Re: economic efficiency of free software

Stephen J. Turnbull wrote:
> However, we can say that the price policy of proprietary software
> _distribution_ (not "development") gives us numbers with well-
> understood biases, biases that can be estimated---and that gives us a
> handle on the value lost to monopoly.  (Try Googling for "Harberger
> triangle".)  This is not true for free software AFAICT.  This is a
> _big_ problem for policy evaluation of regulatory treatment of OSS
> (including copyright and software patent policy).

Agreed, the price policy does give us some information.

>     Jamie> Also, one of the problems with any proprietary product (not
>     Jamie> just software) is that some "demanders" are refused access
>     Jamie> to the product simply because the economic process requires
>     Jamie> that refusal, not because there is any real cost to the
>     Jamie> business in those demanders having the product.
> 
> You've apparently missed Thomas Jefferson's point, too.  Refusing
> access to those who don't pay is not a _problem_ resulting in
> undersupply, it is a _proposed compromise solution_ to undersupply.

Yeah but you missed my point: it doesn't work, and the quality-of-life
cost is too high :)

> Another way to grasp the magnitude of the computational issue is to
> recall that 50% of the non-material costs in the US economy go to
> "knowledge workers" who are not directly related to physical
> production of goods or consumer services, but rather to instructing
> the rest of the economy about what goods to produce and where to
> deliver them.
> 
> Ie, the US economy is a distributed computer whose running costs are
> about $5 trillion/year.

You don't know the true cost of it.  Perhaps it's running cost is $5
million/year, plus an extra $5 trillion/year is wasted on peoples'
need to justify their needs, which is a consequence of the economic
process.

You can start with the premise that there is a computational economic
problem, and proceed to estimate it's cost, in which case you have no
idea what its cost is, because you have no idea how many people are
toiling away at work created for the sake of work.

What proportion of those knowledge workers, or the work they do, do
you think are necessary to handle the computational issue which you're
referring to?

How many of them are doing work for the sole purpose of "doing work",
because the economic process requires people to work in order to get
their basic needs met, even when the work is not required for those
needs to be met?

Now I'm not saying that lots of people toiling away is a bad thing.

But it is hugely wasteful, in human terms, which you might call
"social cost", to follow economic indicators which strongly motivate
people to toil at things that are don't need to be done, when people
would rather do something else if they were able.

A small amount of work for the sake of work is acceptable, probably
unavoidable.  The danger is in having vast numbers of people working
because they believe they have to, and in so doing perpetuating the
need for other people to do the same.

A clear example in our field is all the effort spent creating patents
by companies for the sole reason of defending against the other
companies' patents.

> [2]  See Richard Stallman's essay "Misinterpreting Copyright---A
> Series of Errors" in _Free Software, Free Society_.  (I suppose it's
> available on the web somewhere, but I prefer to buy the book and pay
> royalties to rms. ;-)  I believe rms is wrong when he argues that in
> software there are other reasons why "enough" of the "right kinds" of
> software will be produced without proprietary modes of distribution,
> but his Constitutional scholarship is accurate.

Can you describe any kind of software, that is in some way useful,
that would not be produced without proprietary modes of distribution,
assuming _some_ kind of sponsorship whether from individuals or
organisations, and the appropriate sponsorship criteria?

-- Jamie