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Free software has been a cause within the programming community since the early 80s. But as the focus of this NewEconomyCurriculum is economic I am going to concentrate here on two of the most important essays written on the economics of free software. This, unfortunately, ignores the equally important ethical roots of the movement. But these essays by EricRaymond are fundamental in that they represent a shift in thinking about free software. Before these essays, free software could be dismissed from a business perspective as a form of charity. The motivation for writing free software, as layed down by the movement's founder RichardStallman, was ethical. As a programmer, one ought to free one's software for the same reason one should oppose censorship or feed the hungry. It was one of the values of the good society. Furthermore, while free software was possibly a necessity, rather like the charitable provision of medicine to those who could afford no other, it was also plausibly accepted that the voluntary nature of the provision meant that it was patchy and inferior to the proprietory stuff that was engineered by large corporations.

Raymond's essays introduce two key assertions. In The Cathedral and the Bazaar, inspired by his anarchist beliefs, and evidence from the growth of Linux, Raymond argues that in the field of software design, unstructured, unco-ordinated, voluntry efforts to build software are capable of performing as well as, or even better than, centrally managed projects.

He derives rules of thumb for the situations where this can occur. Being free software is essential in that all users have access to the "source code" and therefore can be involved in finding and fixing bugs. His conclusion : debugging is parallelizable. In fact, debugging here can include incrememtal development, with different programmers adding functionality here and there in a piecemeal fashion.

There are some important points to be noted here. This is not a paean to Free Software as traditionally conceived by Stallman's FreeSoftwareFoundation. In fact the Cathedral of the essay's title doesn't represent proprietory software companies such as Microsoft, but the Free Software Foundation's GNU project which, despite being free, is still very centrally controlled. Thus freedom is a necessary precondition for the organic growth of software that Raymond advocates, but a further necessity is that those who take responsibility for the project (such as LinusTorvalds with Linux) must maximize their openness to communication with would-be contributers. (And, incidently to maximize the feedback they give to encourage the volunteers.)

For Raymond, free or "open source" software is not just a moral crusade, or even the best way to develop software. The success of open source stands as corroboration of a more general libertarian / anarchist assertion that large enough numbers of individuals can self-organize themselves to achieve great feats. The internet, and the communication this offers, are essential to allowing this large number of people to co-ordinate without central authority - through the use of bulletin boards, archives of software, email etc. Thus open source is a model for other voluntry, collaborative projects. And its success is a vindication of grass-roots organization.

Here I hope the economic implications of Raymond become clear. One conclusion might appeal to a traditional free-market liberal : that decentralized outperforms centralized. But the other is a serious challange to a shiboleth of intellectual property. This software development only works because it rejects software being treated as property. Maximizing openness requires that everyone is free to copy, modify and redistribute it.

In the second of the essays, which is less well known, Raymond tackles the issue of motivation. Before Raymond, programmers of free software, who renounced traditional intellectual property rights and didn't make money from selling software, were presumed to be motivated by altruism, or ideology.

Raymond, who is also a keen amateur anthropologist of hacker culture, re-interprets the motivations of programmers. He sees them as extremely motivated by self-interest. In an environment where their main resource is in abundance rather than scarcity, hacker culture has evolved a gift economy rather than the typical exchange economy that governs scarce, private goods. Writing code and giving it away is a form of competitive potlatch where programmers compete to give the most valuable gift to the world. The greater the gift, the more respect is earned from the rest of the community.

But what is the resource which is in abundance? Not lines of code, but original ideas instantiated in code. It is these instantiated ideas that make up the noosphere of the essay's title. Gifts have greater value when they are a new program which didn't previously exist in the free software world, or a new improvement to an existing code. A "me too" copy of an existing project is less valuable. Raymond re-inforces this theory by showing how it is consistent with the ettiquette of the culture. Although code is freely exchanged and adapted, it is a crime to "steal" by passing off code written by another as your own. You can take and modify existing programs, but you will not gain or retain respect unless you pass all credit due, back to the previous authors whose work you are building on. In fact, demonstrating that you are a good sharer-out of acclaim, and respecter of others, even to the extent of over-generous praise of the predecesors, is an essential skill. You will win the trust and respect of the community and gather more volunteers to work with you on your projects if those volunteers can trust you to share the glory with them.

This is the third idea, then, from Raymond. To add to the vindication of internet enabled, decentralized efforts, and the fact that software must be free and open. Programmers are citizens of a gift economy where, what Raymond calls egoboo, that is the respect one gains for giving valuable gifts to the community, is the motivator; and credibility for fairly aportioning that accrued respect is the key virtue.

Counter Arguments

1) HackingIsASickMachoCulture

2) Demographics of contributions doesn't fit Raymond's Model

A recent paper by David Lancashire criticises Raymond's analysis and the many others which have flowed from it. He suspects it of being part of a romantic hacker mythology which aligns engineering feats with a kind of humanism. This leads to these cultural explanations being too readily accepted, and traditional economic alternatives being unduly ignored.

In order to try to untangle whether it is the cultural factors, suggested by Raymond and championed in many places in this wiki, that influence the developmemt of open source; or whether traditional economic factors are more significant; Lancashire tries to identify test cases where economic factors could be a consideration; rejecting, for example, simple, short scripts which could not be commercialized anyway. He identifies two projects : Linux and Gnome as suitable.

He then analyses the contributions made by various countries around the world by dividing number of contributers by some notion of the number of potential contributers (estimated as number connected to the internet). He finds that certain European countries are contributing far more to these projects than the US. This he takes as a falsification of a claim that open source hacking is something which is directly related to a degree of surplus wealth.

If this is so, it's a blow to the idea of a universal HackerEthic whereby all hacker types, upon experiencing a feeling of surplus begin to switch to "GiftEconomy" mode. Instead, he shows that contributions from hackers is less in the US than Europe, and posits that this is precisely due to the dynamism and growth of the US economy. The hackers are following traditional economic principles and following the money into proprietory software. In Europe with a lower growth, the oportunity cost of open source work is less, and hence more Europeans are contributing.

In fact, the European behaviour can also be explained by more direct economic forces. Europeans who earn a reputation in open source software are likely to find better, higher paid jobs (possibly in the US). Gaining attention has some value, but only because ultimately it can be cashed in for real wealth in the proprietory software market. As the employement opportunities in Europe are lower than the US, the relative value of this is higher in Europe too. (See also NetoCracy/Exploitation)

I can't improve on the beginning paragraph of his conclusion, so I quote it here.

If this hypothesis is supported by future research, a reinterpretation of the entire history of the free software movement will be necessary. For this analysis suggests a starkly different logic to open source development than is contained in most of the popular literature on the subject. In particular, it offers support for the hypothesis that early open source work thrived because its development took place in an immature and publicly-subsidized market. While academics and researchers were no doubt driven by a desire to "scratch an itch" and perform work they found particularly stimulating, it is significant that they essentially performed labor for which there was very little immediate private-market demand. Is free software truly free? It may be something for which developed countries have already paid: through early funding for academic research and development, and support for public research at times when the market for certain types of software was immature. It is hardly accidental that early "hacker" communities emerged at organizations with the resources and will to subsidize long-term development.

This leads Lancashire to speculate that Open Source software is really an inovation due to government funding. A classic PublicGood paid for by public money; and this is the truth obscured by the hypothesis of libertarians like Raymond.

Possible counters to this

Although he pitches the argument against cultural explanations, he's really only attacking one version of the Raymond egoboo model.

  • He deliberately ignores certain projects eg. Emacs and gcc from the GNU project on the grounds that they are ideological. But what's the difference between ideology and culture?

There are some other possible factors to explain the disparity between US and Europe.

  • Education : Maybe the US has more internet connections, but does it actually have as many technically smart people?
  • Economic stress. Maybe US hackers are more driven by money as a necessity due to lack of welfare provision. Hence the true surplus is less in the US than Europe. This means that economics remains as a deeper constraint (which no-one doubts) but not as an individual motivator.

3) SoftwareQualityControl

See also :

CategoryEconomics, CategoryInformationalism