As usual the USA creates an impressive technology and the rest of the world expands it and further refines it to make it better and even more useful.
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