No Business Like Bad FOSS Business

In response to Bruce Byfield’s article on how We shouldn’t feel bad when businesses have no morals. I feel compelled to point out the flaw in his logic and hopefully add some sense to why moral outrage is the correct response to unscrupulous behaviour by companies.

It’s not a surprise when companies are inconsiderate/naughty/evil, but that doesn’t make what they do any less wrong and it doesn’t make a negative reaction any less justified. The most important thing to remember as a consumer is that your aversion to certain behaviours of others directly affects your willingness to engage in business with someone. To put it another way: What we think about a business being bad, effects their profit. Just ask BP or Toyota.

The purpose of a corporation is to fulfil all of it’s responsibilities. It’s responsibilities to it’s capital investors is to maximise the return on their capital investment through profits, but it’s responsibility to their employees is to pay them the contracted amount. Two conflicting responsibilities… and yet somehow companies manage to balance them.

To list just a few possibly conflicting responsibilities that all companies have: Shareholders to extract profits, employees to pay, business to continue, customers to serve, environment to maintain, suppliers to pay and even maintain, society to improve and government to appease. Here’s Bruce Schwartz doing a much better talk on why scruples are a good idea.

When a company hurts the FOSS ecosystem (in this case Novel), it’s neglecting it’s responsibility to maintain it’s suppliers, it’s hurting it’s relationship and ability to serve it’s customers and it’s endangering the continuation of it’s business. We don’t even need to bring in it’s possible legal responsibility to know that what Novel did was damaging and wrong. Yes I used the word ‘wrong’, because sometimes there is a right way and there is a wrong way to “maximise profits”.

Having a social responsibility shouldn’t be impossible for companies and we shouldn’t put up with companies that have the audacity to claim it isn’t their responsibility. Too often they hide behind “My responsibility is to the share holders” which is about as nonsensical as looking after sun, but not the earth.

If your business has short sighted, profit motivated share holders, my advice is to get rid of them as soon as possible. As a business owner you don’t have to take up extra responsibilities of having investors…. No wonder Canonical and Facebook don’t want to float on the stock market, I know I wouldn’t want to have share holders in the current ethical climate.

Your thoughts?

17 thoughts on “No Business Like Bad FOSS Business

  1. “If your business has short sighted, profit motivated share holders, my advice is to get rid of them as soon as possible. As a business owner you don’t have to take up extra responsibilities of having investors…. No wonder Canonical and Facebook don’t want to float on the stock market, I know I wouldn’t want to have share holders in the current ethical climate.”

    But Canonical is led, bulled and manipulated on a daily basis in every single decision it makes by its only shareholder. Mark Shuttleworth is the self-acclaimed dictator of his own aims, Canonical is his puppet. Maybe it works, maybe it is even good, but shareholder he is, and his views are fully and vocally expressed in company decision-making.

  2. Martin I totally agree, when organisations start behaving unethically they should be called out on shady practices. Many years ago I bought a video card from a small chain store that offered free installation. I mistakenly took them up on the offer and discovered that they replaced my more expensive RAM with cheaper RAM. At the time I had 60ns Non-EDO 72 pin RAM which was pretty rare, most non-EDO was 70ns, they replaced it with EDO. While EDO was faster I could have bought twice the amount of EDO if I sold my 60ns non-EDO RAM. When I confronted the company they first tried to sell me the line that the EDO was faster. When I said I wanted my RAM back (pointing to it in the sales shelf) they told me to “prove it.”

    At the time I really didn’t know what to do, I never thought that the company would steal from me, especially since they had a few locations. If I really had sense I probably should have called the police, reported them to the better business bureau and wrote an article for local papers warning people to check their computers when they took them into shops. I didn’t do any of these things.

    I suppose I did get some satisfaction years later when I saw that not one but two of their locations closed down.

    The event had such an effect on me that years later when I started running a computer refurbishing project one of my “commandments” to volunteers was that if we had to replace anything defective always give the client back their old hardware!

    Sadly the company that ripped me off does still have a few locations running in Canada, but over the years I know they’ve lost tens of thousands of dollars in sales because they decided to swipe my RAM. Shortly after the event I helped a couple of companies upgrade their systems, needless to say that company wasn’t on my short list of places to buy from.

  3. “responsibilities to it’s capital investors is to maximise the return on their capital investment through profits”

    That’s the sticky point, and the only way to address it properly is to give it a timeframe. You want a profit in a few months? I’ll probably have to cheat my customers and other nasty things.

    You want to still be making a profit 100 years from now? I’ll have to be careful not to pollute my neighborhood, treat my customers well, pay my suppliers on time, make my place one where good employees want to work, and pass off this sense of stewardship to my successor.

    The quick buck hurts us badly.

  4. I concur.

    I’m going to set aside the author on this one, and focus on the corporation, which ultimately decides what to publish and what not to publish. This article is from the same corporation that publishes the FUD we’ve seen recently about Ubuntu. (Google “Ubuntu myopia” for the most recent example). The culprits: QuinStreet Inc., an advertising company likely heavily vested in all things monopolistic and corporate.

    I sense a trend here.

  5. I think we need to wait and see. After all, the 882 Patents that everyone is making a fuss about, may be patents that are meaningless to FOSS, or have negligible impact on FOSS.

    Plus, I think both the article, and your response are correct to a point. The corporations are going to change their course depending on the “corporate mood” (whether that be who is in charge of the boardroom or what the consumer is wanting more). And in the case of Novell, they weren’t making a profit anymore. So, they either had to take the best offer presented to them or risk going under (granted it may have taken years, but it could have still happened).

    Until we see a list of the 882 patents, and can actually determine their impact on FOSS, we shouldn’t throw stones. Because if they’re 882 patents on how to computer-control your kitchen sink faucet, the FOSS community is going to look pretty bad. (sarcastic humor intended to reflect that they could be totally unrelated to anything that FOSS is interested in pursuing)

    Have a great day:)

  6. @Cynick, at least you know where to send the emails if you want to shake your fist. although I admit I’d prefer a good non-profit chartered corporation.

  7. Bruce Byfield is correct and his logic is not flawed. Moral outrage is not the correct response to corporations corrupt behavior because moral outrage doesn’t solve any problems. Bruce points out that the only motivation that really matters for companies is money. If money isn’t the highest priority for a company, then they won’t be in business for very long.

    I think though Bruce doesn’t quick understand the difference between Free Software and OSS. I think his article should remove FOSS and just use OSS. Once the distinction is made, then is article makes more sense.

    The whole point of OSS is to allow source code to be open. This is just a software technique. He makes a reference about M$ and surely they are dabbling into OSS but they are definitely not developing Free Software. If companies are to develop free software, then they are giving away their IP and so cannot maximize their profits; they will die.

    Free software is a movement that is anti-capitalism and anti-monetary system. The founders of the movement might disagree with this position; however, the results of the movement to me are clear. For humanity to continue to exist, the free software model must be employed throughout our society or humans will destroy themselves.

  8. “It’s normal for companies to be amoral” from the same school of thought that gave you “Of course governments should be corrupt, why would you want to change that?”

  9. @Conzar – I disagree, Free Software and Open Source differ in tone and only fringe differences in the actual content. They are almost identical. Free Software isn’t anti-money any more than the public park is anti-money. The point is to have economics match up with the nature of software and the ethical implications of it’s restrictive licensing.

    Your thinking of FOSS is way too black and white. Red Hat develop Free Software, almost all of it is GPL or LGPL, are they dying?

    You mistake difficulty of moving from extortion to honest business as a sign that honest business is anti-capitalism. Conflating several different threads into one.

  10. @doctormo here is what the FSF has to say about the differences between FS and OSS

    The public park is also anti-money. It strips the “right” of people being able to charge others for the use of the land.

    Red Hat’s main development effort is proprietary. They have an entire licencing effort to ensure that their IP is protected. If Red Hat were to develop pure free software, then they would die.

    Honest Business is a fallacy. Money drives people to do abhorrent things. That includes denying people service because they cannot afford your offering … this in and of itself is inhumane.

  11. @conzar – Not very hopefully on morality of humanity, are you. It’s ok Conzar, I don’t think you’re right about either Red Hat’s business (which seems to produce Free Software as a toxic waste product perhaps), or that the ability to be immoral and prevent others from accessing a common good, is somehow ‘a right’ which is a much bs as I’ve ever heard. It should be called ‘a wrong’ to charge to access parks.

    Economics isn’t about incentive people to do things they wouldn’t normally do. You need to extract that out of your head because it’s only going to make you depressed (and wrong on issues such as this). Business’s first reason for being allowed the good grace to exist at all is to serve the public, we may offer them ways to survive and even offer their capital investors nice treats. But in the end as a society we’ve decided that the world is a better place with businesses running than not running.

    “You’re just not thinking 4th dimensionally”

  12. @doctormo “Not very hopefully on morality of humanity, are you.” The most recent human history, humans have been engaged in border disputes, war, and genocide. The largest amount of resource of the early 20th century went into creating a weapon of mass destruction which was deployed on civilians twice! There are also billions of people in the world that are in poverty while the top elites live an unimaginable life of luxury. Humans are destroying their eco systems, poisoning their foods, genetically modifying plants to destroy themselves and not bear seeds, and really the list of abhorrent corrupt behavior can go on …

    “prevent others from accessing a common good, is somehow ‘a right’”
    It’s called private property. The concept came about when humans developed agriculture and has been the bane of man ever since. I quoted “right” because I view the entire earth as public and should never be owned by any individual nor corporation.

    “Business’s first reason for being allowed the good grace to exist at all is to serve the public, we may offer them ways to survive and even offer their capital investors nice treats. But in the end as a society we’ve decided that the world is a better place with businesses running than not running.”
    Who allows business’s to exist? There is no democracy in any country in the world that I am aware of. So when you say “we” decided that the world is a better place with businesses running than not running, when was this vote taken place and who got the chance to vote?

    Meaning, society has been setup not by the people, but by the wealthy powerful elites. Its the golden rule, those that have the gold, make the rules.

  13. “Who allows business’s to exist?”

    We do.

    “There is no democracy in any country in the world that I am aware of.”

    No government, no oppression has ever been conducted against a people who did not accept it. We the people put up with bad government, we the people shouldn’t stand for it. That’s the problem, your too cynical to be hopeful that people do have power, can do something about it and are willing. You’re wrong about humans.

  14. Vote with your dollars. I do.

    I stopped using Windows at home when they stopped honoring my wishes to control my PC. Over the years I have seen the company responsible for .NET do some horrific things in their quest for profits via reoccurring billable events. The solution was simple, stop using them. This is Ubuntu’s mistake going forward as well as mono and Waywend (sp?) will jump to the tune of .NET. History teaches those that pay attention this truth.

    Only give your business to those companies that EARN IT! Value your TRUST and they will start too.

    Same with credit(pay cash).

    Same with automobiles (buy used).

    Same with Internet broadband (move to one of the 30 synchronous FTTH US communities), banks (drop large, switch to small/local).

    Same with cell phones (switch to Skype VoIP…less than $100 per year is wonderful), same with gas/oil (purchasing electric vehicles in 2011 for all local driving…and a $6000 vertical wind electric generator that will feed an entire house’s electric needs will insure that my largest future costs will be battery replacements..still cheaper than monthly payments).

    The point is their are OTHER viable options and solutions out there but you may need to drop your skeptical assumptions and revisit the topic.

    Take the electric cars, being able to charge it off the grid, abilities to go 40 – 60 miles and 70mph on a single charge OR 60 – 100 miles at 45 mph on a single charge is huge. These are new developments as of 4th quarter 2010. These are radical game changers that will allow you to deny the corporations your hard earned dollars going forward.

    As for corporate issues because of Citizen United vs FEC, stop voting for Republicans, find out which Democrats were among the 40% that did not want laws for corporate disclosure of campaign contributions. Avoid pro-corporate Libertarians and be very wary of tea party candidates that do not understand that the Boston Tea Party was about American jobs and thus will be easily influenced by corporate lobbyist money. Laws like those in Minnesota where even 100% of Republicans voted for them should be applied nationwide. Use products from corporations whose board of directors, CEO, CTO, etc live in your community with you…that way they will be vested in your community’s future.

    Be wary of any person or party that proposes changing any Amendment to the Constitution give the current level of corruption in the American political system today. No matter what they say, it will end badly for all of us. Our founders were creating something to last for generations, if we could hold onto it…few if any current politicians hold themselves above the corruption and they could if they had the will power and convictions to do so, but most do not.

    Stop doing business with companies that hurt you, your family, your neighbors, your community. Take the large banks unwillingness to assist home owners at re-negotiating their home loans, even after being bailed out. I closed all my bank accounts (over 4 accounts) with those large customer no service institutions, did you?

    Why not? Vote with your dollars, and here is the most important thing, never, ever do business with them again. Tell your children, tell your relatives, tell your friends, tell your neighbors.

    Let them pursue someone else’s hard earned money, deny them yours. It is the only way and it keeps it simple.

    To do less is to sell yourself and your family down the river, there is literally no sense or cents in that. Never think you do not make or can not make a difference…that is what they want you to mistakenly believe.

    What are you local politicians doing to make your family’s life a little better? In most communities they are not even trying, get rid of them and find an honest person to run for office, your children will thank you.

  15. I try to buy products from ethically behaving companies. You don’t always find one for the type of product you are buying, but it’s better to do your best (or good 🙂 than to do nothing because you can’t be perfect.

  16. @Iammaper

    From TVP FAQ:
    “Even with the election of men and women of impeccable character into government, without available resources and advanced technology, war, poverty, and corruption will prevail no matter how many new laws are passed or treaties signed. ”

    Also, the USA was founded by an elite group of white rich land owners who most of them owned slaves. They setup the constitution to protect their own interests, not the interests of the common people.

    As for money: TVP FAQ
    “If all the money in the world were destroyed, as long as we have sufficient arable land, the factories, the necessary resources, and technical personnel, we could build anything and even supply an abundance. During the Depression, there were vacuum cleaners in store windows and automobiles in car lots. The Earth was still the same place. There was just no money in people’s wallets and very little purchasing power. At the beginning of World War II, the U.S. had about 600 first-class fighting aircraft. We rapidly overcame this short-supply by turning out over 90,000 planes per year. The question at the start of World War II was: Do we have enough funds to produce the required implements of war? The answer was No, we did not have enough money or gold, but we did have more than enough resources. It was the available resources and technical personnel that enabled the U.S. to achieve the production and efficiency required to win the war.

    It appears that the real wealth of any nation is in its natural resources and its people who are working toward a more humane life-style through the elimination of scarcity. All social systems, regardless of the political philosophy, religious beliefs, or social mores, ultimately depend upon natural resources — i.e. clean air and water and arable land area — and the industrial equipment and technical personnel for a high standard of living. The money- based system was designed hundreds of years ago and was hardly appropriate for that time. We still utilize this same outmoded system, which is probably responsible for most of today’s problems. I have no doubt that even the wealthiest person today would be far better off in the high-energy society that The Venus Project proposes.”

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