Research on Free Software Economics

[Seth Johnson <seth.johnson@RealMeasures.dyndns.org>]

-------- Original Message --------
Date: Thu, 31 Jan 2002 02:14:15 -0500
From: Seth Johnson <seth.johnson@RealMeasures.dyndns.org>
To: C-FIT_Community@RealMeasures.dyndns.org


(Forwarded from Canarie News list, CAnet-3-NEWS@canarie.ca)

-------- Original Message --------
Date: Wed, 30 Jan 2002 13:37:11 -0500 (EST)
From: CAnet-3-NEWS@canarie.ca

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[Here is another excellent paper on the fundamental
economics and organizational theory of open source
software.  Based on Coase'e paradigm, the advent of
communication networks like the Internet may be
fundamentally reshaping the forces that determine the size
of the commercial organization as we know it today. While
many lament that the Internet as a "telecommunications
technology" has failed to provide sufficient rate of returns
to traditional telecommunication suppliers its secondary and
tertiary impact in terms of reshaping the corporate
organization could be significant. Some excerpts follow. 
Thanks to Tim Denton for this pointer - BSA]

http://www.law.duke.edu/pd/papers/Coase's_Penguin.pdf


The emergence of free software, and the phenomenal success
of its flagships—the GNU/Linux operating system, the Apache
web server, Perl, sendmail, BIND—and many others,2 should
force us to take a second look at the dominant paradigm we
hold about productivity.  That paradigm is that production
is organized in only one of two forms -- market-based
exchanges or firm-based hierarchies.  Both these traditional
forms of production depend on clear property rights to
control resources and outputs.  This has led information
policy in the past decade to focus on strengthening property
rights and facilitating contractual exchange -- the building
blocks of an information economy built on the same model as
the economy of coal and steel.

While there are many other critiques of the idea that strong
property is appropriate for information and cultural
production, the success of open source software offers an
additional set of considerations regarding this trend.  This
success suggests that in the information economy, the
economy that is increasingly occupying center stage in the
developed economies, property-based markets and
hierarchically managed firms are no longer the only games in
town. Indeed, they might not be the best option. And the
presence of a potentially important mode of production that
is harmed, not helped, by property rights should give us
more reasons to pause on the way to ever-stronger rights. 
But my purpose in this paper is not normative, but
positive.  I am trying to outline the parameters of the
phenomenon to be studied, and to suggest an initial
framework for thinking about it. More detailed descriptions,
and normative conclusions, I leave for future work.

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Bill St. Arnaud
Senior Director Network Projects
CANARIE Inc
www.canarie.ca/~bstarn