Open Source and Capitalism

By Roger Pickles - Oct 1, 2006

Over the years I keep reading that Open Source is somehow anti-capitalistic, that Open Source is communistic or at the least opposed to the Free Market. What have these people been smoking!! Maybe these people are just all muddled up – and can't think straight. Maybe these people are using some weird definitions of these terms because form where I sit Open Source is totally a creature and out growth of the Free Market. Let met prove it so that even the dimmest among the pundants out there get it.

First let's look at the possibility that Open Source is somehow a communist idea

• Communism says that you do not have any rights to your property. Open Source respects IP ownership and allows the owner enforce his will on his property.  - No match

• Communism requires that you do what you are told to do by the leaders. Open Source communities are all voluntary associations. One need only look at the development of the X server to see that Open Source permits each person to do it his own way and to see what happens when one group tries to force their will on others. - No match

• Communism has one leader with one plan – and everyone and everything must fit into that plan. Open Source says to everyone – do it your way, what ever works for you. - No match

• Communist theory is that everyone works according to ability and receives according to need. No one in a communist society remembers those that produced extra because it was their duty. Open Source says work according to your desire and do with it what you will. We (most of us anyway) in the Open Source community realize that what we receive in the way of "free" software was a gift from the giver. We remember them – we are careful to keep their names and rights statements tied to the code they donated and many of us find ways to give back in some way.  - No match

It looks to me that some mistake the act of giving something away as a communistic ideal. Nothing could be further from the truth. I have yet to see much of anything given away without strings attached by any communist organization or nation. Yet when I look to the capitalist of the world I see a great deal of giving often without attachments. True many gifts have their reasons – many leading back to profit of some kind. No matter the reason it is worth noting that all the great givers of the world are also the great capitalist of the world. So those that give the use of their code are following in the capitalist tradition and not the communist tradition. Anyone examining this issue must come to the conclusion that Communism and Open Source are in reality mutually exclusive. Where one exists the other cannot.

Now lets examine the possibility that Open Source is a Free Market concept

• Free Markets concepts says that producers own what they produce. Open Source respects IP ownership and allows the owner enforce his will on his property. - Check

• The Free Market permits everyone to do what they feel is best for them as long as they respect the rights of others. Open Source communities are all voluntary associations. - Check

• The Free Market does not use central one leader planning (only enough oversight to ensure that people respect the rights of others). Open Source says to everyone – do it your way, what ever works for you. - Check.

Now thats a great match. So Open Source is compatible with the Free Market. How can that be?  Isn't the Free Market and Capitalism all about getting all the money you can? No in reality the Free Market is about, well, the “Free” Market as in freedom. A free person is free to grub about for every dime they can or they may chose to be more giving – and give something away, after all if its their property and they are free then who is to say no. The single greatest error in looking at the free market and capitalism is that people fixate on the money. True, Capitalism is about collecting capital and and profit. What most pundants and some Corporate leaders miss is that there are many kinds of capital. Some forms of capital grows best when you give away some assets.

It is this very nature of capitalism that makes Open Source possible. One can look at IBM and Red Hat to see that yes you can make money by giving away software and its code. Even Novels problems arise from the failing of their old proprietary software at a greater rate than the uptake of their new open source solutions. Many many companies are improving their bottom line using open source solutions. You see the Free Market is about so much more that the chase of the dollar it is in reality a place of free (as in speech) and voluntary exchanges which often may have not a dollar amount attached. 

Now let me climb out on a limb a little

Open Source is not just possible under the Free Market but is mandated by the Free Market. The Free Market abhors a monopoly (including a near monopoly) and will eventually move to crush it. We've seen this many time in the past. How many of the Monopolies and Trusts of the robber barons survive today. Only a very tiny number of these were broke up by the government. The majority fell to market forces.

The software industry is often compared to the auto industry. So lest look at the Auto industry and see just what has come to pass. At one time Ford made something more than 80% of all autos on the road. The government never moved to break-up Ford. Rather what happened was that they were out maneuvered by a few small competitors. Chevy came out with colors other than black and Chrysler new engine designs. These companies quickly learned from each other but not Ford. This lead to Ford coming within one or two car models of complete collapse. Some experts in the field hold that had the totally redesigned '49 Ford failed the Ford Motor Company would have went bankrupt. What happened was classic, Ford grew fat and complacent and just kept making the same old basic models as competitors kept improving and working to offer better and more popular products.

Now lets look at the Software Industry in this light. Microsoft crushes or buys out small start up competitors before they get off the ground. So in comes Open Source software. A product that can not be under bid and is not dependent on a single company for its existence. The first thing to notice here is that Open Source is immune to Microsoft most powerful weapons. Secondly, it uses the best forms of competition to aid it in moving forward. Now it crowds Microsoft and Microsoft continues doing the same old thing. From my point of view the outcome is not in question. Microsoft will get competition and the market will survive weather or not it does.

And Now a Bit Further out on that limb

In reality Open Source is in many ways the purest of free markets. Open Source is competition of ideas and logic in an environment that is nearly organic in its working and often the means of measuring success is in acclaim and kudos and not cash. So it just does not use money as the sole counter of who's winning and who's not. In fact in many ways it is not really about winning and loosing - it is not a "zero sum game".  In many cases because the source is open and shared when one person group makes the a leap of logic or improvement many projects may then incorporate the code and the concepts involved.  So that what happens in the world of Open Source is that as one group makes an advancement others can start there and work up from there so the best code has the best chance of surviving and growing and "the wheel need not be invented again and again". Open Source is a natural working implementation of the scientific method. In the world of proprietary code, on the other hand, the code is kept secret and hidden and unshared so that you have one of two choices to compete - 1. reinvent the wheel  or 2. steal the code.  In that proprietary code is kept secrete I would not be surprised if steeling of code occurs as keeping your work secrete is an excellent means of hiding the fact that you are a thief.  While the open source make steeling of code very hard to pull off it also makes it rather unnecessary in most cases. 

After thoughts and caveats

First: I do push the greater use of Open Source software. Not because I am a zealot but because our non-profit give away computers to the poor that use all Open Source software. We use OS software because it is free and easy to install, thus allowing us to give out many more computers. I therefore push the use of OS by as many people as possible so as to increase the support that our clients can find for their problems.

Second: in reality the United States does not have a Free Market, however, it does pass close enough to a free market that most of these arguments still work after a fashion.

Third: most of the arguments are over simplified for two reasons – many of the pundants seem too simple minded for the full blown version and I wanted to keep this short.

Fourth: I am not in any way implying in this write-up that proprietary software is some how wrong or evil or anti-capitalist. Quite to the contrary, when someone  in the free market makes something they have every right to do with it what they will - and if selling it or the use of it is what they wish to do then they have every right to do so. The free market permits many different concepts of use and I am not willing to say one is more valued or right than another that is for the market and the people in the market place to decide with their dollars and feet.