The Economics of Free Software
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Though I've been around for some three years, using Trisquel daily, I've yet to really post in here. Part of my silence is laziness; that much comes from being a programmer. Another part is that I prefer to do the hard work of something before feeling the need to opine about it. However, in this case, I feel compelled to explain.
I was drawn to rms shortly before discovering Trisquel. I read some brief portion of the FSF's site, having gotten there by linksurfing in Wikipedia, having originally started on Linus Torvalds Wiki page. That happy accident has greatly shaped who I am today. As soon as I discovered the FSF and rms, I devoured as much as I could, as quickly as I could. I downloaded gigs of OGGs, read hundreds of pages, and suffered through countless comment threads. All to get my hands on every drop of Free Software philosophy.
I find it so incredibly in line wih my free market economic principles, and my civil liberties stance, that I can't believe I never thought of it before. From a free market perspective, free software simply asserts basic principles of the market: software as a product is created by someone, and can be transferred through exchange in the market. As soon as the exchange happens, the software is no longer property of the creator, but of the purchaser. This is personal property, and respect for it at its finest. Needless to say, not many are interested in the details of economics, so I'll hold off there.
So I got to eventually thinking about how to transform the software industry. How do we grab our culture by the horns and steer it? Restore the principles of freedom to software. Realise that extraordinary profits are just that -- extra-ordinary -- and based off of monopoly control of a resource (that is also not a free market principle). Free software can be made for profit in many of the same ways: produce the software, and sell it to people. The only difference is, the product you are selling respects the buyer's freedom to use it. Will some people then copy the product and distribute it freely? Certainly. There is no ethical problem with that. Will people still buy the software if it can be obtained at no cost? Yes, there will still be purchases. And as Stallman reminds us, it is often that people need help with software. Either fixing bugs, troubleshooting or customising; that is huge revenue.
I know this from experience. I work for a company that produces an internet platform that is free software (though they mistakenly use the term "open source"). We sell support contracts "for the enterprise" and give on-the-call technical support and response. We consult and do customisations for a fee. Unfortunately, the business folk up top thought we should make a proprietary "Enterprise" version to attract the "big businesses". So we did, even though it is nearly identical in source to the free software.
I know the founder; one day, after facing "pirated" Enterprise license keys for our product, he let me know something. Though he was sad that someone tried to "sabotage" him, he wasn't really bothered. "The money's not in the software," he said, "it's in the support." You see, supporting our own product made us enough profit to support paying developers to write it, engineers to support and maintain it, a QA team, marketing, business, sales and more.
Free software is as much business as hobby. Entrepreneurs can start successful free software businesses; they just need to have enough savvy. My dream is to open a free software game development firm and fill a void I have felt is sorely there: high-quality, polished, free-software games.
Thank you to Trisquel, the community and rms for opening my eyes to a better way to live.
Very good reading!
I especially liked that "extraordinary profits are just that -- extra-ordinary" part.
> I find it so incredibly in line wih my free market economic
> principles, and my civil liberties stance, that I can't believe I
> never thought of it before. From a free market perspective, free
> software simply asserts basic principles of the market: software as a
> product is created by someone, and can be transferred through exchange
> in the market. As soon as the exchange happens, the software is no
> longer property of the creator, but of the purchaser. This is personal
> property, and respect for it at its finest. Needless to say, not many
> are interested in the details of economics, so I'll hold off there.
This doesn't seem to be a common view of economics (with "free market"
being associated with support for monopolies and lack of worker rights);
I think mutualists and Marxists have similar views. (I have understood
the association of free software with gift culture and anarcho-communism
before, not noticed the similarity to the labour theory of value so
clearly before reading your post.)
I have seen the arguments for free software being compatible with
businesses writing software before, we need more examples like yours.
Michal,
That is definitely a common misconception. One that even I had. True capitalism (free market) requires the respect of private property above and beyond respect for the state. As such, partnerships or special privileges granted by the state are not, in any way, associated with pure free market capitalism. Really good examples are writings by Hazlitt, Mises, Hayek, Smith, and a great many others.
Subsidies, favouritism, monopolism (through patent, copyright, etc) are all features of crony capitalism (or cronyism). This is a capitalism that is not honest enough to be socialism. :)
In philosophy, I am nearly an anarcho-capitalist.
name at domain
Thanks for the incite to how you got to were you are now.
Looks like if most people used the name GNU/Linux you would have started
at the GNU website and not webpages about Linus Torvalds.
Exactly right. Isn't that a great reason to be referring to it as GNU/Linux?
It is wonderful to have the experience of someone directly "inside" the industry to tell us in details how it works and better, how it could be improved.
Other than that, it is quite good to see that we share the same dream, maybe (if I do not trash my whole future by myself, since I am still young and learning) we will meet again, and other persons with the same dream but without the ability to go ahead.
Once again very nice peace of lecture :D
I am a member!
There are various good examples. Redhat, ThinkPenguin, and others. While most wouldn't associate us (ThinkPenguin) with software development we are funding it.
Some of this is going into new features for the web platform our site is based off. Some of it is going to Trisquel and much more of it is going to other projects. The numbers are not insignificant relative to our current size. It's in the 10s of thousands of dollars range right now (per year). Actually- that's more like what it was. We have implemented some partnerships which I'm hoping has caused an increase of our numbers 30 fold. Not yet conclusive. There are various possible explanations to the week or so of data. We saw a decrease in sales for certain categories of more profitable hardware although an increase in the sales of laptops, desktops, case badges, stickers, and other promotional stuff (mouse pads). The decrease is probably more of a fluke. Next week we might see significant increase in everything across the board if this week was merely a low point.
Honestly, I don't think free software is particularly in line with any one economic system. What it is perfectly in line with is any sort of Libertarianism, including Free Market Capitalism and Anarcho-Capitalism, but also including Libertarian Socialism, or Social Anarchy.
You've already outlined (very elegantly) why free software fits with Free Market Capitalism. Why it fits with Social Anarchy is pretty simple: to work, Social Anarchy depends on sharing and voluntary contribution. Free software allows this; an entire group, such as a Social Anarchist society, can pool its resources together to buy a free program, if necessary (e.g. from a developer in a capitalist society) and share this free program among its members. Then, any member of the Social Anarchist society is free (and probably encouraged) to improve the program as well as other free software. This is just not possible with nonfree software, which would only work against a Social Anarchist society by disallowing the freedoms it depends on.
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