There is a Substantial Antagonism between Free Software and Capitalism

It is not uncommon that people want to tell me that Free Software and Free Knowledge fit nicely into the concepts of capitalism. They are right that they can do a good job for humanity by supporting Free Software or Free Knowledge while they are accepting capitalistic circumstances, feeling comfortable within them. But it is not true that FLOSS and Free Knowledge are about free markets and capitalism. Freedom is not about markets at all. Markets depend on the concept of scarcity. When supporting Free Software, Free Knowledge, Free Research etc. you are working against the concept of scarcity, they remove the scarcity where it is definitely not necessary. Anybody can benefit from software and knowledge, anybody can make it better. Everybody is allowed to copy it. That are the fundamental concepts of Free Software, and that is a fundamental antagonism to scarcity. The reason that it is working within capitalism is not a common ideology. The reason is: capitalism is not totalitarian. Most gouvernments do not want it to affect any aspect of life, there remains the freedom to act outside of it, to support other people, to have a family, to love somebody without revenue – and thus you are even allowed to fight against shortness, you can create Free Software.
But laws may change, any there are powerful parties opposing the ideas of cooperation because they benefit from scarcity. Thus people invented “intellectual property” and told us it would be a worthful ideal. That Free Software is using copyright for its copyleft is just a pragmatic approach necessary to achieve something in the current world. If there would be no scarcity for software, i.e. all software would be free, there would be no necessity for neither copyright nor copyleft.
Let us translate the ideals behind Free Software to other parts of economy: That would mean stopping scarcity, stopping shortness, allowing real freedom. E.g. it would mean making food and medicine freely available for everybody. With increasing automation there will be even less necessity of scarcity, but unfortunately some people benefit from it. Automation gives us the opportunity to stop scarcity and alienation in a smooth process without ruining economy. But it has to be used wisely – that means Free Knowledge and Free Software to prevent technocracy. It could finally remove the necessity of property. It could result in real, human freedom, in equal opportunities wihout alienation or structurally caused existential dependence. Then capitalism would be over. But maybe there is another alternative more likely to happen: We are heading into technocracy, all formal democracy will become worthless. Mighty persons or maybe their invisible (and evil!) hand will control intellectual property even more, will control all the people, will keep markets, scarcity, capitalism, poverty everywhere. Those who can controlown the knowledge and information can control everything human beings are able to control.

PS:
This article might be interesting to read for those who understand German.

78 Responses to “There is a Substantial Antagonism between Free Software and Capitalism”

  1. seller liar Says:

    There are scarcity because the need of profit of some corporations .If scarcity stops ,the product gets price = zero .Then it’s not possible to profit anymore.

    In fact , every corporation have a period of time . No corporation can profit forever ,unless the corporation stops technical evolution towards abundance.

    Profit is a techique to steal money from word of others .

  2. Aaron Seigo Says:

    ” Markets depend on the concept of scarcity.”

    no, actually, they don’t. they can utilize the effects of scarcity (real, perceived or purely artificial/consensually agreed upon), but they don’t require it. they are just as easily driven by concepts of quality, mobility, service, expediency and loyalty.

    water is abundant in many countries and freely available, yet in those same countries bottling this non-scarce resource remains a huge industry. (so large that it is often a detriment of the environment.) water, as a non-scarce resource, certainly is incompatible with capitalism and free markets, right? and oddly, given your supposition above, in countries where water is scarce there often isn’t such a big industry around the convenience bottling of it.

    “But it is not true that FLOSS and Free Knowledge are about free markets and capitalism”

    don’t confuse free markets and capitalism. capitalism is where the means of production are privately owned and operated for profit. “free market” describes a system under which there are few (or no) external controls to the trade within a market. (taxation is an allowed and expected exception, and in practice there are usually regulatory mechanisms in all functioning “free” markets, whether in the form of social norms or state bureaucracy).

    and this is why people say the F/LOSS and capitalism fit neatly with each other: they operate on different parameters of a market that are non-critical to the other.

    in fact, F/LOSS allows for certain new efficiencies in a capitalistic, free market such as distribution of risk for investments in non-core competencies, shared development (and therefore lower cost of production) of non-differentiating as well as key process technologies and the creation of non-negotiated (so similarly low cost and without need for the precondition of agreement even between antagonists and competitors) cooperative efforts. these all serve to lower individual risk, raise value of offerings and limit capital expenditure. iow, F/OSS, from a capitalistic POV can be seen as a private sector form of externalization that is driven by a combination of legal precondition and competitive advantage (think of that from a game theory perspective to see the benefit).

    in any case, the above is why i have a certain pet peeve about the geek community which i participate in: to often geeks (and i use that term lovingly, as a fellow geek) think that their ability to puzzle out hard problems absolves them of the task of proper investigation into and (even self-)education on those same complex topics. the result too often is people talking / writing / forming opinions about complex topics, such as economics, which they have not earned the factual basis upon which to do so with accuracy.

    economy is a fascinating field of study. but please, study it well before launching into essays such as this blog entry :)

  3. The User Says:

    @Aaron
    Without scarcity there are cannot be markets.
    If scarcity stops ,the product gets price = zero
    Exactly. Price(bottled water) ? 0, because glas, men-power, ground water etc. are scarce.

    Don’t confuse free markets and capitalism
    I don’t, but capitalism depends on markets and markets depend on scarcity. That is why I mentioned both in that sentence.

    and oddly, given your supposition above, in countries where water is scarce there often isn’t such a big industry around the convenience bottling of it.

    That is first of all not a contradiction. Capitalism is usually not totalitarian thus there can be unmonetarized wells etc. Btw. in many of those countries water is excessively controled by the state – that may be good or bad.

    and this is why people say the F/LOSS and capitalism fit neatly with each other: they operate on different parameters of a market that are non-critical to the other.

    As I said: they do not exclude each other. But I am talking about the values behind it.

    in fact, F/LOSS allows for certain new efficiencies in a capitalistic, free market such as distribution of risk for investments in non-core competencies, shared development…

    Of course it can be used/developed for economical reasons and that is a strength of it. That is a reason why it could evolve. Never the less there is an antagonism, Free Software replaces capitalistic software development, where men-power is used to produce a software-product which is sold like a scarce material property. We see another reason why it works particularly good with software: for material goods are usually scarce by nature, software is inherently non scarce, unless you invent “intellectual property” etc. Just because capitalistic companies can benefit from Free Software, it is not an aspect of capitalism itself. Capitalistic companies can also produce postcards showing liberal art or use the results of independent research etc.

    (and i use that term lovingly, as a fellow geek)

    No problem, I am probably a geek and I am probably a nerd (and I care about the difference :D), and I have no problem about it.

    economy is a fascinating field of study. but please, study it well before launching into essays such as this blog entry

    First of all: That is not a valid argument for any position. Second point: Scarcity is a necessity for markets, if you do not know that, I do not think you should tell me that. But that is neither a valid argument… Third point: Welcome to technocracy where just an elite can talk about it…

  4. The User Says:

    ?p?Products: ¬scarce(p) ? everybody can take p ? nobody will pay for p ? ¬?market(p)
    Hence: ?market(p) ? scarce(p)
    ;)
    (e.g. there is no market for air)

  5. Tom Says:

    There is a substantial link between free software and capitalism. Modern capitalism is capable of transforming and adapting itself to new situations and environments. For example the fordistic age cannot be compared to the post-fordistic age which offers more freedom for employees, more flexibility, more diversity, more gender-mainstreaming and so on. However, it is still capitalism in pure Marxist sense (and yes, after all you can critisize, there are some basics, Marx simply got right).

    The free software development is a good example for post-fordistic production: highly skilled professionals develop on their own or in ever changing teams (thus exploting themselves much better than any capitalist could exploit them) or while being employed by a ordinary company that has, after all, generate profit (and guess where the profit comes from).

    Costs for developing software tend to sink (generally speaking and thanks to OSS), productivity tends to rise. By widening the access to higher education, “prices” for skilled developers will sink. To sum it up – what happened in the industry will happen in software delevopment as well and OSS is just one of many milestones of achieving that.

    (I’m not a native speaker so I hope I expressed myself correctly. A good book on this issue might be this one: http://www.amazon.com/New-Spirit-Capitalism-Luc-Boltanski/dp/1844671658/ref=sr_1_fkmr0_1?ie=UTF8&qid=1306667028&sr=8-1-fkmr0)

  6. Arne Babenhauserheide Says:

    Actually free software adds common rules which fit very well with working capitalism (but not with free market). It’s community owned property, like a river which noone is allowed to pollute. Thus free software allows companies to cooperate on fulfilling a common need without fear that the others might take the result away.

    They create a common ground everyone may use, because that’s more efficient for making money. That way it wins in a capitalistic environment.

    Base line: Common and enforced rules are good for a capitalistic system. They are also good for non-capitalists, though, which makes free software a concept all can agree to (as long as they agree to its ethics).

  7. The User Says:

    @Arne
    Capitalism depends on private property. It means owning capital (i.e. production facilities) implies owning produced properties, which are sold at the markets. When e.g. software becomes common property (not state property!) the capitalistic value creation is no longer present.

  8. Lukas Says:

    Free market to capitalism is as QT to KDE, one is the framework, next is the implementation under certain conditions. The fact, that price goes to the 0 (try to read J. Schumpeter) doesn’t mean its against free market. It just means the market is going towards so called “perfect market”.

    One of the funny things I have noticed, is that some assumptions is made having specific constants in mind. However NOTHING is constant, and even a little changes can make big differences. Like Marx, his ideas works, but only with specific conditions, that can’t (at least for now) be achieved in real life. It doesn’t mean that 100% of his ideas are false, but saying if you agree on point A, you mus also agree on B, just because X said so, is a brain wash.

    One of the most important topics in economics and politics is PRIVATE and PUBLIC goods, and how to have the best balance b/w them. FOSS is more a public good, and it works, because we still have tools to cope with issues like moral hazard (e.g. pushing viruses to trunk), collective action (if this bug doesn’t bother me, I wont fix it), principal-agent (pushing changes that are good for me, but can break other) problems etc.

    Imagine if suddenly 20k of people would start pushing review requests. Real development would just STOP, since taking care of that mess would be impossible.

    To your surprise, F/OSS is also scare. Software without hardware is WORTHLESS. Software without people trained to use/support it is worthless too. Time required to learn to use software is also expensive.

    Focusing only on single line of expenses to have a SOLUTION, not a single of the many TOOLS to get it, sometimes leads to, lets say, imaginary results.

    Apple, the proprietary corp, still uses open DislayPort standard. Both F/OSS and free market is about THE RIGHT to choose INDIVIDUALLY and decide whats best for you.

    What you are writing about changing laws, has NOTHING to do with free market. Its nothing more than totalitarism in a legal form.

  9. The User Says:

    Free market to capitalism is as QT to KDE, one is the framework, next is the implementation under certain conditions.

    Nope, but they are able to coexist, as I said…

    To your surprise, F/OSS is also scare. Software without hardware is WORTHLESS.

    That is like saying air is scare. There are theoretical limits, but they cannot actually be bailed out, hence neither air nor software is scare, air because of the high mass of it, software because of the tiny mass of it making it possible to copy it without limits.

    The fact, that price goes to the 0 (try to read J. Schumpeter) doesn’t mean its against free market.

    I am not specifically talking about free markets, if they are good or bad or something like that, but without scarcity there ar no markets.

    One of the funny things I have noticed, is that some assumptions is made having specific constants in mind.

    For exmaple? I have never said that Marx is fully applicable to our times… Which invalid constants did I assume?

    Time required to learn to use software is also expensive.

    No, it is not, I am not a homo economicus, I do not want to sell my time on the markets for the best price, I want to use my time and live my life. Time is not expensive if you use it for something you can identify with, because then it will fulfill all personal needs how short your remaining life might be.

    However NOTHING is constant…

    You mean capitalism is flexible? That is true, but that does not make it good…

    Imagine if suddenly 20k of people would start pushing review requests…

    Developers are scarce, not the software, the software itself is not a property.

    Focusing only on single line of expenses to have a SOLUTION, not a single of the many TOOLS to get it, sometimes leads to, lets say, imaginary results.

    There are many tools to fight against scarcity. :)

    What you are writing about changing laws, has NOTHING to do with free market. Its nothing more than totalitarism in a legal form.

    The only laws I mentioned are so called “intellectual property”-laws, and that is obviously artificial scarcity. So you seem to agree with me that they are nonsense? Well…

  10. jpo Says:

    “Markets depend on the concept of scarcity.”
    Actually, they do not. A market depends on buyers and sellers agreeing on a price for generic goods. If there is an abundance of goods, the price falls until sellers drop out of the market and the price starts to rise again until equilibrium is restored. Free software fits perfectly well into this system. You as a developer are free to provide your services for non monetary gains (recognition, fun… whatever).

    I’m always ticked off about people that try to bite the hand that feeds them. I have spend a significant part of my life behind the iron curtain and believe me: it was no fun at all. None. There really was a reason people choose freedom over socialism. And yes real Freedom, the freedom to do what you want, to go where you want to go and to speak without fear are closely bound to a market economy: A market economy thrives on the chaotic and free decisions of the economic agents (e.g. people). If you take this freedom away, other freedoms will fall, too eventually.

  11. Aaron Seigo Says:

    “Without scarcity there are cannot be markets.”

    you seriously need to study economics before writing such things.

    “Price(bottled water) ? 0, because glas, men-power, ground water etc. are scarce.”

    no, the price of bottled water is more than zero because of convenience. nothing more. containers, man-power, etc. are LESS than the perceived and allowed cost of convenience. i can easily fill a bottle with water myself; i can easily get a container for near zero cost. in fact, i do that all the time. but bottled water exists almost purely because of convenience. it has (with some edge case exceptions) nothing to do with scarcity of time, of containers or potable water.

    there are many other similar examples. this is just one.

    “Free Software replaces capitalistic software development,”

    let’s pretend that is true (it isn’t, demonstrated by so many examples such as Red Hat, but let’s play :) .. if it replaces “capitalistic” software development, it benefits all the capitalists who aren’t creating that software as their core competency, which means it becomes a commodity that is largely externalized resulting in greater efficiency .. resulting it better capitalist economies.

    if we pretend that F/OSS destroys capitalistic software enterprises (which it demonstrably doesn’t), then it benefits non-software capitalist enterprises.

    in reality, what you are confusing is commoditization and devaluation with anti-capitalism.

    “where men-power is used to produce a software-product which is sold like a scarce material property.”

    which is but one business model around software. it isn’t the only one that works, and the others that do work are also, not shockingly, capitalistic.

    “We see another reason why it works particularly good with software: for material goods are usually scarce by nature, software is inherently non scarce, unless you invent “intellectual property” etc.”

    your joking, right? software is scarce because it requires expertise, which itself is scarce. guess what red hat’s capitalistic business model, which is firmly f/oss, is based on?

    “Just because capitalistic companies can benefit from Free Software, it is not an aspect of capitalism itself.”

    of course not, because that sentence is a non-sequitor. it’s like saying that beavers are not an aspect of capitalism. sure, lots of capitalist organizations thrived on the beaver pelt trade … but beavers are not an aspect of capitalism.

    it also doesn’t imply that beavers were not an important aspect of capitalist organizations in certain periods of time in certain places in the world (say .. canada during its founding).

    you are confusing a mechanism for monetization with the product it monetizes. indeed, the product does not define the mechanism. in fact, that’s why your original blog entry makes no sense: f/oss is orthogonal to capitalism. therefore there is no antagonism. there is no undermining. there is no preclusion.

    personally, i just wish you’d leave the economics to people in the business of monetizing f/oss and stop undermining those efforts with misguided, albeit well-meaning, flawed analysis.

  12. jpo Says:

    @Aaron: agree 100%

  13. g Says:

    I am no economist, so I am going to stick to the “philosophical” part of the discussion. Capitalism is basically nothing else than the transposition of the primitive, instinctive behavior of wild animals in the jungle: each individual wants to control as much (or at least enough) resources as possible in order to survive the longest possible and in order for the clan to survive the longest possible. The same is true in capitalism: each company wants to control as many resources as possible to survive the longest possible. So capitalism is not about scarcity, but about control. That’s the ultimate goal of the Microsofts, AB Inbevs and Monsantos of this world. If you control all resources in a certain domain, your future is assured (as in the jungle). When I visited America I was shocked to see that in the so-called “free” world with a “free” market, the “public” transportation is in reality full of monopolies: each region has its own bus company which controls the entire region, there is no competition anymore, so in fact the dictatorship (concerning “public” transportation) of each bus company in each region is established. The consequence is that the quality of the service depends entirely on the goodwill of the company: in one region it was good, in another region it was terrible, but since both control their area, both survive. In my country two internet providers rule the market with approximately equal share, this is almost the same as a true monopoly because the reality is that the prices and the quality of both are the same and no improvements in the service occur. The idea of FLOSS is totally contrary to this: in FLOSS no-one has control over the source (well, the maintainer has, but if his decisions are not supported by the community a fork can be made), every resource should be available to everyone, quality is valued higher than control. For software this is easy because if there are not enough resources (copies of the software) you just issue the “cp” command ;-) For material resources it is harder because you cannot simply copy resources. That’s why I do not see a transposition of the FLOSS idea to other parts of the economy happen soon. Such a transposition would mean that a communist regime must be installed which controls the resources and distributes them fairly among the people (note that the “communist” regimes in Eastern Europe did *not* distribute the resources fairly because the elite got all and the people nothing). This would however result in people not being happy because by our animal nature we always want more (because we are afraid (still our animal nature) that one day we might have nothing and starve). The reason why capitalism survives such a long time is because it fits our animal nature so well. The reason why FLOSS survives is because it doesn’t hurt our animal nature. Maybe if resources are plentiful and it is guaranteed that this situation would remain forever, then maybe a communist regime may survive, so the continuing *existence* of capitalism depends on scarcity.

  14. kboite Says:

    “A market economy thrives on the chaotic and free decisions of the economic agents (e.g. people). If you take this freedom away, other freedoms will fall, too eventually.”

    Thinking that free entrepreneurship and market end to the world we know is utopian for sure. The economic system we live in also relies on many artificial institutions (e.g : centralized (and btw undemocratic and unliberal) money creation).

    The actual financialization of our global market actually started to show some of the limits capitalism enforces to freedom.

  15. jpo Says:

    @g: Read http://en.wikipedia.org/wiki/Rent-seeking

  16. g Says:

    I want to add that actually there exists a market for air. Someone had the great idea to let companies and countries pay for the CO2 that they produce. This will of course never solve the CO2 problem. There is only a benefit for speculators who can now buy and sell air too. The next financial crisis may be based on thin air (literally). If the consequences wouldn’t be so dramatic for the people doing a real job, I would be laughing with it.

  17. The User Says:

    Free software fits perfectly well into this system. You as a developer are free to provide your services for non monetary gains (recognition, fun… whatever).

    The services, yes, but the software cannot be sold, it is not at the market.

    There really was a reason people choose freedom over socialism. And yes real Freedom, the freedom to do what you want, to go where you want to go and to speak without fear are closely bound to a market economy: A market economy thrives on the chaotic and free decisions of the economic agents (e.g. people). If you take this freedom away, other freedoms will fall, too eventually.

    I have not said that free markets are bad. I have said that there is an antagonism between Free Software and markets. Terminating scarcity does not take away freedom, it supports freedom. Being allowed to take something unlimitedly – that is freedom. You think the “freedom” to create artificial scarcity by treating software as property is good? It is just absurd. Did I talk about socialism? I did not. Socialist systems did not remove scarcity, they did not remove property, but property has been transferred to the state. Of course that is not better if all the capital is controlled by the state.

  18. jpo Says:

    @kboite: I can’t quite parse the meaning of your comment. So, please clarify what you actually mean. I *think* that you have a gripe about the domination of Wall Street in the current day US centered capitalism. This is something I’m in complete agreement. However, this is a fairly recent development routed in the “conservative revolution” of the Reagan years in the USA. Rolling these developments back and returning to a more regulated environment that gave the prosperous years of the post WWII period is a political goal that I find legitimate (even if I don’t share it).
    Look, I sympathize with a lot of the things the things the star economists of the left (Krugman, Stieglitz) have to say. To quote Krugman: “That doesn’t mean the order we have should be overthrown: the pursuit of Utopia, of perfect economic justice, has proved to be the road to hell, while welfare-state capitalism — a market economy with its rough edges smoothed by a strong safety net — has produced the most decent societies ever known.”

  19. The User Says:

    “Without scarcity there are cannot be markets.”
    you seriously need to study economics before writing such things.

    I have actually asked somebody having studied economy (though not as major subject), and of course there would be no market for a thing which is not scarce for anybody. You can even ask Wikipedia. Your bottle-example is nonsense, of course you would not buy bottles of water if you would have unlimited bottles of water in front of you. Or if you would have unlimited bottles and water and would enjoy filling bottles with water. You would never buy it (assuming that it is the same kind of water etc.). Of course ressources may be scarce for some people and for some people not.

    if we pretend that F/OSS destroys capitalistic software enterprises (which it demonstrably doesn’t), then it benefits non-software capitalist enterprises.

    As I said: they can coexist. I have not talked about Free Software destroying something. Capitalism is flexible, it can even utilise Free Software. And Red Hat is not actually selling software, anybody is free to download their sources, it is not scarce. Only their man power for support are scarce.

    and the others that do work are also, not shockingly, capitalistic.

    No, they are not, they may be utilised for capitalistic value creation. But producing Free Software itself is not capitalistic value creation, because it does not create something valuable at the market, it could help.

    your joking, right? software is scarce because it requires expertise, which itself is scarce.

    Software ? Service

    it’s like saying that beavers are not an aspect of capitalism. sure, lots of capitalist organizations thrived on the beaver pelt trade … but beavers are not an aspect of capitalism.

    Uh, yes, it is true, beavers are not an aspect of capitalism, they have a different “society”.

  20. The User Says:

    @jpo
    You call scarcity freedom? Sorry, there are people dieing because of unnecessary scarcity. You think food has to be scarce? It would not have to without its unnecessary utilisation for meat- or fuel-production. Agriculture is very efficient nowadays, the scarcity could be removed for basic food and nobody would have to starve to death. And you want to tell us that it is more important that some farmers can have free markets than the life of millions of people? When you are starving there is no freedom. A different aspect: Alienation is really usual in capitalism, most people work most of their life for something they do not love, they do not put a high value on. That is capitalistic reality, not Marxist babble. And nobody is asking if everybody has to work, if we need economic growth, even in developed countries we are chained to capitalistic rules. Unfortunately many people are aligned to it and to rules of society…

  21. The User Says:

    @jpo
    The society in my country is vermin, it relies on social controlling everywhere, it is not about ideals, it is not about individuality. People should fit into the system. Individual needs should be satisfied by collectivism. You either have to work or take part of collectivism. 8h a day sleeping, 8h a day serving economy, 8h a day fulfilling social expectancy, the “free time” is mainly used to participiate at collective events (sports, parties etc.) to redirect thoughts from ideals to amusement, otherwise the free time would be much to dangerous.

  22. Lukas Says:

    @G Your point about control is true. What you described is more or less a public good, that is both created an consumed publicly.

    Think of a party. While none owns it, there are many stakeholders (stakeholder != shareholder), whom directs the follow of the party. The host, the guests, the neighbors, etc. As long as everyone colludes – behaves in proper way, and has in mind that their actions will result in reaction of other party – everything goes smooth, and everyone is happy.

    Similarly in F/OSS as long as everyone works in the best interest on themselves AND community, community grows. But if something goes really wrong, whats important is the veto players – people who can make decisions. As if the guests might not like what hosts do, they can go to the other place, same with software, if we don’t like main contributor, we can fork it. But it comes with consequences. And until radical decision to quit is taken, the current host/developer has a strong veto (and control) in their hands.

    So in F/OSS still exists some control, veto players are just weaker than in proprietary world (its not just the G8 IT companies). But property owners are not the only stakeholders, nor the veto players. Governments can issue large fines (think of MS IE case in European Union).

    In the end, its usually a zero-sum-game, just the weights are distributed differently.

    As for public transport example – 2 companies are NOT monopoly, its DUOPOLY!!!, where we usually have Bertrand or Cournot competition. And with HHI ~ 5000 its very likely they collude – it means everyone understands that his action will lead to reaction of other party and most probably to losses, so they prefer to to keep current state as long as possible. There are many more public transport issues, but it will get too off-topic.

    As for communist regime – it will never be successful, as it is impossible to divide fairly (everyone thinks he deserves more the he gets) and equally (if he gets all he wants/need whats the point of trying continuously doing something good?). Trust me, its not fun.

  23. jpo Says:

    “Sorry, there are people dieing because of unnecessary scarcity. ”
    No, they die because they are poor. And the most obvious reason for people being poor are missing institutions. Their countries are ravaged by civil war, war or crime. Because of this, they cannot build a decent living for themselves.

    Really, give me an example of a large scale hunger catastrophe in an intact society in the last 100 years.

  24. Anonymous Says:

    @Aaron and …:

    By the way to discuss the dimension of this, as Aaron has put it, Free Software is orthogonal to capitalism. You can say that, but you have to admit in the same moment that this means a limitation to capitalism. Not for no reason do big private monopolies (as part of the portfolio of the rich elite), which are part of mixed investments like the ones of the Gate Foundation, call Free Software a root of socialist evil. Their class instinct works very well. Capitalism does not accept orthogonal social infrastructures. That is why they can’t stop pushing DRM and private property oriented surveillance of Internet usage. The Internet is in threat from this capitalism. Anything which can be possibly turned into value is privatized. By the way to add to the air example: The CEO of Nestle things that giving water (and air) value is a good thing. Note: Nestle already has bought enormous amounts of fresh water sources, while now more than 2 billion people have to live without fresh water. You can even see that reflected in pop culture nowadays, as in the quantum bond movie.

    If you read the experiences with privatisation in public infrastructure you only have to look at these aggressive capitalistic monopolies like veolia or big energy entreprises which buy the infrastructure, pull out maximum profits, let the prices sky rocket on the local and limited market skyrock and the same time the infrastructure rotts and jobs are lost. That is why Berlin’s population has succeeded in forcing the goverment into resocialization of the water supplier by a public poll. Prices where raising by more than 15% per year. The same for public housing where now the city of Dresden has sued a big investment fonds as having completely ruined big parts of the public housing. Or to look at sth. bigger: This is also why BP totally ignored the security measurements to contain a lack…

    If you think that this fits the spirit of free software than I am somehow really worried.

  25. jpo Says:

    @Anonymous: Your examples (that I really find worth some consideration) stem from questionable privatization policies of the last 20-30 years. As I wrote earlier, they are rooted in the so called “conservative revolution” of the Reagan years. However they also make it clear, that one can redress this. This is what Krugmann means with “a market economy with its rough edges smoothed by a strong safety net”. You point out the “rough edges”. They can be smoothed and your examples even show that this is being done: “Berlin’s population has succeeded” and “the city of Dresden has sued”.

  26. The User Says:

    No, they die because they are poor.

    Lol, they are absolutely poor, they do not have sufficent access to necessary ressources – because of scarcity. It would not be a technical problem to provide enough food for all of them, and they would even have to work less. That is btw. independent from dictators, war-lords etc. There are also very poor democracies, e.g. Ethiopia. If we would forget about our meat and organic fuel and intellectual property of medicine they could be easily helped, and that would mean terminating scarcity of food and medicine.

  27. Lukas Says:

    No, they[Red Hat] are not, they may be utilised for capitalistic value creation. But producing Free Software itself is not capitalistic value creation, because it does not create something valuable at the market, it could help.

    Ahmm, so what you are saying, that developing Redhat gives no value to them, (especially since anyone can provide same services as they do)? Who come they are in S&P 500 list with market capitalization of 11855,882 million USD? :D

    If a local restaurant cleans up area around it, it also reduces scarcity of nice environment. Does it also goes against capitalism?

    The fact, that someone else can make use of what you do or create, can be named as the spillover effect. From what I have heard, most KDE hackers are either working for F/OSS related companies, and are committing in their interest, either commits, because those hacks makes their lives easier, either they are students, and creating F/OSS is a great way to learn. In all cases they do care about community, but in most cases they initially started supporting F/OSS because of self interest (even if it was to satisfy curiosity).

  28. Anonymous Says:

    And for the positive site: If you really like the way people join and work together freely in free software then why not transfer that on other parts of the society as well. See the http://openfarmtech.org/weblog/ project or things like the village telco project. Of course they can still sell the products on the market, but at the same time they are able to produce parts or the products themselves after their needs and without market dependency.

  29. Anonymous Says:

    @Lukas

    The self-interest argument is in now way an argument for capitalism. Capitalism is the society where you are only free to give yourself freedom not others. You can only get rich in one way, all alone. Of course you can have some friends and even some people you can support, but you always have to be brutal to more people to achieve that. I think in Free Software you don’t have to be brutal to fulfill your job or entreprises needs, because your intersts fit with the intersts of both your employees and your clients. Your employees know that they don’t loose their right to access and use the code which they have written and contributed (so they can found their own company or can at least move to a better job from a different company on the same source code). And clients are happier because they become vendor independant. This means free software is something where your personal interests don’t conflict with others, because you open up the resource. This is what is really necessary to succeed capitalism. A way where you can pursue your personal intersts by at the same time maximizing the freedoms of other as well. In software it simply makes the most sense, but this doesn’t mean it makes no sense for a different economy either. It is a tautology to say that you act egoistic. Of course everybody does, but the ways reality allows you to be egoistic is the freedom you have.

  30. g Says:

    @Lukas: I agree with most of your points. Of course, the maintainer has a strong veto and control in his hands, but this control is only given to him so that the development happens orderly. The main goal is quality of the software, the maintainer only gets so much control in order to guarantee the quality. In capitalism (like in the jungle) the main goal is control and producing quality (if it is produced at all) is only a means of obtaining control (rent-seeking, thanks jpo for the interesting link, is another means). So the bases of capitalism and FLOSS are diametrically opposite.

    In the public transport example there was actually a monopoly because each company operated in a separate area, only the travels between two regions were shared. If you travel inside one region you can only use the single company that exists there. On the other hand, the internet provider example is an example of duopoly (in which both are happy with their current market share and surcharge their customers).

    @jpo: missing institutions are not the only reason, dictatorial regimes are another one: see Romania in the 1980′s or North Korea, there were large hunger problems there although the necessary institutions existed. In Romania the regime even exported wheat to the Soviet Union while the people were starving.

  31. Lukas Says:

    @Anonymous

    You have pointed a serious issues, where local governments (and people who elected them) failed to do their job. If a chain-saw hurts a person, its a fault if the person, not the tool.

    If someone develops a porn network based on foss, or terrorists will use Linux to plan bombings, would it make foss guilty for the crimes against humanity?

    Nor capitalism has values inside, nor foss. The values are within the people behind it. And if some would try to sum wherever is more good people behind F/OSS, or behind capitalists (think of small business owners too) i can’t predicts which group would be bigger.

    But we are turning to too negative side. We should focus more on looking on positive examples when both capital and foss makes a society better of.

  32. Lukas Says:

    by capital I also mean colleges and universities (whom might be private too) can provide us with tools to create good…

  33. Anonymous Says:

    You think private education is good? The best educated countries in the world, e.g. finland have a strong public education system with a lot of offers for adults as well. I can’t recall private institutions having an impact on the overall education (take Britain for example).

  34. jpo Says:

    @The User: I think we are in some kind of violent agreement. What you say is “It would not be a technical problem to provide enough food for all of them”. So, if this is true (and I think it is), than “scarcity” in the sense of “there is not enough to feed everybody” is not the problem. The problem is, that people cannot afford food despite the fact that there is technically enough to feed everybody. So, if they cannot afford it, my initial assessment stands: people die of hunger because they are poor, not because food is scarce. And the reasons for poverty are well researched. And in most cases it comes down to a lack of institutions. The worst famines of the 20th century happened when existing institutions were ground into dust: http://en.wikipedia.org/wiki/Holodomor and http://en.wikipedia.org/wiki/Great_Leap_Forward.
    Can you elaborate, why you started your comment with “LOL”? I mean, what was so funny in “People die because they are poor”?

  35. Anonymous Says:

    And to add to your analogy. Capitalism is not an “objective” tool, if something like this exists. It is a social way of organization, which can very well be changed with radically changing the tools. If you have a look at free software than you will see that the openness and growth of the projects has an impact on code quality and modularity which then creates a whole new level of openism for new usages.

  36. jpo Says:

    @Anonymous: You might have heard about the MIT (http://en.wikipedia.org/wiki/MIT “The Massachusetts Institute of Technology (MIT) is a private research university located in Cambridge, Massachusetts.”) or Harvard (Harvard University is a private Ivy League university located in Cambridge, Massachusetts).

  37. Anonymous Says:

    @jpo The Reagan area came, because the social welfare state of the prosperous boom phase after the second world ware came to the serious stagflation crisis in the 70ties, so the only conclusion (when keeping capitalism) could be to attack the social welfare state to raise profits again. This worked relatively well, but at the same time brought an economy completely fired by bubbles (take japan in the late eighties as the first crisis). The ultimate bubble break is yet to come as the bubble has only been transferred to inflation in the usa and europe, where both currencies are already under heavy pressure and inflation hits the private spending.
    The social democratical illusions are over. Although the northern european states had some successes by e.g. copying educational concepts of the gdr and keeping a large welfare state, global capitalism with its free financial transfers causes total competition with the oppressed of “third world” countries. The last ten years of social democratical (also called socialist in many european and american states) politics has brought no political perspectives but only a means for additional privatisation and tax reduction.

  38. Lukas Says:

    Of course you can have some friends and even some people you can support, but you always have to be brutal to more people to achieve that.

    Yes, pressure under FOSS is way smaller, than in some private company, but it usually means in private company you will get premium salary compared to working foss oriented company. If you don’t, you should leave.

    Well, being persistent !=brutal. Being brutal > playing on the edge or on the gray zone. Playing in the gray zone > more uncertainty. More uncertainty > more risk. More risk > you have to pay larger premium. And capitalists hates playing more :)

    The only thing why in some cases brutal tactics works is corruption (since big can buy immunity, no more risk) . And corruption is almost #1 enemy for any society :(

    @g, but the developer still HAS control, because community agreed to give it to him. Same, the private property is just an agreement within human race.

    sorry, i mixed up internet providers and public transport :)

  39. The User Says:

    @g
    Control and scarcity are strongly correlated, something which is not scarce does not have to be controlled, and if there is control, it will keep scarcity because it can benefit from it. I do not know what you mean with “communist regime”, in communism there is no regime, you probably mean a government following communist ideals, but that is not the important point: We have to remove control, and that for we have to use technological opportunities. E.g. only few percent of the people work in agriculture in developed countries, and that efficiency could be used to end scarcity. For other immaterial values the transfer from Free Software is of course trivial. Without scarcity “dividing fairly” is not a problem, because everybody can get what he wants to get. Nobody thinks he would deserve more bread than his neighbour. So Lukas’s anti-communists-statements do not matter, I have never been talking about “dividing fairly”.

    @Anonymous
    Thanks for talking about “the spirit of free software”, that emphasises an important point.

  40. g Says:

    @jpo: MIT and Harvard are great (and possibly (I simply don’t know) superior to Finland) for those who have enough money to get in. The USA is full of idiots so the private school system fails at educating the large population in the USA, actually the USA must import brains in order to maintain their technological advance. Finland produces its own brains and succeeds in educating a large part of their population.

  41. The User Says:

    @jpo
    Those universities allow independent research – that is a good thing. A bad thing is that most people are not able to afford studying there. You cannot call that freedom… Public schools and universities are really a good idea, in Germany everybody can afford studying and the private institutions are not generally better (they may be better in some specialised areas), usually you can get better and wider (which is a good thing!) education at public institutions. The reputations of Harvard and MIT are bettter, but I do not think that would be different if they would have been founded from public funds and the difference is probably not that important, even at unknown universities there is usually a lot of serious research integrated into international cooperation. @g I am sure even the Finish professors are usually highly skilled people. ;) Agree with you.

  42. thomas Says:

    Oh dear.

    First off: there is NO link between capitalism and *free* markets AT ALL.
    In fact capitalism has a rather market destroying tendence (concentration, monopoly) – the (free) “market” has to be actively kept by outer instances (the state, antitrust division for one instance)
    Nevertheless, capitalism does neither require markets nor do markets necessarily lead to capitalism (maybe re-read the definition for capitalism)

    Second: markets do not “rely” on scarcity but they actually are a way to allocate limited resources and many ppl. believe they are the best known way (and communism is apparently not…). True is however that without any scarcity there would actually be no requirement for a market.

    Third: even Marx explicitly talked about “Utopia” – he actually might have thought that the industry would provide this (and in a certain POV it actually did, compare the live of the “poor” in a highly industrial nation to the one of the “rich” in an agricultural one…) but not only the demands grew with the resources but also scarcity is ONMIPRESENT. You cannot remove it. Nowhere. Your lifetime is limited, even if you *could* have everything you cannot *experience* everything, what is the same as not having it in the first place. There’s your ultimate scarcity.
    One possible driving scarcity in the F/LOSS field could simply be acknowledgement (“i can do better”) – and we’re still ignoring F/LOSS as an idustrially used concept to lower risks or focus on core competences.

    Fourth: F/LOSS is actually (near) the purest form of a free market – the http://en.wikipedia.org/wiki/Perfect_competition, since it does not only deal with intangible goods (information) but on top of that removes any exclusivity from the information (which is usually “expensive to create, cheap to copy”) what means that I cannot rely on what i’ve gained yesterday and need to advance everyday if i want to stay on top of things. An imporant consequnce (and argument pro F/LOSS) is that i can and should focus on what i can do best (and rely just on others work for the rest) what implies a perfect resource allocation.

    Now onto your title:
    Capitalism ./. F/LOSS – this is basically both: a nobrainer as well as nonsense, since capitalism is about private property (meawhile read the definition?) what is F/LOSS obviously not.
    The question is whether this actually implies a conflict, ie. what about capitalization of information.

    Basically this no problem and happens and happened all the time – by keeping information exclusive.
    This is certainly not F/LOSS but it’s neiher a big deal as it doesn’t hinder alternative concepts.
    Since a free market leads to better overall outcome than a monopoly, (except for the monopolist, that is ;-) you can just rely on results of game theory (inifinite repetition in heterogenous context – aka “life”) and be sure that it will prevail (in the general context and the long run – this is unfortunate) – w/o external impacts you will not even run into Nash (There will always be market members who try to suck and win from others. They *will* have short term success, therefore it is important to protect F/LOSS against such moves to prevent us running into the Nash equity, what’s basically done by most OSS licenses and it is a very imporatant rule of the game)

    So until here:
    - F/LOSS *is* all about free markets
    - F/LOSS does *not* conflict in general
    - F/LOSS *will* prevail over exclusive information (In the long run and in general)

    You might however and probably be after a *very* specific form of intelectual property, that is “owning” ideas – like patenting them.
    This is in fact a problem, but recently and apparently also identified as such by several major evil capitalists ;-)

    The only good thing in this regard is that (also by historical proof*) remaining social segregations (nations) tend to simply ignore this concept (within their bounds) what puts them in advance since intelectual property by this meaning is a development (and i’m not talking about software development) blocker.
    It starts to become dangerous when there’s only one social group left (all of us) and our corrupt politicians get comfortable with the idea of general poverty while they’re powered by some evil monopolist, but
    a) we’re nowhere near that
    b) that won’t be the social group left for a very long time :-)

    *GB had a major advance in any technology during the late 18th and early 19th century what continental Germany and France simply ignored, copying patented technology, improving it and quickly got into a technological advance against GB which caused it to react – the US did the very same later on and Hollywood was founded to avoid paying Edison in New York =)
    Other example? Two groups of primates. One in each group invents the spear. One of them “shares” the idea with his fellows, the other doesn’t. Result in case of conflict between the groups?
    Why do you think humans have such complex communication abilities? Fun? Some god being bored?

  43. jpo Says:

    The social democratical illusions are over. Although the northern european states had some successes by e.g. copying educational concepts of the gdr and keeping a large welfare state, global capitalism with its free financial transfers causes total competition with the oppressed of “third world” countries.

    Ouch, a hard core commie. The sloppy Socialists are at an end and the world revolution will come really soon now.
    Well, two of the oppressed “third world” countries account for 1/3 of the world population: China and India. And both countries were able to lift more people than the whole population of Europe and North America combined from extreme poverty. And guess why? Because they embraced their own flavor of market oriented reforms. Other examples: Vietnam, Brazil, Indonesia. No, the old G7 might indeed be in trouble, but capitalism is more alive than ever before.
    When Wall Street was in meltdown two years ago, Shanghai was hiring a lot of the investment bankers.

  44. Lukas Says:

    Anonymous Says:

    You think private education is good?

    YES I DO.

    Both, private and public, can be good, but once private educations institutions has enough credibility to loose for selling paper-diplomas, it starts to overcame public education. While quality of graduate can be equal in both cases (and usually it is), the cost to educate a single person in public universities is enormous.

    1) Average staff person in public institution has 0 interest on looking for more economic solutions, since its not his money he loose.
    2) He is usually not accountable for his actions, as long as they are not crime.
    3) Public institutions gets funding based on political reasons, not rational or economic. If they don’t soak up these funds, they loose them.

    Those overhead costs could be spent on renovating parks, science research, you name it.

    I study in a private university, and I can tell you, that quality of education (the same program) is way better than in 2 other large public universities I’ve observed. Interesting thing, that since last education reform (that was written by true idiots) some students had to start paying for the education. It led paying students started to demand for quality (without being in treat to be expelled) and university had to start changing.

    Conclusion, in developed societies both private and public models works well. In developing (or the ones with high immigration), private does better in most cases.

  45. jpo Says:

    A bad thing is that most people are not able to afford studying there. You cannot call that freedom…

    Um, not everybody has to be able to afford it. Only the rich have to pay. Poor gifted students actually get a scholarship.

  46. g Says:

    @The_User: you are right: we have to remove control. And yes without scarcity there is no *need* for control (that is why I said that the *existence* of capitalism depends on scarcity; but its functioning depends on control) although control may still exist (in Western countries there is no scarcity of water yet, but water is controlled for decades by companies). Actually there is already today (and for several years actually) enough food to feed the whole world (I have read several articles and seen several documentaries in the serious press stating this), so there is no scarcity. Yet those who control the food do not distribute it to the world fairly. So although theoretically there is no need for control (because of no scarcity), control still exists.

    @Lukas, “spirit” was the word I was looking for when I said that the bases of FLOSS and capitalism are different, so replace “bases” by “spirit”. Yes, the developer has control, and this is by agreement of the community. Also private property exists by agreement although this agreement has its roots in our animal nature: for example, a squirrel hides nuts for the winter by burying them, thus effectively making the nuts his own property.

  47. Lukas Says:

    Control is not only about using things (making it scare), its also about creating thing in the same domain (to avoid over production).

    KDE devs has no control over who has a right to use it (and its good), but hey have over who has right to create in the same domain. Imagine if KDE4.8 would have 20 different calendar plasmoids by default to start with?

    Going back to water. If water would be as public as air, soon it will became scare anywhere – it is not endless resource, and even irrigation (who doesn’t want perfect garden for free) can cause serious issues. Think of dead sea.

    @g
    Ancient primitive societies didn’t have private property, because there was no need for it. It was easy to see who is misbehaving in population of 20-200 people. As communities started to grow, more issues started to emerge, like having many free riders, so some forms of private property started to emerge. Animal nature left a big stamp in our behavior, its not the only reason :)

  48. The User Says:

    @thomas
    Capitalism requires markets, otherwise there is nothing which can be sold. I have never heard about a capitalistic value creation where the produced properties are given away for free…

    Second: markets do not “rely” on scarcity but they actually are a way to allocate limited resources…

    You did not get my point: Free Software is not limited, type “cp”, no scarcity, no market. The same could be achieved in other areas.

    Your lifetime is limited, even if you *could* have everything you cannot *experience* everything, what is the same as not having it in the first place. There’s your ultimate scarcity.

    My life time is not a property I sell on the market to get a hobby, but I am filling my life time with certain activities. The term “scarcity” does not make sense for life time, because life time is not something you can demand somewhere, it is a non-economical value.

    Capitalism ./. F/LOSS – this is basically both: a nobrainer as well as nonsense, since capitalism is about private property (meawhile read the definition?) what is F/LOSS obviously not.

    Why are you that agressive? I agree with you at that point…

    The question is whether this actually implies a conflict, ie. what about capitalization of information.

    Maybe the word “antagonism” is not that good, I am not a native speaker… What I want to say: The ideas are conflicting (as you said private property vs. community), in reality implementations of both may coexist in different areas.

    - F/LOSS *is* all about free markets

    Uh, no? It may be good for competition at certain markets (preventing monopolies etc.), but it does not depend on markets, Free Software is not about property, it is not limited, it is not scarce, hence it is not about markets.

    This is in fact a problem, but recently and apparently also identified as such by several major evil capitalists

    Which ones do you mean? I am not aware of “major evil capitalists” offending patents. Btw. I was not just talking about patents.

    Some god being bored?

    He was obviously bored. ;) Or he is just nonsense. :D

  49. xazero Says:

    Software can be considered a good, and as such, it inherits the properties of one.

    A good has two properties, rivalry and excludability. If a good is rival-in-consumption, it can’t be used by another person at the same time, i.e. a hammer; if the good is non–rival-in-consumption it can be used at the same time by many persons, i.e. Air-TV. If a good is excludable, it can’t be used by people that haven’t paid for it, i.e. a computer; if a good in non-excludable, you can use it without having to pay, i.e. the night sky.

    A good which is rival-in-consumption and excludable is known as ‘private good’ (i.e. a computer), and a good which is non-rival-in-consumption and non-excludable is known as ‘public good’ (i.e. the night sky). There also can be other combinations, like internet, it is non-rival-in-consumption but it is excludable (club goods) and candy in a piñata is rival-in-consumption but non-excludable ;) (common goods).

    Said that, we all have clear that software is non-rival-in-consumption. The question now is whether software should be excludable (club good) or non-excludable (public good).

    Both parties have good reasons IMHO, but I don’t yet have a clear personal opinion, I might become a KDE/Linux user or stay a windows user. Right now I’m just a college student that wants to know everything.

    BTW, in my not so humble opinion, RMS-like view on software is anti-capitalist and socialism BS (far left totalitarian), but I like the Linus approach on software. But I also have ambitions, I want to konker the world so I sympathise with Bill Gates.

    Even though I’m Australian, English is not my first language, so I apologise for any spell/grammar errors.

    Saludos.

  50. The User Says:

    Ouch, a hard core commie. The sloppy Socialists are at an end and the world revolution will come really soon now.

    It is true: Those Social Democrats do not bring anything.

    Well, two of the oppressed “third world” countries account for 1/3 of the world population: China and India.

    I think he did not have developing countries in mind.

    No, the old G7 might indeed be in trouble, but capitalism is more alive than ever before.

    At which price? China, we love you! We love authoritarianism, and call it beloved capitalism and free markets.
    Of course you do not have to care, you do not care about human rights, as long as the beloved capitalism is spreading… Btw. you should no that China is definitely neither a free market economy nor a welfare state.

    About scholarships: Yes, there are scholarships, that is good, but it is not fair. You may be a bit to “bad” for a scholarship, and then it depends on the capital of your parents if you can go studying and where.

  51. The User Says:

    @xazero
    It is nice that Bill Gates is donating money, without it it would be worse. But seriously: The capital of all those billionaires who cannot ever spend their money is much higher than the overall GNP of many, many undeveloped countries, you can check it. The amount of money needed to overcome absolute poverty is usually small, thus such extra-amount would be far less than all that money of the billionaires, using real reallocation absolute poverty could vanish. And as I said previously: staple foods really do not have to be scarve. When having that (and other points, e.g. mentioned in the previous blog-post) in mind Gates’ efforts are not that fantastic.

    Even though I’m Australian, English is not my first language, so I apologise for any spell/grammar errors.

    Just curious, what is your first language?

  52. The User Says:

    @Lukas

    Going back to water. If water would be as public as air, soon it will became scare anywhere – it is not endless resource, and even irrigation (who doesn’t want perfect garden for free) can cause serious issues. Think of dead sea.

    What is your point? I talked about non-scarcity, of course water is scarce by nature, but it may change with better desalination technology. Btw. it is “scarce”, not “scare” (though you can say “scarcity is a scare”).

  53. The User Says:

    @g
    Water, food and “intellectual property” are scarce, but that is just because some powerful people want it to be, it is not necessary. Well, we agree, that is just about terminology.

  54. g Says:

    @The_User: yes, we agree.

    I guess that xazero’s first language is Spanish: his name sounds Spanish, he talks about piñata (a Mexican object according to Wikipedia) and greets with “Saludos” (definitely a Spanish word).

  55. Lukas Says:

    I’ve recently read an inserting article about so called LOGISTIC ANALYSIS. Long story short:

    While saturation of the “products” is well explored in biology, chemistry etc, in economics capital saturation is not. Its well known that liquids tend to behave differently once they get fully saturated with given material – you can’t smelt more salt in a single litter of water, then it fits. each next g. of salt that can’t smelt, will turn into pellets and might start causing problems, unless it gets properly filtered.

    Similar effect can be seen in real life. Once markets is under-saturated, everything goes like a mess or mad. When main privatization came in e.g. Russia ( http://www.youtube.com/watch?v=84MsRuC-1l8&feature=relmfu worth seeing), there was no capital, so it was dead easy for new oligarch make their fortune. Same scenario was impossible in e.g. U.S. during the same period.

    Once markets gets well saturated (but not fully, yet), everyone is happy, lots of jobs, economy grows, like in pre-financial crisis era.

    The question is how to prevent markets to getting fully saturated? As once they became, no matter what you say, every theory falls, as rules of the game changes. Most traders just start to gamble from someone else money, inflation rises, so people starts buying real estate (it is expected, real estate prices will compensate inflation), then bubbles comes in, then bad things start happening, that is damn hard to stop.

    While there could be many theories, why marked misses the point then it starts getting over saturated, one idea is interesting – money was NO longer actually scarce in Wall Street. And without any fuses, you can read in history books about it…

    My point is that turning software into non-scarce resource is no the best for individuals and society. During last years I have written thousands of lines of code, some less worthy, some quite good. And besides it was beneficial in education perspective, majority went as waist, since none is actually using it, just because there are too many alternatives, and I, as individual, have no time, nor will, to advertise and support it to get on the top. Its a simple example of overproduction.

    Society lost, because I could have used that time creating something more useful, like writing for KDE. Instead I was forking and playing with one of the millions of random projects, interesting to play, still worthless in real life. I do believe that having foss more scarce, could have left to more quality software in the end. I’m not saying its not a die hard statement, but in some cases FOSS cannibalizes itself.

    The hard question is – how to find that golden point in middle?

  56. xazero Says:

    The capital of all those billionaires who cannot ever spend their money is much higher than the overall GNP of many, many undeveloped countries

    Agree, I meant what Bill accomplished… he made his company to reach the top. Wether what he did (or he does) was (is) right or not is a different problem.

    Also, as I said, I don’t know whether SW should be excludable or not, but in a capitalist world you need to get paid, either by an employer (can be to develop FOSS o r not) or by the end user.
    Companies whose main product is a service or a non-SW product (i.e. Google, a Bank) can benefit from FOSS, but companies whose main product is software, can’t release under a FOSS licence (i.e. Microsoft), that specifically applies to game development, FOSS will never reach the level of commercial gaming because there is no profit anywhere.
    That is why I think FOSS is more like a software pool for companies; it only excels where there is a profit for a company.
    So yes, I think FOSS (non RMS style) can fit nicely with Capitalism. But I believe both sides are needed.

    Just curious, what is your first language?

    Spanish

    If anyone wants to discuss with me, you can write me to: xazeroag at gmail dot com

  57. Lukas Says:

    About the money in the pockets of the rich.

    I have no doubt – redistributing/reallocation of USD from the billionaires, to poor would help poor to recover from poverty. But in short time only. And with the great cost for the remaining society. Leaving aside, that most aid comes as final products, once all will be eaten, poverty would comes again, as it wont change the culture, nor the education :(

    Redistributing is likely to increase the amount of cash, and unless we can start producing and transporting more overnight, inflation would eat most of it :(
    Trade deficit within rich and poor countries will rise, causing panic (great depression started mostly due to panic). Since we are on Bretton Woods standard economy won’t collapse, but still lots of problems for rich countries.

    Also majority of “money” billionaires has is actually not real money – most of it is “expected value” either fixed tangible assets like real estate, machinery and employees, either intangible assets like brands or IP. Neither is easy to move or reallocate, and trying to do so will just destroy most of the value it has.

    In the end US will print enough dollars to recover, while the rest of the world will sit in the dust :(

    Bottom line – pushing any ideology must be very well weighted, wherever collateral damage in the process would really be paid of in the end.

  58. damipereira Says:

    First, I’m not an economist and it’s just my maybe uninformed opinion, but I think that if there’s no scarcity, the market can’t exist, if software would be made by a machine instantly an easily, an freely distributable, there would be no market for selling it. But still there are some side markets to the main one of developing software, like support and distribution.
    I think that free software is to software market what automation is to manufacturing, is a new more efficient way of producing software, it’s better because resources are shared. lowering the price and reducing the competence a lot. This would destroy or weaken the market of propietary software, because there would be no scarcity of software.
    Capitalism is all about making profit out off stuff, there is the party that wants to make profit out of software development, and others which want to use that tools to make profit (software users), FOSS is antagonist to propietary software development, because by lowerint the , but is orthogonal to any other market, because from the point of view of an external industry, they just maximized their profit because of cheaper, easier to access software.

  59. thomas Says:

    Capitalism requires markets, otherwise there is nothing which can be sold.

    Capitalism is not about selling but about capital dominance over things like work etc. please read into some basic economic theory or define your terms.
    Markets are not about *what* can be sold but *how* (*not* where) is “sold”.
    Markets are aktually not about “selling” (this is a very limited view on them)
    And ultimately:
    a capitalist can be a perfect or defacto monopolist on a non-optional good in which case there’s no operative market, yet he will sell stuff (but in this case the officials /will/ step in)

    My life time is not a property…

    Yes, is. http://en.wikipedia.org/wiki/Opportunity_cost
    You cannot just isolate markets (except in a schoolbook) and the driving point is that the idea to somehow remove scarcity and if only partially is delusion unless you actually do live in Utopia. This is the fundamental failure of the socialists who read the parts of Marx they were interested in and ignored the rest.

    Why are you that agressive?

    Didn’t mean to be (nobrainer, like “truism”).

    Uh, no?

    Uh, yes? Please, prettyplease: Get yourself a book on economic theory and try to understand what the concept of a market is. Then what the requirements of a free market are and last but not least what a perfect market is.
    It is *only* about matching interests. Everything else is some picture of a particular market in your mind that you’re applying on “markets”, blurring the term. (Hint: money is *not* related to markets, but just a stupid meta-good)

    Your problem is probably to look at things from the wrong side.

    There are two basic market types: demand-driven and offer-driven.
    If you purchase a car, you may think “i am buying a car” but if cars sell bad atm, the vendor thinks: i am buying a driver.
    He wants to sell you the car.

    This means: even if (iff) there would be no scarcity on any F/LOSS there would be on users.
    The equity can not just assumed to be stable – you’d have to prove that assumption (and you’d fail – humans are fickle)

    Pot. F/LOSS markets:
    ———
    a) Developers buy users.
    Developers are interested in having many users. This helps them to identify issues, get feedback, ideas – a strong community in their back. Also it may improve their ego ;-)
    Unfortunately developers might have different opinions on things. How a perfect desktop should be, how to manage/store data, whether to guide the user or leave him much freedom….
    Therefore there are different desktops, filesystems… on the one side and the users on the other. Market or not?
    Since F/LOSS implies to share your knowledge with fellow F/LOSSers this market is even perfect on the developers side and it’s pretty much perfect on the users side since they tend to publish their opinions.

    b) Users buy functions
    If you’re not in the lucky position to want sth. everybody’s interested in (less a word processor, but say a fullblown CAD solution) you’ll have to implement it either yourself or ask/find somebody to do so. There are even ppl. offering bounties for bugs, so -F/LOSS or not- do we have a market here?

    c) Developers buy time
    If you’re a developer, you’ll likely have a life next to developing. This implies you’ll have to choose whether to write some code you#re interested in, teach ppl economics or go to bed. Your time /is/ a good and it is damn scarce. This market is proabaly the most interesting one since in a way you are buyer, seller and the good (hello self-slavery)
    Your various interests conflict and you have to assign your scarce time to them as it fits you best. Market or not?

    No scarcity in either market?
    No doubt, the bytes are cheaply (freely) copied, but if F/LOSS is just the bytes, what are you?

    I am not aware of “major evil capitalists” offending patents.

    I didn’t say that they (openly) offend them, i implied: they start to get them more trouble then good and therefore everybody is blindly crosslicensing stuff.

  60. The User Says:

    Yes, is. http://en.wikipedia.org/wiki/Opportunity_cost

    I know about opportunity costs, but I think that this approach is inappropriate, trading everything off in life is just wrong, I want to have a fulfilled life, I do not compute the opportunity costs. As I said: I am not a homo economicus, and such people do not exist. Keep in mind that such values etc. are just models, nothing more.

    Capitalism is not about selling but about capital dominance over things like work etc. please read into some basic economic theory or define your terms.

    Could you give me any example of (not instantly collapsing) capitalism without demand, without market?

    Then what the requirements of a free market are and last but not least what a perfect market is.

    I know about perfect market conception and – it is utopia, you should know that. You certainly cannot achieve it without radically breaking ownership conditions, otherwise there cannot be equal contracting parties. And it is questionable if it would be stable without interventions. But removing scarcity is achievable, it is achievable in steps, you do not even need a revolution.

    idea to somehow remove scarcity and if only partially is delusion unless you actually do live in Utopia.

    With technology it can be achieved, Free Software is an empirical proof of it.

    This means: even if (iff) there would be no scarcity on any F/LOSS there would be on users.

    Maybe you should inform yourself about scarcity, it means that not all demand can be satisfied, “scarcity of demand” does not make sense (at least not in this context), the software does not care about how many users it has, because it is not even living! You are trying to force everything to fit in a market model although it does not make sense.

    Market or not?

    Of course that is market, and you are right that it does not have to be monetary (it is just about allocating scarce properties by exchange between demanding and offering parties, but critisising the usage of the word “selling” is really nitpicking…), but there is no market of Free Software! The software itself is not scarce…

    I didn’t say that they (openly) offend them, i implied: they start to get them more trouble then good and therefore everybody is blindly crosslicensing stuff.

    Some get into trouble, some benefit or try to expand patents… Some people call that “free market”, some benefit, some get into trouble, but it is not even that, in fact it is market limitation, in a malicious form, however, that is off topic.

  61. The User Says:

    Agree, I meant what Bill accomplished… he made his company to reach the top.

    In my opinion it is not desirable to become a billionaire or even that there are billionaires in the world. It definitely cannot be fair that a single person is valued a million times higher than another one, even if he is a clever guy.

    that specifically applies to game development, FOSS will never reach the level of commercial gaming because there is no profit anywhere.

    Well, for games it is particularly hard for Free Software and your statement is probably true for traditional companies, but there are alternatives:
    http://en.wikipedia.org/wiki/Street_performer_protocol
    http://gamingfreedom.org/

    Particularly you have to notice that there are sophisticated free game engines, it is more work to create the content of games.

  62. The User Says:

    but is orthogonal to any other market, because from the point of view of an external industry, they just maximized their profit because of cheaper, easier to access software.

    It depends on the definition of orthogonality, well, they do not exclude each other and they do not recquire each other, that is a possible definition of orthogonality. But they are not independent, Free Software is contrary to the spirit of those traditional, other markets.

  63. thomas Says:

    I know about opportunity costs, but I think that this approach is inappropriate

    “I am right because everything else in inappropriate”?

    trading everything off in life is just wrong.

    Are you willing to share your ultimate insights about the absolute wrong and right with others? :-P

    This is not about philosophy. If you Isolate system aspects you randomly open the system and can get to any kind of result.

    and such people do not exist

    Yes, they do. Everybody is. It’s a matter of defining the economic system, ie. the individuals preferences etc. – nobody is mathematically optimizing towards a economic (or even monetary) optimum, but you are always following your (temporary) preferences.
    And overmore: that’s not even related because of the above. No matter what you claim to be – opening an observed system is rendering your observations useless.

    Could you give me any example of (not instantly collapsing) capitalism without demand, without market?

    Without demand? No – i don’t think there’s anything without any demand in this world.
    Without a market? I did. A monopoly does not cover an operative market (the market has failed) – or would you say that there’s eg a “gasoline market” (and that’s not even a real monopoly, i didn’t say so. please don’t sue me statoil et al ;-)

    I know about perfect market conception and – it is utopia, you should know that.

    That is why I said “(near)” – and probably as near as it gets. (But I wouldn’t insit on that ;-)

    But removing scarcity is achievable, it is achievable in steps, you do not even need a revolution.

    Locally: yes. Globally: NO! At least your time is scarce (i feel like i repeat myself while talking to ELIZA…)

    Maybe you should inform yourself about scarcity, it means that not all demand can be satisfied,

    Sounds like a lexicon entry. Sounds good to me ;-)

    “scarcity of demand” does not make sense

    And who has claimed otherwise?
    You have a very limited and typical customer view on the market like it’s a supermarket. But on a market both sides have demands (car, money) and offers (money, car) Therefore the market can favor either side – “buyer’s market” and “seller’s market”, both can currently hold the scarce offer (money or car) and the equilibrium is usually never stable, ie. never present.
    You might try to argue whether this can be used on F/LOSS, but denying the above tags you a fool, sorry.

    the software does not care about how many users it has

    Neither do money or cars. It’s not the (meta)goods that count here but the market players.
    Leaving aside the term “care”, the fact that present information are not scarce (or by artificion) has not only not been denied but even explicitly stated by me – the important term here is however present

    Again: Once the information (whether software or the weather forecast) has been created it can be copied a zillion times without any loss on any side, but to assemble it the creator has to sacrifice opportunity costs, this is why this is to f*** important ;-)
    Those opportunity cost are hard to measure and vary with the condition (Stephen Hawking has certainly lower opportunity costs that a guy with a playmate waiting for him) but they do exist and you cannot take them away (but for yourself, what requires external supply of your casual demands like food etc.)

    So, trying to stress this and bring it to an end:
    There is no market for present public Information, no. Not at all.
    But there is a market for Information (software) generation – always. Ever. F/LOSS or not.
    And while (public) Information is not scarce by definition, everything else is and whatever you do: you cannot change that because this is neither Utopia nor Schlaraffia, “scarcity” is the “natural” form.
    (The socialist states learned that the hard way when basic goods went scarce because nobody botherd to create them – ever been in a GDR “supermarket”?)

  64. The User Says:

    trading everything off in life is just wrong.

    E.g. people have ideals, aesthetics and morality which are orthogonal to economic values. Of course there is corellation, but they are not completely dependent, some examples:

    • You could kill a person and you would be safe and get some money, you may not do it because of your ideals (and do not tell me you would not do it because you would feel bad after it, that is not the only reason and you can imagine situations where there are greater risks than “feeling bad”)
    • Economy cannot put a value on the option die commit suicide – not because there would be incomplete information, but because opportunity costs etc. do not make any sense then.
    • It is quite often the case that you are aware of possible long-time economic disadvantages of an action, where you know them to be more significant than the expected short-time advantage, but you do it for aesthetic reasons, because of your ego or whatever.

    but you are always following your (temporary) preferences.

    And everybody has preferences which are strictly against economic behaviour, e.g. you may be tired and want to sleep a bit longer or something like that (do not tell me you are more productive when having slept longer, that is not the personal reason).

    Neither do money or cars.

    Of course they are, I cannot simply get any number of “copies” of cars.

    or would you say that there’s eg a “gasoline market” (and that’s not even a real monopoly, i didn’t say so.

    Of course there is market, there is supply and demand and the ressource is scarce, however, it does not work very well, as you said. ;)

    That is why I said “(near)” – and probably as near as it gets.

    I see a necessary device to achieve that: redistribution. If anybody would be serious about trying to reach perfect market, that would be necessary. Otherwise the are just opportunists.

    Locally: yes. Globally: NO! At least your time is scarce (i feel like i repeat myself while talking to ELIZA…)

    Hey, do you want to insult ELIZA? :D Seriously, of course it is not possible for everything, absolute removement of scarcity is impossible, like absolute freedom. But that does not mean imply we should not try to reach it.

    There is no market for present public Information, no. Not at all.
    But there is a market for Information (software) generation – always.

    Yes, we agree at that point.

    “scarcity” is the “natural” form.

    That is right, e.g. food is scarce by nature, but it can be changed such that it will be effectively not scarce (when ignoring theoretical limitations, there are also theoretical limitations for information – storage, speed of light etc. :D).

    (The socialist states learned that the hard way when basic goods went scarce because nobody botherd to create them – ever been in a GDR “supermarket”?)

    There was a lot more broken there, consider how few people are currently needed to produce enough food for our population and how many people there are available. The GDR did not use all technological possibilities, they did not try to be efficient – they followed inappropriate Marxist ideology that everybody should have a job, many many jobs in agriculture, there were state property instead of the claimed common property etc. Off topic…

  65. seller liar Says:

    Capitalism like other systems does not last forever ,but because of system of profit .Profit is corrupt hierarchical system because people does not need to work a lot of time to get 1 million for example. In facto nobody is capable to work a lot of time to get 1 million dollars. Maybe Superman can do this.

    Profit steals workforce (converted in money ) to give for others.

    Every organization can profit some time but not forever because technological innovation reduce the cost of product .

    In fact there are not productive private property ,because all productive property needs popular investment. When people buy that product people are paying the factory to work for example .All profit from some company comes from us.

  66. seller liar Says:

    Capitalism is wrong because it uses scarcity to put a cost on product. Scarcity can be created and does not consider work cost. Capitalism should use work cost to put a cost on product .Not scarcity.

    Oil for example does not cost 8$/gal to product . This is hiperinflated cost based in scarcity .And oil is a natural resource .In theory all natural resource on the planet should be divided equally for all people .Natural resource must be FREE.

  67. jpo Says:

    Here is an article by Matt Asay:
    http://www.theregister.co.uk/2011/05/31/open_source_givers_and_takers/ quoting Linus:

    But I _also_ think that it’s great to see all the commercial companies that use open source simply because it’s good for business. That’s a totally different ideology, and I think that’s a perfectly good ideology too. The world would be a _much_ worse place if we didn’t have companies doing things for money.

  68. jpo Says:

    @seller liar: Read about the “Tragedy of the commons”
    http://en.wikipedia.org/wiki/Tragedy_of_the_commons

  69. seller liar Says:

    @jpo: Natural resources should be Free ,but every user just only use a limited quantity of resource . For example if we have 10 units of water and 10 iron for 10 people then it will be 1 unit of water and 1 unit of 1 iron to 1 for earch person.

  70. jpo Says:

    @seller liar: Read about Russia’s Voucher program (http://en.wikipedia.org/wiki/Privatization_in_Russia)

    The vouchers, each corresponding to a share in the national wealth, were distributed equally among the population, including minors.

    The end result: a very bad case of oligarchy.

  71. The User Says:

    @jpo
    I have no problem with Torvalds’ statement. I agree. Of course you have to assume ceteris paribus. If they would do the same capitalistic stuff but would not use Free Software, it would be of course worse.

    Read about Russia’s Voucher program

    Yes it failed.

    Most people, however, were not well-informed and/or were very poor and were quick to sell the vouchers for money, unprepared and/or unwilling to invest.

    Seriously, that is off topic.

  72. seller liar Says:

    @jpo
    Companies are not natural resources.

  73. seller liar Says:

    In my opinion ,non natural resources must stop to produce profit and give the company property to workers from company. Companies in my opinion should only to produce profit for industrial investment .Not personal use .Nobody should to gain more than 20 k dollars .

  74. seller liar Says:

    About Russia Voucher program

    It’s not a good solution because all people sold coupouns for oligarchies.The oligachies then used the company to produce profit .The money paid by coupouns returned to oligachy because profit system.

  75. The User Says:

    Once markets gets well saturated (but not fully, yet), everyone is happy, lots of jobs, economy grows, like in pre-financial crisis era.

    Do you no what that means? There should be proprietary software, there should be some people starving because otherwise efficiency would not be optimal although it is already pretty good with modern technology. That is obviously against human rights. But, well, for some people their favoured economic system seems to be more important…

  76. Eclecticdave Says:

    Interesting (and long) discussion! I can’t be certain if it’s already been mentioned (I only skimmed parts) but for me the key is that FOSS (and all software really) is non-scarce once it exists, but the production of it is scarce – there are only so many hours in the day.

    Economically speaking “non-scarce” means non-rivalous and non-excludable – someone above tried to argue that software is non-rivalous but there was someway it could be excludable – sorry but I don’t think that is possible for software and certainly not for FOSS as I think you would have to have control over the distribution to achieve this. The upshot is for software the “marginal cost” is zero (or very nearly) which means the price in a free market will tend towards zero.

    The production of software on the other hand is a real scarcity – at least while us coders need to buy food and other things – and this is where FOSS can sit comfortably with capitalism. It is a classic business model issue – while a good has a reasonably high marginal cost you can often get away with adding a small percentage to cover production costs, but as the marginal cost drops it becomes harder to do this and once the marginal cost drops to zero it is no longer possible to cover the production costs in this manner. It is then necessary to find another way to fund the cost of production – i.e. you either need to get your customers to pay directly for production (a form of patronism, although in modern times it could be crowdfunded), or you need to find another associated scarcity which you can use to help fund production – which is where the support model for FOSS comes in.

  77. Rudd-O Says:

    Eh. Free software is the most capitalist way of producing software. Instead of relying on intellectual pooperty monopolies to make your money, you rely on productivity and continuous invention / improvement.

    How can someone say that an anti-monopolistic practice — free software — is ANTI-CAPITALISTIC, can solely come from a fundamental misunderstanding of what capitalism is.

  78. The User Says:

    @Rudd-O
    Read my blog-post to find out about the antagonism. ;)
    Seriously, capitalism also works with monopolies, free markets do not. Free Software prevents some market failures (partly by removing the market), but that does not make them capitalistic. You should inform yourself about capitalism.

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