RE: [ox-en] Threads "The Fading Altruism of Open Source" on <nettime>
- From: "Kermit Snelson" <ksnelson subjectivity.com>
- Date: Mon, 14 Jan 2002 22:30:40 -0800
I believe that terms like "altruism" and "opportunity cost" don't provide
much insight into why people develop open source or free software.
Lancashire, who bases his analysis on such ideas, overlooks the fact that
computer programming is not only an occupation but also a hobby and sport,
particularly for those who are good at it. The obvious fact that people
will do it without being paid no more "poses a serious challenge to
traditional political economy" than does bird-watching or basketball.
So the interesting economic question about open source development isn't why
some people do it for free. Instead, I propose that we consider instead
what kind of contractual instruments, other than those that impose legal
monopolies, are capable of creating sustainable economies. Recasting the
discussion in these terms can also make it clearer why the "open money"
issue is related to the "open source" and "free software" discussions.
After all, both currency and software license agreements are contractual
instruments, and the issue before us is whether such instruments can enable
a sustainable economy without resorting to the restrictive monopolies of
central banking and copyright, respectively.
I'll start out by stating my own understanding of how an "open money" system
would work and how it compares with the "open source" paradigm. As will
quickly become obvious, I'm very ignorant on the first subject (and only a
little less ignorant on the second) and hope that my inevitable errors will
lure Keith Hart and Felix Stalder, our experts, into the discussion to
correct me. :)
When you sell something in exchange for (say) a USD100 currency note, you
have given up ownership of a real asset in exchange for a claim against the
Federal Reserve. In other words, you have essentially "loaned" money to the
US government. That USD100 note is carried on the Federal Reserve's balance
sheet as a liability, usually collateralized by the equivalent amount in US
government securities. To maintain the market value of the note you hold,
the Federal Reserve must limit the amount of such liabilities with respect
to the underlying performance of the US economy. It does this by buying and
selling US government securities on the open market, changing the interest
rate it charges to its member banks, and varying the reserve requirements
that it imposes on them.
In contrast, there is no central bank in an "open money" system. When you
sell something in exchange for 100 "dollars" on such a system, you
essentially grant an interest-free loan to the community of LETS users in
general. There is no limit placed on any single user's indebtedness; each
member acts as her own Federal Reserve Board, deciding for herself the
liability she feels she may responsibly incur to the LETS community based on
her own ability to sell items back to it.
Naturally, there are many possible problems with such a system. What
happens, for instance, if people establish accounts on a LETS system, "buy"
expensive items, and then leave without ever having sold anything
themselves? Essentially, they've stolen from the community. If too many
people do this, the system will collapse. Or what if everybody on the
system is selling aromatherapy and no one is selling legal services? If
there is a unbalanced distribution of products or services on offer, the
system won't work. As with any central bank currency, the health of an
"open" currency depends entirely on the economy and behavior of the
community that adopts it.
A similar situation applies to free software. If the GPL instrument is to
serve as the basis of something more than a hobby economy, it must provide a
way to compensate those who can't afford to give their time away. The
compensation theory of the GPL seems to be (according to the FSF web site)
that it forces software to be paid for in software. In other words, if A
writes a program that uses B's GPLed code, then B gets to use A's program as
compensation. This assumes, of course, that A has no workable, non-GPL
alternative to B's code, and that A's program is equally valuable to B. In
other words, the abilities and needs of the community have to be balanced in
a rather exquisite way if the community is to be self-sustaining.
Therefore, it seems to me that asking whether "open source" and "open money"
contractual instruments can support a viable economy simply restates two
very old political questions. Namely, is this exquisite balance achievable
simply by letting human beings do exactly as they please, or is the thumb of
coercion (e.g., copyright and central banking) required on the scale? And
if the latter, whose thumb? And who will control it?
Kermit Snelson
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