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Value of software (was: Re: [ox-en] New pages in the introduction)

Hi Graham and all,

it's hard for me to follow, nevertheless, I try...

On Monday 13 May 2002 22:07, Graham Seaman wrote:
Commercial software is not a commodity, and has no value. It has no
value in the sense that it has no price (you cannot buy software,
and eg. Microsoft's EULAs always say 'you have not bought this

The argument sounds like "you cannot own software", and I think this
is a correct statement. Nevertheless, I cannot agree with the

It has negligeable value in the classical and Marxist economist's
sense of labour value, since the costs of creating the original are
a fixed cost, like the design of physical objects, and the labour
involved in reproduction of software is almost (not quite) zero. It
has no value in the neoclassical sense that the marginal cost is
zero in the limit. However you look at it, it has no value. So, it
is also not a commodity, at least not in the Marxist sense in which
it's used on the 'blotter' page, any more than free software is.

IIRC "commodity" is defined as follows:
- a good which is made by independent _private_ producers
- the good has only a value if it is _exchanged_: no exchange, no
value This means:
- the value of the good appears as exchange value
- "value" is comparison of amount of labor of exchanged products
- not single products are compared, but a product with a "mean
product" - "value" and "commodity" are notions of societal mean

Applied to software this means that all labor necessary for
development and production is distributed on all specimen
successfully exchanged on market. It is more or less the same
situation as in "normal" products.

No, software is not exchanged - at least not with consumers. I don't
see why the situation is different from TV programs: there is a market
among TV companies for programs, and they sell them to one another. But
they do not sell them to the people who watch them.

It is not different! Well, the same situation exists for each product 
containing some "information" (knowledge, algorithms etc.). For example a 
book: You buy the book, but not the content, not the text. However, this 
is not so obvious, because you have the material book, which takes some 
more expense to get produced as software, say, on CDs. Or a TV program 
received by Setop-Box (to assume Pay-TV).

However, my argument was: sum up development and production expenses, 
divide them through the number of pieces sold, then you have the 
"value" of the mean specimen (assuming it is on the level of societal 
mean). In my view it doesn't matter how big the material part of the 
"transfered" piece is.

The only difference is: The development expense goes to 1 and
production expense to 0, while in normal products you have, say 0.5
to 0.5 or 0.7 to 0.3 - neclecting all other "expenses" (which could
very, very high: ads, lawyer etc.).

How can development expense go to 1?

Of course not. Or: only if you have infinite pieces;-)

I mean "go to" in the sense of "approach". And, as I explained before, I 
look at all pieces of a "product".

If you take a single product, then
its development cost goes to zero as soon as you look at marginal costs
(by the definition of differentiation).

I think, it leads you in a wrong direction, when you accept the bourgois 
Grenznutzentheorie (don't know english term). Don't look at marginal 
costs, look at entire costs of development and production and then relate 

I think the only way to salvage
your argument is to say that software necessarily requires continuous
upgrades, so development cost is not a constant. But my
counter-argument would be that continuous development (eg
Word->Word97->Word2000->...) is necessary only to keep people paying

No, I simply meant a single software product, say M$-bullshit 1.0 
(assuming price = value, which is not correct):
- dev-costs 9000 EUR,
- copy-costs 1 EUR per piece (incl. CD, package etc.),
- 1000 pieces sold
- sum: 10000 EUR total and 10 EUR per piece
(- say: sold for 100 EUR / piece or profit 90 EUR / piece)

IMHO it is irrelevant, that the whole software isn't "transfered" instead 
of only a copy on a CD with the license to use it. This is only due to 
the special "immaterial form" of software, that is seems to be different 
from a book.

Therefore, my counter argument is: Because "commodity", "value" etc
is a societal notion, you cannot compare a single specimen of
"software" and a single specimen of "car". In general and concerning
the question of being a commodity the situation in software is only
quantitatively different from other products.

Counter: because 'value' is a societal notion (linked with the idea
that you have to pay for things because other people work to make
them), and people are perfectly that software has no value, people have
no inhibitions about copying software, taping TV programs etc. It is
not stealing, as taking things with value would be.

The definition of theft is a societal one, too - independent of what a 
single person thinks. It's the law, that says: "It is theft"

All the same, I agree it's 'only' quantitatively different. There's
nothing magic about software itself. But the quantitative difference
between the costs of copying software, or of copying a TV program,
and of copying a chair, is so big that saying 'only' quantitative
makes the difference sound less than it is. When we have home fabbers
that difference will disappear ;-)

But you cannot look on the copy process in an isolated manner. Producing 
software is foremost development. And under conditions of a commodity 
producing society this takes an amount of labour for money if it this 
thing is produced for marketing.

BTW: It is part of the ox arguing, that the process we face in
software is only the peak of the normal ongoing process in general
(immaterial development part increases relatively).

Yes, this is what I am disagreeing with at bottom. I am saying that
the material development part decreases hugely, while the immaterial
development part is just a constant, not a variable; it always has been
a constant, and this has not changed. This has a lot of implications
for parts of the Oekonux argument, I know...

The material development part decrases?? Why? Only, if you look at 
marginal costs. But this does not make sense if we discuss about "value 
of software".

I think, this is the ongoing fight about who can use (or usurp) the
"general knowledge" (Marx). This topic is widely addressed by
Hardt/Negri in "Empire" (in their broader terms: bio politics -
adopted from Bourdieu AFAIK), however, I didn't read it yet. Anybody

Yes, it is interesting but fundamentally I didn't like it. Some parts
(maybe the parts by Negri?) are easy to read, other parts are full of
postmodernist terminology and I found them much harder - I would
recommend getting a German translation if possible! I didn't have the
feeling that it had much direct relevance to Oekonux arguments (except
as far as it has a common heritage from parts of the Grundrisse etc).

I started reading (in german) - and I heard, that it has much relevance 
for oekonux. I will see.

Did you read Jeremy Rifkin's 'Age of Access'? That's closer to my

Yes. Now I understand the "source" of your arguments. I think Rifkin 
describes some phenomena quite well, but nothing more. He's not right in 
his analysis.

If I'm right, saying 'free software is not a commodity' does not
distinguish it from commercial software, which is also 'worthless
as the air we breathe'. One possible conclusion from that is that
all software should be free, as should all formulae for medicine,
all genetic knowledge, etc. etc. (as opposed to having to create an
equivalent, special 'free' version of all the existing commodity

Well, what keep us off from saying: Human activities are "worthless
as the air we breathe"? For me setting some commodities "free" can
only be the first step. I cannot see, that anybody will be more
convinced, if you argue, that 'software is not a commodity' - by
"nature" or what is your ground? All was societal made...

My ground is also social. If something takes very little work to copy,
it is impossible to make it into a real commodity. It is possible to
pretend it is a commodity (put a CD in a big empty box), but it is
still not really a commodity, since commodities are based on work to
produce things for exchange in a market.

But that is the fact, if you don't isolate the copy process from the 
development process and if you don't look at the "marginal piece" but at 
the "mean piece".

This is a social fact, not a
natural one.  And if the core activities of society are not based on
commodities, but on a kind of rent, then this is a big problem for
capitalism as a system, which it will only be able to patch over by
more and more unpleasant laws, destroying more and more of our freedom.


Rent is compatible with capitalism, but can't be the basis for the
whole system without the system becoming something else.

I think "rent" is not a correct term.
What do you mean with "something else"?

For example, there was a recent article on Marxism and Copyleft on . The author, like you, says software (and
information in general) has increased in value. As a result he predicts
struggles over this value between commercial software houses and free
software developers, with the lack of value of free software devaluing
paid programmers work. People who don't see this ('open source'
supporters) are cast as some kind of naive or treacherous people in the
middle (I'm exaggerating, but I think this is the trend of what he
says). I think this is completely and utterly wrong.

I read it (some time ago). IMHO it is correct to describe free software as 
an "devaluing movement", because free software has no value, but 
commercial software does. The question is about the consequences...

Another difference: most medicines can be produced very cheaply (the
value of a bottle of pills is mostly very close to the value of a CD of
software), and prices are kept artifically high by IP law. Medicine
should be free (not necessarily as in beer, and not without legal
controls over manufacture and testing, but without restrictions caused
by IP law).

"Should be free" is ok, but "is free (of value)" is not simply not true.

The countries asking for the right to make their own AIDS
medicines at their true value are doing so on the same grounds as
people who say software should be free. But if you say
software/medicine have value because of an increased immaterial part,
it is harder to see such common ground.

"Having value" is independent of what I think or want. We cannot "adjust" 
our analysis only to obtain "nicer" arguments. We cannot "declare" some 
products as "value-free" by will.

An oekonux argument might be:
'They have value, so it's normal to produce them as commodities. Unless
there are groups of chemists designing new medicines without pay, there
is no non-commodity alternative to the current system'. Maybe that's
unfair to oekonux, but it sounds a logical consequence to me - oder

The oekonux argument can be (of course: there is no "oekonux argument", 
because you _are_ oekonux too:-)):

All stuff (like medicine) produced as commodities have value. If there are 
groups of chemists designing free medicine formula (without pay), than 
these formula are free of value. And if you have a "medicine GPL", this 
will kept value-free only by hindering to make the use of formula scarce. 
If any company wants to produce the medicine based on these formula, then 
they don't have the developments costs, but only the production costs. 
IMHO this will lead to cheap medicine (if production is not too 
complicated). You have the same effect as in free software: devaluing of 
the old commodity based production by value-free "general information 
parts". You won't get this effect without "GPL-formula". But it is "only" 
a side effect today. The main thing for me for tomorrow is: It can give 
us the idea, that all goods for humans can be produced value-free.


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