DoctorMo's Blog

So many people have attempted to describe, explore and probe the economic workings of the Free and Open Source Software business. Recently Nick Fox has given us his thoughts on what this means.

And this is my critical article explaining why he is wrong, sorry Nick got to be critical. The first half of the article is fairly correct as far as I know. so I’m just going to skip to the bad parts:

Commercial software being generally closed source is a necessary evil.

This assumes proprietary software is the only model for profitable commercial software. It is not. It also assumes that FOSS can’t possibly be commercial, a big mistake and a common myth. You can take a copy of a GPL licensed program and sell (that’s right, for money) the software to someone. So long as you don’t remove the recipients freedoms and they get to redistribute, that may sound like it crushes your commercial opportunities and it does sort of, but I’ll get to that.

However creating software as a business requires a level of production protection that is not usually accepted in the Linux circles. Compiled and protected sources are a bad thing for software freedom and progress, however they are good for free market business.

This part floored me. The idea that proprietary software could be in any way free market is so absurd that I can’t understand how this idea has come about. The nature of the free market is that goods or services will be priced very close to the costs of replication and distribution when supply is above demand, software had infinite supply and will always be above demand.

The costs of software replication and distribution are very close to zero. So in a free market, all software is free of cost by order of the invisible hand. What is NOT free of cost is the creative production. But because the creative industries can not yet find a secure way of funding their production; they have gotten government regulation (copyright) to warp the nature of the free market to create temporary monopolies on distribution instead. Shifting costs around. And if you’ve been following your economics, a monopoly will tend to price things at the very maximum a customer is willing to pay, not the minimum it’s economically sustainable to charge (as in the free market).

The separation of first creation and replication of copies, I think is important to understanding the nature of these economic processes. Writing software is creative production, copying software is replication production, they are not the same thing.

So, what we have here is an industry that is not only removing user and developer freedoms, but it’s doing it at the expense of the free market too. On the other hand, FOSS is free market, it doesn’t claim to have created an economic rewards system to drive the cost of one economic activity into another one. It’s goal is to create a social and legal framework for collaboration. The software production is priced accordingly through commission or (more normally) through the needs of the user’s time and the distribution is priced very close to zero.

The incentive to make money inside the Linux community will help to break the cycle. When businesses find there is money to be made by producing Linux based applications for busness users, it will help bring Linux to more desktops. While I very highly advocate the Free and Open Source movement, I am suggesting that closed source software for sale does have it’s place, and in fact may help bring Linux to more desktops.

I recommend watching this video on motivation first:

As we’ve already discussed, there is money to be made from FOSS, it’s just you have to follow the economic landscape. You can’t go begging on government to bail you out of your unprofitable software distribution business with anti-free market copyright laws. You have to make your money from the development of software, not the distribution of it. This shift in thought needs to accompany the shift to FOSS, because without it FOSS will be uneconomic in the old mindsets.

Closed, proprietary software has no place in a rational, enlightened, scientific and honest economic world. It is NOT a necessary evil, it is a plain misunderstanding of economic mechanics. An attempt to create rents on distribution instead of maintaining the economic costs of production. It’s is not good, useful or progressive and the longer we hold onto some of these mythologies the longer it’s going to take to drag our industry out of the dark ages.

My own thoughts are that in order to fund software production properly, we need to have ways of getting money from users who want software to be made or changed, to programmers who want to earn money writing software. It’s not an easy task.