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Free Can Mean Big Money - The Open Source Economy 494

Gentu writes "People are always accusing Open Source proponents of being communists, but an editorial by the OSNews publisher, ex-Red Hat employee David Adams, takes a critical look at whether Free and Open Source Software is really anti-capitalistic or is, in fact, only a product of the free market at work. Does wide availability of high quality, low cost software harm or help the world's economy?"
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Free Can Mean Big Money - The Open Source Economy

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  • by epod ( 726223 ) on Monday August 16, 2004 @05:16PM (#9984927)
    That whole thing assumes communism is in any way bad... It's biased to begin with.
    • That whole thing assumes communism is in any way bad... It's biased to begin with.

      Quite commie!
    • This is also the first time I have ever heard anyone refer to open source as communisim.
      Just because something is shared does not make it communisitic (i.e. free public libarary, our road systems, a kibbutz, public water fountain, etc, the Internet).
      A very liberal use of the word communism to say the least.
      There are pro's and con's to everything - luckily in this country - we have a choice ---- hmm kind of different from communism
    • People think Communism is bad because it didn't work.

      Some may argue that the USSR, etc., wasn't "real Communism" but then the question remains: why wasn't it? Do traits of human nature (especially of those inclined to seek power) make such ideals unachievable.

      In any case, I think an economic argument in support of free software would carry more weight coming from someone other than "OSNews publisher, ex-Red Hat employee David Adams."

      • One large one is the human nature of stupid and weasely people. Not of all people. The essentials of communism (arguably just extreme socialism) has existed many many times throughout human society: Very small nations, Native American tribes, Mormons were originally so communal it was damn near communist. The one thing in common they all had with eachother? They were small, very small. When it's small enough that when you're lazy you see somebody else starve, you're less likely to abuse the system. W
        • by coldmist ( 154493 ) on Monday August 16, 2004 @07:21PM (#9986112) Homepage

          Mormons were originally so communal it was damn near communist.

          Two fundamental differences between the Mormon's United Order and communism are (1) Mormons who wanted to join the United Order voluntarily gave their means/property/output to the Order, whereas in communism, it is taken from him by force, as others on the list have pointed out, usually with an AK47 to his head. And (2) if a person was lazy, in the United Order they were put on probation and then kicked out if they didn't work. No so with communism.

          Force vs choice. Work vs indolence.

          Rather fundamental and critical differences, if you ask me.

          For another practical example, study up on the first colonies settled in the New World. They started out as a communal society (crops, etc), and after the first winter, switched to a private-property-driven capitalist society. The Governer had some interesting words to describe the difference from the first year to the second!

        • The open source community is not communist. It's a folly to even mix the terms that way. Communism is an economic system, just like capitalism. Open source development is not an economic system in itself, because it doesn't really have a unique way of distributing or allocating resources.

          By and large, open source work is done as a branch of capitalism (give away the code, make money off services), or as a beneficiary or capitalism (don't need the money, give away the code). Open source developers do not s

    • by waterwheel ( 599833 ) on Monday August 16, 2004 @05:34PM (#9985112) Homepage
      Open source software is the culmination of capitalism. When you've got your choice of various answers, and (generally) cost is not an issue, then only the strong survive. That kind of Darwinian process isn't communism at all. Plus, open source software (and particularly as it relates to the web) IMO makes all sorts of capitalistic ventures possible. On the web you're as big as MS or Wallymart - and you can get started in your basement on a shoestring using opensource software. What would apache cost if you actually had to pay what i'ts worth? Instead you can get a $10 hosting account ('cause the webhost didn't spend any money on software), throw up an OSS shopping cart or templated website and voila - you're online and making money. If OSS software wasn't as good as it is and free as in beer, there'd be a lot fewer starter/seed companies than there are. How many people are running their own business now that they couldn't have done 10 years ago? How many of those are running OSS software? How many would have had problems if they would have had to start off with $10K in software costs? Lots - that's how many. Mine included. I'm a capitalist, and love OSS because of all this. Help keep the competition fierce!
      • by The Mgt ( 221650 ) on Monday August 16, 2004 @05:45PM (#9985210)
        Free market economics and capitalism are not synonymous. Capitalism, basically, is feudalism with money instead of land, usury instead of feudal service. You could dump capitalism and the market would still exist.
      • Exactly. In capitalism, I don't care anything about who is offering the product. I don't care if MS or Redhat makes a profit, just like they don't care if I get screwed on price or not. When BG or whoever wants some sort of intervention to 'protect' his workers, then they benefit while the consumers and potential competitors are screwed. Usually more people are screwed than benefit. Of course if you are the beneficiary then you don't mind. Capitalism creates the best environment for consumers. Then you ha
  • by Anonymous Coward on Monday August 16, 2004 @05:16PM (#9984932)
    it may be good for world economy but may not be good for US corporations which control US govt. US govt, in turn uses its sole superpower status to control other states and so on. Effectively, "if it ain't good for US Corp., it isn't good".
    • Exactly...this kind of thinking keeps those currently in economic power where they source is about empowering a completely different set of people. If Open Source becomes the dominant form of software, certainly the total money pile for software will still be will just be distributed much, much differently than now (i.e. Microsoft has 99.9 percent of it.)
    • by kjd ( 41294 )
      IBM makes big bucks from WebSphere Application Server licenses at our company. Here's some snippets from the first half of its license.txt file:

      IBM HTTP SERVER AND THE APACHE HTTP SERVER: The IBM HTTP Server component of the Program includes software developed by The Apache Software Foundation ( The portions of the IBM HTTP Server which are based on software developed by The Apache Group for the Apache HTTP Server are Copyright (c) 2000 - 2003 The Apache Software Foundation. All ri
  • by gosand ( 234100 ) on Monday August 16, 2004 @05:17PM (#9984938)
    The poster says: Does wide availability of high quality, low cost software harm or help the world's economy?

    This of course assumes that OSS = high quality. That is definitely NOT always the case. OSS is just software, and can be good or bad quality. That being said, talk amongst yourselves...

  • huh? (Score:2, Insightful)

    by Anonymous Coward
    Does it even matter if it hurts the economy? That's what capitalism is all about. Screw the other guys; if the consumer wants my cheaper product over theirs, then I win.
    • Re:huh? (Score:3, Insightful)

      by KarmaMB84 ( 743001 )
      I doubt capitalism is all about destroying the market so nobody, as in not even you, can compete anymore.
    • Re:huh? (Score:3, Interesting)

      by geomon ( 78680 )
      I agree.

      Those bright lights you see illuminating the night sky over Las Vegas are powered by the spinning of Adam Smith's body in his grave at the mere suggestion that we protect a market from competition.

      The anti-capitalists are those who have never read Smith's tirades against corporate interests who use the government to protect their markets.

      More [] stuff Slashdot didn't publish.
  • BusinessWeek on GPL (Score:5, Informative)

    by prostoalex ( 308614 ) on Monday August 16, 2004 @05:18PM (#9984942) Homepage Journal
    There's a BusinessWeek article today [] advising the Linux community and those in product development to drop GPL and release under BSDesque licenses in order to stay more business-friendly.
    • by FunWithHeadlines ( 644929 ) on Monday August 16, 2004 @05:22PM (#9984976) Homepage
      There's a BusinessWeek article today advising the Linux community and those in product development to drop GPL and release under BSDesque licenses in order to stay more business-friendly.

      ...and a Groklaw article [] demonstrating why the BusinessWeek author should have done more research first.

    • by Zangief ( 461457 ) on Monday August 16, 2004 @05:29PM (#9985061) Homepage Journal
      The 'B' in the 'BSD license' means Berkeley. It refers to an University. This University business is not to produce software, but to educate, research, etc.

      This means that they do not care what happens with the software produced by them. They wish that people use it, and put almost no barriers to this purpose. This means, in the business context, that modifications done tho the software ARE NOT GIVEN BACK to the comunnity, whatsoever. This makes sense to greedy business house (Microsoft backs FreeBSD's license as "True free software")

      GPL makes sense to the programmer, whose business IS producing software, because if you modify a GPLd software, you have no obligation to give it back. But if you modify it AND distribute it (ie, you sell it), you must give it back to the world, under the GPL.

      To the programmer, BSD makes no sense. It may make sense to the Universities. Stick with GPL and LGPL
    • Screw business-friendly. I'd rather be people-friendly.

      I'm a person, not a business, so that's part self-interest.

      Most people are people first, businesses second, so it's part humanitarian.

      I suppose, however, something called "Business Week" is going to prefer the businesses. Screw 'em both when their interests conflict with human interests.
  • by danielrm26 ( 567852 ) * on Monday August 16, 2004 @05:18PM (#9984946) Homepage
    ...that you can still sell services based around that free software.
    • by Anonymous Coward
      You could make confusing software and then charge people to help them understand it...
    • some people didn't study to code to answer the phone
    • by Kenja ( 541830 ) on Monday August 16, 2004 @05:44PM (#9985195)
      "... you can still sell services based around that free software."

      And so can anyone else. While you, the devloper, have to recoup your devlopment costs. Another group (say Redhat to name a company at random) can undercut the cost of your services with their own since they have zero dollars to recover. Thus the developer gets put out of buinsess and all we have are people working for free and large companies selling services. Not a utopia of software engineering in my opinion.

  • by cytoman ( 792326 ) on Monday August 16, 2004 @05:19PM (#9984955)
    ... how much of the money companies make trickles down to the volunteer coders of OSS?
  • For those of us who won't RFA, the synopsis might be:

    "OSS is good for the economy because it raises the opportunity cost of using free software over paid for software. Never again will you have to pay for an Outlook-type program for Windows over it's free version. As a consequence the quality of output from the software industry is raised, thus promoting competition over monopolistic practices"

    Was I right? Should I read it now?
  • by p0 ( 740290 )
    Think about all the money educational institutes, medical centres and so forth are saving by moving towards open source. They are able to invest these funds in various other departments such as research, human resources and so forth.
  • Open Source defiantly means free money to some of the "Capitalist Pigs" that fold parts of it into proprietary commercial packages or bundle apps with proprietary commercial packages. There are without question commercial companies abusing the GPL / BSD licenses. Of course, while one might suspect, it can be difficult to prove.
  • Entry into markets (Score:4, Insightful)

    by ImTwoSlick ( 723185 ) on Monday August 16, 2004 @05:22PM (#9984991)
    OSS can help small businesses get the foot in the door when trying to enter into a competative market. When every penny counts, OSS is a big way to save money needed for startup costs.
  • by Amiga Lover ( 708890 ) on Monday August 16, 2004 @05:23PM (#9984996)
    Linux is not Just One Big Thing.

    Just because you go into a linux service business does not mean you have to support ALL linux systems and run into spirals of madness therein.

    Make your own. Make it specifically yours. Make it free to the world if you like, but also make it so you only do paid support for the system from people who have your exact defined distro.

    You're in a service business, not a software business then. It doesn't matter if people copy your software, or improve on it, or spread it worldwide. You still provide services to your customers. They still pay you to maintain.

    That';s the bit most of the big boys don't get. "The software is free! Free for anyone else to use! Free for all! Free and they can copy it!". True. But you the service company knows that your services are not free. Your time is not free, and you spend your time keeping your customers running smoothly and you earn from that.

    What's better about a Linux service economy than a Win one - a service business based on proprietary software may come up against roadblocks. limitations in the software that their proprietary vendor does not address. Limitations that may make your clients go elsewhere, "switch" as it were.

    With linux, you can implement that change. You can make the product you give away perform as they need, and keep supplying service from then on.

    Linux - It's a service economy now guys. The only money to be made is in serving free software and in being the service provider known to be the best for a situation. Implement functions your clients need first, get paid first. TRUE market driven innovation.

    (thank you this marketing rant was brought to you by 3 straight days awake and sixty coffees)
    • You just gave me an idea.

      1. make linux distro+sw package so complicated only your team of tech support reps know how to get it to work.
      2. charge a lot for support
      3. profit!
      • 1. make linux distro+sw package so complicated only your team of tech support reps know how to get it to work.
        2. charge a lot for support
        3. profit!

        You might have said that in jest, but there's some truth behind it. If you implement a new facility in your distro, let's call it Britix - then you know it, you train your techs to know it, and your company knows it inside out. Then you release it to the world and immediately you're the only people who know how to best use it, and what purposes its best suited
      • And watch your customer base go to 0.

        Also, remember, that if other techs have difficulty supporting your app, your new recruits will have similar problems.
    • That';s the bit most of the big boys don't get. "The software is free! Free for anyone else to use! Free for all! Free and they can copy it!". True. But you the service company knows that your services are not free. Your time is not free, and you spend your time keeping your customers running smoothly and you earn from that.

      The "Big Boys" are used to making their cake, selling it, and then feeding it to the customers too.

      They make profit on the sale of the software and then the expensive service contract
    • Thats fine, but who's going to write the software? The personnel of the umpteen million "linux consultantcy" firms that will appear? Do the coders get compensated at all under this model, or do they perpetually beg for handouts?

      I don't see how OSS can push the bleeding edge of software without some real financial motive for the developers.

      Oh, sure, my awesome new internet app will be the killer app of tomorrow, and all kinds of consultants will get richer than Jesus supporting it.. But what about me, t
  • Does wide availability of high quality, low cost software harm or help the world's economy?

    High quality? Have you looked on Freshmeat lately?
  • Think ! (Score:4, Interesting)

    by foobsr ( 693224 ) on Monday August 16, 2004 @05:25PM (#9985023) Homepage Journal
    I think this once was a buzzword used in IBM advertising.

    International Business ....

    I have recently heard they are strongly connected to OSS. Somehow, they still do what they once advertised.

    So at least, one can infer that OSS is good for IBM.

  • Basic economics (Score:5, Insightful)

    by leathered ( 780018 ) on Monday August 16, 2004 @05:26PM (#9985038)
    It's as simple as this, if people save money by going with OSS then they have more money to spend elsewhere. One industry shrinks, another grows.

    I install Linux, Microsoft loses. Because I installed Linux I now have more money in my pocket, Brewing industry gains.

    As long as such changes are gradual, the impact on the economy is nil.
  • Way I see it... (Score:3, Insightful)

    by Meat Blaster ( 578650 ) on Monday August 16, 2004 @05:28PM (#9985048)
    It's shifting the temporary power that has been achieved by the individual programmer (low cost of investment, high rate of return) back to the corporation.

    Think about it. Where once a whole slew of programmers might have been hired to work on an inventory or billing system, for example, now a fraction can be hired to tweak what the rest have been producing for free.

    One could hardly call this anything other than neocapitalism. Under the guise of not reinventing the wheel (a process which actually contributes innovation by demonstrating multiple ways of reaching the same goal, some better than others) businesses are able to make their programming dollar go further at the expense of the programmer.

    While it is indeed possible for programmers to wait tables in their spare time, I would like to suggest that waiters do not need to invest 4+ years of schooling in their vocation. At some point this must be recouped or the quality and availability of programmers will decline.

    Unfortunately, both the hacker mindset and the CEO mindset are currently geared towards the concept of free software -- the hacker for the love of the code and the CEO for the love of free code -- and damned be the concepts of effective software engineering, security principles, or a day's pay for a day's work.

  • by bmac ( 51623 ) on Monday August 16, 2004 @05:28PM (#9985051) Journal
    Doesn't anyone else here see the absurdity
    of providing high-quality software (via your
    precious time) for free to the corporations
    that do not give us their technology, food
    or services for free?

    I'll say it now, and I'll say it again,
    those mutherf**kers are not getting one
    minute of my time for free. Period.

    Peace & Blessings,
    • Hmm, with a little visionary power you might conjure up a cleverly designed social engineering scheme, roughly ...

      0. Diagnose a social movement that has to be dealt with
      1. Create an enemy: M$
      2. Channel the movement: RH
      3. Conquer: IBM (while taking care of distraction: SCO)
      4. ... erm ... profit here

      • by bmac ( 51623 )
        Sure their software is basically crappy, but
        they have managed to write an OS that works
        with an unbelievable amount of different kinds
        of hardware. If in doubt, check the list of
        supported hardware in Linux or BSD.

        That's not the point though, my point is that
        M$ is at least charging those corporate sob's
        for their work, and, last I checked, the
        Bill Gates Foundation was giving away something
        like a billion a year (I could be wrong, tho).
        In any event, they have created (along with
        Paul Allen and other old-time M$-
    • That's the whole point of the GPL.

      Sure, SCO has Samba, but its no competitive advantage for them.

      If you can write software that gives you or your chosen company a competitive advantage, go right ahead.

      Also, only by writing code do you become a good coder. You might have hard-drives full of applications that you've written, but who knows about them? And thus, who knows about you?

      Nobody's forcing you to GPL your code, so why should you criticize those who chose to GPL theirs?
  • by Carnage4Life ( 106069 ) on Monday August 16, 2004 @05:28PM (#9985059) Homepage Journal
    The notion of "From Each According To His Abilities, To Each According To His Needs" which is the core of Karl Marx's philosophy is also the core of Open Source ideals. Those of us who can code give away our code so that everyone who needs software can benefit.

    The fact that the Cold War happened and 'communism' became a dirty word in the U.S. and other western nations doesn't make Open Source any less about ensuring that everyone can enjoy the fruits of the labor of the most talented without the necessity of enriching the producers of the software or discrimination against those that would not be able to afford software if it was proprietary and commercial.
    • by MattW ( 97290 ) <> on Monday August 16, 2004 @06:04PM (#9985398) Homepage
      Communism isn't a dirty word, but "From Each, To Each" has a host of pragmatic concerns which render it useless in the real world. Fact is, a lot of people, if they know they're getting paid the same no matter what they do, will spend all day reading /. instead of actually working. A lot of people will take a job doing security at night instead of going to medical school, because it's easier to sleep through a night shift than it is to work your ass off to become a doctor.

      Economics is the allocation of scarce resources, by definition. Both what people think they need and what they can produce are both very subjective. Hard work, risk taking, self-discipline, delayed gratification -- these are things which often pay off in a capitalist system and simply don't have a place in that simple philosophy.

      Aside from which, as long as there's a fairly egalitarian access to capital, it's almost impossible for any company to "soak the people" for profit without some statist loophole to rely on or a monopoly to exploit. Competition will force prices down; if one company or person is making money hand over fist making something or providing some service, the attractive money will lure others in, and that competition benefits the consumers.

      Communism didn't become a dirty word because of the Cold War. Sure, no one likes countries stockpiling nukes; but Communism became a dirty word because all the communists had to wait in bread lines to eat, and had to ration their toilet paper to make it last.

      Look at the effort it takes the IRS to do taxes. Imagine if there was some bureaucracy dedicated to evaluating peoples "abilities" and "needs". What a fiasco that would be... there'd probably be bread lines and rationed toilet paper, in fact.
  • by FunWithHeadlines ( 644929 ) on Monday August 16, 2004 @05:29PM (#9985066) Homepage
    Historically, software didn't always cost money. In the early days programmers shared technology. Then an industry came along that started charging money for closed-source software and they did very well. But this is not the automatically normal state of affairs, and in some ways is an artificial construct in the larger scheme of things.

    There are several companies that have embraced FOSS and are making good money. Not by charging money for the software, but by providing services. We always think of Red Hat and the like, but now think of IBM and they way they have embraced the FOSS world yet still make mega bucks providing their services. Linux, for instance, is not the basis of IBM's offerings, but merely one solution they provide. They don't charge for that software, but they do very well capitalistically speaking. There is no conflict between capitalism and FOSS, it merely shuffles the equation around a little. Instead of charging for the software, you charge for your knowledge in other areas. Then you 3. Profit!

    Closed-source software houses that screech about their lost profits and how important it is to America to maintain their stranglehold on this part of the economy sounds just like the RIAA. "Save our artificial business model!" Well, it's articifical, and as a business model its time is drawing to an end, or at least being marginalized. Time to make the choice, do you want to be like the buggy-whip manufacturers and the RIAA? Or do you want to be like IBM and make profits from embracing FOSS.

  • Without open-source software (linux), the smaller companies for whom I have consulted would not have readily had the budget to hire me. Even though I'll happily work on commercial UNIX systems, the availability of Linux has contributed greatly to to my consulting cash-flow especially since the downturn in the economy.
  • My own perspective is that Open Source can play a major role in reducing major concentration of power (both financial and political). I tend to see both communists and capitalists(even anarcho libertarians) as largely favoring concentration of power-despite much rhetoric to the contrary. Overall, I tend to see decentralization of power as a very good thing.

    However, there are some issues that concern me:
    will decentralization have negative side effects like getting advanced weapons technology into the hands of folks that seriously misuse that technology?
  • economics (Score:4, Insightful)

    by sstory ( 538486 ) on Monday August 16, 2004 @05:32PM (#9985097) Homepage
    In a free market, commodity prices inevitably trend toward the marginal cost. With software, the marginal cost is zero, and the popular and best OSS apps (linux, apache, mozilla...) are generally commodity-type items. So far from being communistic, it's coherent with market principles.
    • Re:economics (Score:3, Informative)

      by mdfst13 ( 664665 )
      To expand on the parent's post, there are four types of free market competition: perfect competition, monopoly, oligarchy (monopoly by a group), monopolistic competition (imperfect substitutes). The traditional economic models are perfect competition and monopoly, but these are hard to find in the real world.

      The economic ideal is perfect competition, as this results in zero economic profits (note that economic profits subtract out a reasonable rate of return to the investor, so a zero economic profit wil
  • only communist if (Score:3, Insightful)

    by bigpat ( 158134 ) on Monday August 16, 2004 @05:33PM (#9985105)
    OpenSource Software would only be communist if people were forced to perform work for the "common good" Instead people have their own reasons for creating open source software. Some of those reasons are market driven such as wanting to create a demand for services that otherwise wouldn't be needed. Or some are socially motivated, such as wanting acknowledgement or to help improve society as has happened with the explosion of communication on the web and internet.

    If people were somehow prevented from writing Open Source Software because it can take some jobs away from certain companies or some other reason, now that would be communistic.

    People are free to create and decide what they want to do with that creation. Communism is all about others deciding for you.
  • by Bruha ( 412869 ) on Monday August 16, 2004 @05:33PM (#9985107) Homepage Journal
    Lets take for instance if all the telecommunications companies in the US were forced to give up their lines and hand the upgrading and maint of them to a centeral company. This company would be regulated by the government for prices and what upgrades need to be done through contributions by the "Telecommunications Services Companies" and taxpayers.

    It would be my belief that you would see wide adoption of Fiber to the Premises in a much quicker manner than currently being shown by SBC and Verizon. Futhermore those companies that have this huge debt cloud that the fiber would never make money can then focus on providing services over those lines. Also they would not be restricted to the areas they are currently in so in essence I could be a Verizon Customer until I get a better deal then switch over to Comcast who would provide services via my fiber connection.

    In essence the national telecommunications network would be considered the Linux of our telecommunications backbone. Verizon, SBC, Cable Companies etc would be considered in the same light as Redhat, Novell, Mandrake and others. It's a common platform and the services are being provided.

    The only problem with this is that Linux has yet to be standardized in a acceptable manner. Mandrake looks different from Redhat who looks different from Novell. Fix that, standardize what's being done to the kernel and fight for customers with support and product contracts and we can kiss MS goodbye.

    Linux service providers (LSP)'s should be going to Corporations and telling them we'll provide you this service that will eliminate this problem or situation. You have to adopt Linux on that platform but for a fee we will make it do what you want and provide training and support for the life of it.

    Other companies should be investing in end to end solutions built on Linux that are standards based and drum up companies to adopt this. We see it in many places today but adoption is slow but picking up very quickly.

    Other companies who are standing on the sidelines wondering about this SCO business need to realize all the money they are throwing away and finally need to give the finger to SCO and get on with the conversion. Service disruptions to a Microsoft based virus over the last 2 years have far outshined any royalty payment you would ever have to pay SCO if hell froze over and they won their court cases. Go out and find those balls you had when you made these companies so great and use them again for once.
  • It looks like only the big corporations can make big money out of open source. Granted the rest of us poor losers get software for free but nothing else from the effort, while the big corps put in no effort and reap big money.
  • by MoralHazard ( 447833 ) on Monday August 16, 2004 @05:35PM (#9985127)
    This reads like a response to one of MS's most common attacks on OSS, especially when pitching to governments, about how increasing demand for OSS => decreasing demand for proprietary software, which causes the loss of jobs becasue OSS people do it for free, not as a career.

    Which is bullshit.

    1) Many, MANY OSS programmers work for traditional companies, which may or may not be primarily software companies. Really, it's not a case of some unpaid commie hippie stealing an MS programmer's job, it's a case of a well-paid IBM programmer stealing an MS programmer's job. Which is fine by me--the market at work.

    2) The OSS development model seems to have lower overall costs associated with it--open-source projects can give you the same functionality and features, but the total cost of developing all that software is much less than the total cost of developing the congruent proprietary product. This is GOOD, because it means that less people are doing more work, which means we're more productive and efficient. MS hurts because they're not able to compete with the more efficient (and therefore cheaper to the consumer) OSS product, and they lose revenue. Again, fine all around.

    What this is REALLY about is that OSS is a different management model for building software, and it's a model that's based on a different understanding of how best to profit from your ownership of intellectual property (copyright on software you've written/had written by others). That's why MS has started an internal drive to study the development process used by the kernel coders and others--they want to see if they can take some of the techniques and processes that are OSS and apply them to help MS become more competitive.
  • Yeesh (Score:3, Insightful)

    by Otter ( 3800 ) on Monday August 16, 2004 @05:39PM (#9985152) Journal
    This is fighting stupid with stupid. I realize that when you're a college student, the world seems to be divided into exclusive spheres of Maoism, Objectivism and frat parties but in the real world, arguing whether something is "communist" or "capitalist" is just silly.

    A more interesting question is whether it's sensible for professional programmers to insist that their labor is worth nothing. Or whether it's logical for them to insist that that their labor is worth nothing but that it's an outrage to replace them with someone earning half as much.

    • Re:Yeesh (Score:3, Insightful)

      by sql*kitten ( 1359 ) *
      Or whether it's logical for them to insist that that their labor is worth nothing but that it's an outrage to replace them with someone earning half as much.

      Exactly. That is one of the perpetually most entertaining things about Slashdot, how people (sometimes on the same day!) can simultaneously believe that
      • Linux competing with Microsoft on price is GOOD
      • Indian programmers competing with American programmers on price is BAD

      Now I realize that Slashdot is not a group mind, but these two positions are the o

  • by MattW ( 97290 ) <> on Monday August 16, 2004 @05:40PM (#9985164) Homepage
    I've never understood how people took the rant about free software being communist seriously.

    Are lawyers doing pro bono work destroying the market for lawyers? Are doctors who work in a clinic as volunteers destroying the demand for medical services? Are all the people out there who write articles or novels and give them away for free "destroying" the market for books? Of course not.

    It's foolish to assume that the best OSS software authors act entirely selflessly. If you could make $50/hr at a corporate software shop, or make a name for yourself on 10-15 hrs/week in coding for free and then command $150-200/hr for the other 25-30 hrs a week, what would you take? I'm making way more money than I ever did in a "real" job as a consultant, and I do it on my schedule and my terms. I got this by releasing a little OSS package... one that isn't even in use any more because I didn't have time to maintain it and it was fairly early-stage. But within weeks of putting it out, I was getting inquiries about modifying it on a per-hour bsais, and I've had a full schedule for over 16 months and more than 1 full time job offer that I've turned down.

    Also, it sort of assumes that there's some competition between OSS and certain alternatives. If I had a choice between a free IIS and a $100 copy of Apache, I'd buy Apache. If I had a choice between a free winXP, and paying $89 for linux, I'd take linux. (And I'd dual boot to free windows so I could play games :p)

    I'm sure for a lot of people, "free" is a nice thing. But you know what? It's been pointed out before: license fees on software are often a tiny fraction of TCO. OSS is often superior not because of the software cost, but the associated costs.

    As far as the "World Economy" goes, this question is in the "Give Me a Break" category. It's like asking whether free medicine would help or harm the world economy. The only difference is there isn't an army of altruistic and excellent drug manufacturers like there are software developers.
  • Linux makes jobs (Score:5, Interesting)

    by NigelJohnstone ( 242811 ) on Monday August 16, 2004 @05:41PM (#9985173)
    He missed a major point in section 7.


    Its very simple, Microsoft's revenue is $36.8B it employs 55000 it has a high revenue per employee of $669k. It has a monopoly so that high revenue/employee is not suprising.

    Other companies are not so lucky:

    GE revenue is 140 Billion, it employs 305000, thats $459K per employee.
    Citigroup $240K per employee
    Walmart $183K per employee...

    If companies spend less on Microsoft products and invest it in their own business with similar results to their existing business, then they will create more jobs.

    So, if Walmart saves 10 million by not buying Microsoft licenses and switching to Linux
    and invests it in its own company, it will likely create 55 jobs.

    Microsoft will lose $10m (i.e. 15 jobs). A net gain of 40 jobs.

    Walmart jobs are low grade, a more realistic example is Citigroup. 10 million saved on Windows licenses is worth 26 extra jobs.

    My point is, it isn't just that companies spend the money on themselves, it's that they employ more people for each $ revenue than Microsoft, so every dollar saved creates more jobs than a $ going to Microsoft.

  • by IGnatius T Foobar ( 4328 ) on Monday August 16, 2004 @05:43PM (#9985186) Homepage Journal
    It should be painfully obvious by now that Microsoft's current MO (aside from funding the litigious bastards [] at SCO, and their current astroturf campaign about patents) is to lead everyone in the wrong direction about what "free" means (i.e. gratis instead of libre) and then tear down any claims made by that assumption.

    Don't fall into Microsoft's trap. When talking about open source with colleagues, customers, etc. make sure they know about the true benefits. Lower TCO is part of the picture (and it does have a lower TCO when anyone not reciving Bill Buck$ is doing the measurement), but there's also the ability to interchange components at will, and the ability to interchange vendors at will, which gives everyone more leverage with their vendors. With open source, everyone wins except for software companies who have built their businesses around lock-in.

    If nothing else, this whole thing should serve as a stellar example of why the phrase "open source" is an order of magnitude more versatile than the ambiguous "free software." There's no confusion as to what it really means.
  • If we use the same logic that concludes that OS is communist, then we can conclude that some other famous orginizations(even countries) are communist as well:

    Canada - Free healthcare? Those bastards!
    The Red Cross - Stealing money from the healthcare industry!

    There are many others. Can you think of some?
  • by jazman ( 9111 ) on Monday August 16, 2004 @06:00PM (#9985349)
    OK, that's a good question. Let me try asking a couple of other questions in lieu of R-ing TFA:

    - does the availability of high quality, low cost literature (Shakespeare, Rabbie Burns) help or hinder world literacy?

    - does the availability of high quality, low cost music (Beethoven, Brahms) help or hinder world arts appreciation?

    If you answered "of course it fucking doesn't" then may I propose that that is also the answer to whether or not high quality free software harms the world's economy.

    Is Microsoft competing on unfair terms with Linux? Maybe. Is Arvo Part competing on unfair terms with Schubert? Same maybe - you could argue he is, or you could argue he isn't. Part can't just knock up some neat patterns thanks to Bach's and Mozart's comprehensive experimentation on the subject. That doesn't mean Spiegel im Spiegel isn't a damn fine piece of music.

    Do we hear modern composers whingeing about the availability of high quality public domain music works, or today's authors complaining about how they can't compete with Shakey? I haven't seen Terry Pratchett arguing that Shakespeare's works should be legally prevented from being shared in the PD, or Tolkien's estate arguing that Project Gutenberg should be closed down.
  • For the last time (Score:5, Insightful)

    by jdavidb ( 449077 ) on Monday August 16, 2004 @06:09PM (#9985461) Homepage Journal

    I'm a laissez-faire, free market, anarcho-capitalist libertarian. Nothing could be more pro-free market than protecting the right of people to GIVE away their creations for whatever motive they choose. It just so happens that there are economic incentives to do so in many cases.

    Anti-free market would be if you decide the government has to step in to "promote competition" (i.e., stamp out activity that seems to weird for the politician's radar and/or threatens established business models). Anti-free market would be if you RESTRICT people's right to give away what is theirs. The fundamental of the free market is the right to do what you want with what is yours [].

    Anti-free market would also be, IMO, granting any kind of monopolistic or exclusive rights to people or entitites, for example, "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." A real free market solution would let the free market promote the progress of science and useful arts instead of doing it by government compulsion. And we are seeing that when there is a vibrant set of public works available through public domain and/or favorable licensing terms, science and useful arts advance dramatically as almost all discoveries and inventions build on prior art. Removing these restrictions would do so far better.

  • by mormop ( 415983 ) on Monday August 16, 2004 @06:19PM (#9985573)
    Always struck me as the first sign that corporate lobbyists had run out ideas as far as attacking Linux goes. Firstly, the protagonists always seem to confuse Soviet style Stalinism with communism which as the original article points out were not the same thing. Secondly, when comparing the Soviet system to modern software Microsoft's monopoly and arrogant, oppressive behaviour via the KG.... oopps, BSA bears more resemblance to the control freakery of the USSR than the relatively chaotic dispersed model practised by FOSS authors and development teams.

    The economic damage argument is also a sign that MS and their schills are grabbing at straws. I imagine that the first use of gunpowder led to cries that arrow makers would be unemployed and the powered loom leds to concerns of unemployed weavers but every time a new business model arises the end result is that people adapt and their bloody good at it. Thousands of Miners, whole communities were made redundant in the UK in the 1980's but the end result is that they just moved on and found other things to do.

    If any economic effect will be felt in the event of a major shift to OSS it'll be the free availability of software to businesses of any kind, large or small, rich or poor a startup in Bengal will have access to same CRM, office suite whatever that a major corporation in the US or UK has. Open standards will make the dissemination and exchange of information flawless across the global industrial base and a whole industry will spring up installing and supporting it.

    The development of such an industry is almost guaranteed by the fact that just because the software is free doesn't mean that businesses will install and maintain it themselves. If this were the case people would be doing it with Windows and as I spend my working life in a sort of purgatory going from office to office doing such exiting things as showing people how to put the shortcut they deleted back I can't see it happening at any point soon.

    Besides, there's always the option of following the dual licence model that MySQL, OpenOffice/StarOffice etc. follow so that businesses can buy in the product and service from the manufacturer if they choose to do so.

    Anyhow, The more blatantly stupid lines that MS and Co. come out with the greater the pressure thay must be feeling which is a good thing in my book.
  • by edwinolson ( 116413 ) on Monday August 16, 2004 @06:22PM (#9985606) Homepage
    A simple argument supporting the pro-Capitalism nature of Open Source:

    No artificial measures have been used to "prop up" Open Source. Yet it exists in a Capitalist society. Free markets do not reach equilibriums instantaneously, so it is possible that the existence of Open Source is merely a bizarre transient. But every passing day is an indication that it is not.

    On the other hand, artificial measures DO exist to prop up closed-source software. This directly hurts Open Source, yet Open Source is alive in spite of it. That's a pretty strong indication.

    I can't give you a balance sheet showing how Open Source is "in the black", but if you believe in natural selection in the context of a free market, there's not really another explanation for the existence of Open Source.
  • by tabdelgawad ( 590061 ) on Monday August 16, 2004 @06:23PM (#9985611)
    It's somewhat ironic that the label 'communist' gets attached to open source software. In fact, software, like all information goods in a networked world, is a pure public good (a technical economic term; look it up in Wikipedia or your Econ text) and therefore a standard textbook case of market failure. One possible solution to this failure is government intervention through legislating and enforcing copyrights/patents (closed source). The other possible solution is a tying arrangement whereas the software is given away for free, and technical services (not a pure public good) are tied to the software.

    As a solution to public goods market failure, tie-ins have been studied by economists for decades and are conceptually nothing new (look up Nobel-laureate Ronald Coase's classic article on lighthouses). In fact, since they're entirely market-driven and require no government intervention (in the case of public domain software), they're closer in spirit to the ideals of a free market than copyrights.
  • by piecewise ( 169377 ) on Monday August 16, 2004 @06:23PM (#9985618) Journal
    high quality, low cost software

    So, I won't argue with low cost. Sure is. But high quality? A few exceptions aside, open source software is often terrible quality. Just look at the never-ending story of Mozilla. Sure it's starting to clean up, but it's also taken years to build it into something!

    OpenOffice for OS X? Sorry, I much prefer MS Office 2004. That's sort of ironic. And sad.

    Open source holds a great place - and I think it's helpful that it forces the corporate players to improve their products. But I'm not confident that open source is the next wave or some incredible movement - at least until more attention is paid to installation, distribution, user interface, and stability. The mainstream user would rather spend more money to have a product that will work out of the box and is backed by a company. Most folks just have no interest in getting free software from some teenager - as incredibly talented as that teenager may be (Not to stereotype - but that's the perception if average people know what open source is about at all).

  • by auferstehung ( 150494 ) <tod.und.auferstehung be i g> on Monday August 16, 2004 @06:29PM (#9985671)
    The success of Free Software in a capitalist market is illustrated by considering the iterated prisoner's dilemma []. Self-interested, profit motivated corporations will cooperate for mutual benefit. The GPL maintains a Nash equilibrium [] by punishing defection (cheating).
  • by div_2n ( 525075 ) on Monday August 16, 2004 @09:38PM (#9986903)
    I, for one, am completely tired of the whole "is Open Source bad for business" discussion that keeps getting pushed. Guess who does the pushing? Companies that are fearing their business being harmed.

    By freeing up money and making one sector of business more streamlined, by default another will open and the world will advance. It just happens that way. Sure automobiles put most horse and buggy makers out of business. But they created many jobs for producing automobiles. Eventually roads were made that still provides jobs.

    Fact: IT departments are by far and wide the biggest money losing departments of businesses. They don't sell anything. They are cost centers. Open source can help alleviate that and allow for that money to be used on something else. In the long run, this will always be good and help new sectors grow. Those that fight this change will go the way of the horse and buggy maker. Those that retool their shops to embrace will reap the rewards.
  • by joonasl ( 527630 ) <.if.iki. .ta. .nenityyl.sanooj.> on Tuesday August 17, 2004 @02:19AM (#9988502) Homepage
    I'm sick and tired of the current trend of evaluating all human endeavors in economic terms. Free markets and capitalism are not the culmination of western culture and not the final purpose of the Enlightenment (which, as the inspiration for the French and the U.S. revolutions is the God father of the current western democracies). Who cares if open source software is pro-capitalistic or not. What is much more important is the fact that it is an manifestation of a much more important tradition of the Enlightenment - freedom of expression.
    • Agreed. The reporting on Florida's recent devastation from Hurricane Charley is a classic example - I've probably seen about 20 different news reports that mentioned $16 billion dollars worth of damage but about 5 reports mentioned the 8 people who lost their lives.

      Money and finance hold back human development because everything is subject to what it costs, not what benefits it can bring to the human race.

      Hopefully Open Source software is just the first step of humankind realising that knowledge-sharing

  • by daniel2000 ( 247766 ) on Tuesday August 17, 2004 @06:29AM (#9989139)
    From economics, a free market is based on the following assumptions.

    Read these assumptions and decide for yourself, does free software or propriatory software fit the free market model the closest?

    In my opinion many of the industries crying out in the name of free market economics are in fact the industries furthest away from these assumptions.

    1. First, markets must be economically
    competitive - meaning the numbers of buyers and sellers must be so large
    that no single buyer or seller can have any noticeable effect on the
    overall market.

    2. It must be easy for new sellers to
    enter enterprises that are profitable and easy for sellers to get out of
    unprofitable enterprises, so that producers are able to respond to market
    signals of consumers' wants and needs.

    3. Consumers must have clear, informative
    and accurate information concerning whether the things they buy will
    actually meet their wants and needs.

    4. And finally, consumers must be
    sovereigns - their tastes and preferences must reflect their basic values
    - their tastes and preferences, untainted by persuasive influences.


The optimum committee has no members. -- Norman Augustine