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Open Source-onomics: Examining some pseudo-economic arguments about Open Source

Linux out of the ambit of commercial interests, society has benefited handsomely.

Software, like wealth itself, is potentially limitless. Capitalism correctly views wealth as potentially infinite, and fuels global growth to increase the overall size of the economic pie. However, the current structure of the commercial software market is not capitalistic at all, but mercantile. It sees software as a limited good that needs to be hoarded and released sparingly. It is therefore incapable of being an engine of growth.

Lest our current "capitalistic" milieu should give anyone the wrong idea, it must be noted as a matter of sociological interest that commercial organizations do not have a divine right to exist. They exist at society's pleasure, because they have hitherto been the most efficient known means of producing quality goods and services at reasonable prices. However, it appears that the investment model that underlies all commercial activity is a grossly inefficient vehicle to deliver to society the levels of software that it needs.

So here's a really subversive thought: Perhaps corporations shouldn't develop software at all! Just as free market advocates call for governments to get out of the business of running industries, perhaps we should call for corporations to get out of the business of writing software. They are applying the wrong economic model to software, and it is proving too costly and inefficient for society to bear. We need a model that takes a capitalistic view of software, not a mercantile one.

What we see today with the gradual success of Open Source is, perhaps society's "invisible hand" turning over software development to the more efficient (from its viewpoint) Open Source vehicle, and gradually relegating commercial software to the fringes of economic activity. Adam Smith would have approved. (Along the way, notice that we have also shown how the cost of software can be effectively reduced to zero, thereby justifying its zero price tag.)

"Open Source may have a niche, but proprietary commercial products will continue to rule"