Re: Open Source vs. Commercial

Eyal <ez_bikbon@xxxxxxxxxxxxxxxxxxx> wrote in message
<42a18540@xxxxxxxxxxxxxxxxxxxxxx>
> Captain Jake wrote:
>
> > I suspect it is less likely that an open source effort will produce
> > quality software than a commercial effort.
>
> I suspect you can't base your suspicions on any hard facts, because the
> necessary facts are extremely hard to collect.

If it was based merely on hard facts I wouldn't be calling it a suspicion.

> TurboPower (the company) was shut down by its owners. By the way, not
> because of fierce competition from Open Source, but becasue the parent
> company is more interested in gambling software or something like that.

Actually, they were losing money, so they *were* done in by competition. That
competition took several forms, some of which were FOSS. I know that JVCL
sure had them licked when it came to Orpheus, and Indy had them licked when
it came to their internet component suite, and (then-free) VCLZip had them
licked when it came to Abbrevia.

> > To the extent that programmers are working toward making open source
> > software timely and excellent, they are undermining professional
> > programmers' career possibilities, especially their ability to escape
> > the 9-5 rat-race and make a living selling their own software.
>
> Hmm... what about all those professional programmers who get paid rather
> nicely in order to produce Open Source software?

There are very few of them, and they are greatly outnumbered by the
professional programmers who get paid to write commercial and in-house
software.

>
>
> > It is not quite that simple. You are not differentiating between the
> > labor market and the final market. A software developer wanting to
> > enter the market for software has a significant barrier if there is
> > good software available for free in that market. The only way he can
> > benefit from that market is to enter the labor market for that
> > market.
>
> There's a significant barrier also when there is good Commercial
> software available. It doens't really matter who paid to develop the
> exiting software - if it's good it will make it harder to enter the market.

But that doesn't address the fact that free software greatly undermines the
market for non-free software. You seem to enjoy dodging the real issue here.

> So people discovered that producing software isn't all that difficult as
> it once was. Today's kids can develop software, sometimes good software,
> although we older programmers struggled for many years to acquire the
> knowledge and decent tools to do our job. So what?

LOL. Judging from the quality of software I've seen lately I think you must
be smoking something illegal to have come up with the conclusion that
producing software is not all that difficult anymore. I know that in the
fields with which I've become familiar that quality software is exceedingly
rare. (Just try to find a good, solid, reliable piece of software to handle
trading of commodities, futures and currencies, for example. Billions and
billions of dollars are on the line and yet all the publicly available
software is crap.)

>
>
> >> If they don't get paid, they only make software that interests them
> >> (and some argue that is of low quality). So who makes the
> >> "uninteresting" software for businesses? People who write software
> >> for money, so again there's a market and the argument is void.
> >
> >
> > The argument is far from void. You in fact just argued that FOSS will
> > lead to software development careers that involve only the creation
> > of uninteresting software.
>
> Uninteresting to *hobbyists*. I develop accounting/financial software
> and I enjoy it very much, although I doubt such kind of software is the
> first priority for a hobbyists who wants to write code.

Well, make up your mind. Is FOSS created by mere "hobbyists" or by
professional programmers?

>
>
> >> "big iron". The development cost a lot of money, which made the
> >> deal very expensive for the customers. Naturally with a proprietary
> >> and expensive environment there wasn't much of a market around
> >> IBM's environment (or any of the other proprietary systems). In the
> >> end the whole setup became too expensive and uncompetitive.
> >
> > IBM uncompetitive when it developed its own operating systems? Do you
> > have any idea how silly that sounds to anyone that was around during
> > that time?
>
> Read again:
>
> *IN THE END* the whole setup became too expensive and uncompetetive.

"there wasn't much of a market around IBM's environment" was the statement I
found laughable. Your "in the end" qualifier was not in that sentence.

> > That is not the issue here. The issue is whether or not FOSS has
> > resulted in a larger wage fund for software developers, not just
> > whether it has helped a large multinational firm increase it's
> > profits.
>
> And helped the many users of IBM computers get access to a huge base of
> applications. Let's not forget the bottom line.

Again you resort to quietly changing the context from the welfare of
programmers to the welfare of society in general. The claim being debated is
whether or not FOSS undermines programmers' careers and salaries, not whether
or not society as a whole is better off.

>
>
> If it has cut IBM's labor costs then it has reduced the
> > amount of money going into the pockets of software developers, pure
> > and simple. Here is a direct example of how FOSS is undercutting
> > software developers even in cases where firms are paying software
> > developers to create it.
>
> Not at all!
>
> Suppose all those volunteers (who produced a great free product), were
> like - professional paid programmers. Would that make any difference?
> No, because they increased the supply of programming labor, and drive
> the wages down anyway.

"Increased the supply of programming labor"? You are apparently assuming that
professional programmers paid to produce free software would not have done
any professional programming otherwise. That's an assumption that is of
dubious merit, to say the least.

The effects of a policy or activity on the welfare of software developers can
be determined by seeing how it affects the total wage fund that goes to
software developers. If the labor costs were reduced, then this wage fund was
reduced, and software developers faced a correspondingly reduced demand for
their services. That reduced their welfare.

>
>
> >> The most widely used (but unfortunately so) example is that
> >> software can be given free and money comes from support.
> >
> > Great, this turns software developers into pure cost centers, and
> > makes the support personnel the economic stars of the firm. Again,
> > abysmal for software development careers.
>
> Again wrong, because with bad software the cost of support sky-rockets,
> so programmers are still an important piece in the puzzle.

You're apparently getting desperate, since you have now implied that free
software will be bad software.

>
>
> > "reduce cost" is synonymous with "less money paid to workers". Again,
> > these schemes are thereby hurting software developers in general.
>
> The cost is shared with others, the cost doesn't disappear.

Yet AGAIN you have pretended that software developers are unhurt because
society as a whole is not hurt. Why do you keep repeating this same logical
fallacy over and over again?

>
>
> >> The money simply won't be spent on that Commercial
> >> software, but on something else. Whatever that something else
> >> happens to be - food, clothing, entertainment, hardware - doesn't
> >
> > That is a loss to society, equal to the difference in productivity
> > between software development and the next best alternative for those
> > individuals best suited to software development.
>
> You assume that most programmers do programming because this is the
> thing they do best.

Best? No. I'm talking about comparative advantage caused by accumulated
experience. Right now, I really don't have the time or patience to teach you
why absolute advantage is not the basis for the gains from voluntary
exchange, nor to teach you how specialization causes comparative advantage.
Open any basic economics text.

> Maybe most programmers would be better off, for their own sake or for
> society's sake, growing vegetables or fixing cars? There's no way to
> prove one way or the other.

LOL. There sure as hell is. The fact that they voluntarily chose to do
programming instead of growing vegetables or fixing cars proves that they
think they are better off programming. To disagree with that is to pretend to
know their preferences and values better than they do.


> >> And won't you be really happy to get free gas or free groceries?
> >
> > No, because I know that the prices of other things will be higher as
>
> When you can get something you want, for free or for a price lower than
> normal, do you actually refuse the deal? Or you just say so for the sake
> of this discussion? I suspect the latter.

Once again you have committed the fallacy of composition. I can accept the
reality of a zero price and obtain free this or that without being happy when
I contemplate my entire standard of living. I know, from my training, that my
standard of living will not have been increased, because all the money that
would have been spent by consumers of gas or groceries will then simply be
channeled into purchases of other goods and services and drive their prices
up just enough to offset the gain from free gas or groceries. The general
price level relative to my wages is what determines my standard of living,
and that is not changed by changes in relative prices nor by the price of any
good considered in isolation. It is changed by changes in the monetary base
and changes in the amount of goods and services available.

>
>
> >> Suppose air isn't free, so each and every person has to pay for the
> >> air they breath. This will create a huge market for air, won't it?
> >> How wonderful! we created a huge market with lots of money flowing
> >> around, and everyone must be happy because of all this new
> >> business. Really? Where all the money will come from? That money
> >> will be taken from other markets - food, clothing, entertainment,
> >> hardware and... software!
> >
> > You seem to be fixated on the constancy of the money supply as if it
>
> Not money supply but money *flow*. I think I've made it very clear in
> the original message that I'm talking about the flow of money, not the
> quantity of money.

The money supply is the flow of money. The velocity of money is a relative
constant, being determined mostly by institutional factors that are unchanged
by anything under discussion here.


> Great. So when the cost of software goes down because some people do it
> just for fun, it's reflected in the price of software. Resources are
> still allocated very efficiently, and the society as a whole benefits
> despite the facts that some programmers now need to find another job.

Nope. Whenever a good is priced below cost society suffers, because that good
is then under-produced, resulting in a less efficient allocation of resources.

>
>
> > We express our relative preferences every time we buy or
> > decide not to buy something. Via a non-zero price, our value system
> > gets a say in the allocation of resources. This mechanism is
> > completely gutted by a zero price, and a lot of valuable allocation
> > information gets lost as a result. This leads to an undersupply and
> > over-demand for the zero-priced good. Society is worse off because of
> > the resulting misallocation.
>
>
> Suppose someone finds a way to make diamonds by placing a piece of
> charcoal in the microwave oven for a few minutes. Will this hurt the
> economy? Will this make society less efficient? Of course not.

But that is not a good analogy. FOSS developers are not better at what they
are doing than commercial developers, so there is no gain to society from
FOSS the way there would be if a better and more efficient way of producing
diamonds were discovered.

> Similarly, we're now discovring new mines of programming code, at zero
> or almost zero cost (I don't really agree with this, as many Open Source
> projects are maintianed by paid programmers - but let's assume all FOSS
> programmers are volunteers).

You are confusing monetary prices with economic costs. FOSS is not free in
the economic sense, just the accounting sense. The resources that are devoted
to FOSS are then not available for other things and this then represents a
very real economic cost. "Free" software is not free at all.


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