Is Open Source a New Economic Paradigm?

[Kenneth B Smith]

Tribalism, feudalism, colonialism, imperialism, socialism, capitalism.... Open Source? Is Open Source an evolution in economic theory?* I began to wonder about this when a client asked me "How does WordPress make money?" He was questioning why I would use free software to develop his website and how long would WordPress be around? I started to explain that WordPress has come to dominate the blogging software market. (Note to self: find blogging software market share statistics) And that led me to wondering how does Open Source fit into traditional economic theory? Many web applications are Open Source/free and thrive: Firefox, Wikipedia, Google docs to name the first that come to mind. JavaScript is pushing aside Adode Flash. (I also have an ongoing post about that.)

This post is the beginning of my Open Source inquiry. One thing about working on the web is that there is so much to read. With email, FaceBook, Twitter, RSS feeds, blog posts, etc--I now just skim. And I am sure you, dear reader, do too. I will try to keep my tangents to a minimum and just hit the broad points. Let this be a catelog of links that address the subject. A resource for me to send inquiring minds. That's the new discourse.

• I am going to begin with a PBS Newshour segment of Making Sen$e. It was this that prompted me to begin tracking Open Source. It is only one part of the PBS report which also addresses commissions and bonuses.

• Part of the report is a discussion of the boom Drive by Daniel Pink. Here is a link to a search for the book's reviews.

• I must acknowledge FREE by Chris Anderson. That got a lot of buzz about a year ago. Here is Malcolm Gladwell's New Yorker review.

• Wired magazine has an excellent report called "How the Tablet Will Change the World" by Steven Levy. It is more about a cultural change, but he does address Open Source, noting that Google has an Open Source operating system called Android while Apple is very closed and controlling with its iPad/iPhone platform.

UPDATE: 080810 Evan sent this link http://gigaom.com/2010/08/08/open-source-and-economics-how-the-hold... which adds some good history and excellant insight.

Footnotes:

* Want a philosophical refresher? See Wikipedia entry on materialism vs idealism. Historical materialism is only a one aspect.

[Steve Arlowe]

Very thought-provoking Ken. I thought: could open source be an economic theory or is it just a business model. Microeconomics is the study of the behavior of individuals given an environment of choices and restrictions; maybe it's a microeconomic theory. And individual behavior always makes me think if Ayn Rand. Could open source fit within her version of capitalism as described in "Capitalism - An Unknown Ideal"? Maybe, but I haven't time to re-read that at the moment. What I did find is that I'm of course not the first to ponder this. It's one of those "if you can conceive of it, you can google it and get results" things. Sure enough - here's a guy who thinks Ayn Rand would be a fan of Open Source: http://darkmattermatters.com/2009/07/06/what-would-ayn-rand-think-o... (Is invoking "Rand" on a Lumpen site like saying "Voldemort" at Hogwarts?). In a nutshell - individualism is at the core of what makes Open Source work ...

Regardless, I'm interested in Open Source because Crossfit claims to be an Open Source approach to fitness. Don't know if it meets all the requirements of the definition, but it seems to be very open -- all the fitness instruction, videos on how to perform exercises, even what workout to do each day - all free for the taking at the main site. And I've certainly asked the question - how does Greg Glassman (founder of Crossfit) make any money?

[Evan Blackford]

Mr Ken,

Great post, and I'm looking forward to learning more about this with you and the other Lumpen Fellows. As for Mozilla's Firefox's business model, (which is a non-profit, I believe) I seem to remember reading that they get a lot of revenue from an affiliate partnership with Google, where they default new user's homepages to a Firefox-branded Google search page. And I believe also the Google search field on the upper right is there by default, and yields a bunch of money. If I am not mistaken, this is a fairly common open source model, and one of the more successful implementations.

For our advanced open-source seminar, I suggest a bit of homework: what makes the Ogg Theora video codec open source, who paid those guys to do all that work (if anyone), and what makes h.264 not open source (who pays to use it, and how?), and what are the ramifications of Google announcing a pending "open sourcing" of the VP8 video codec? And what does all this have to do with HTML5?

Here's a handy link to help us all in our homework:
http://newteevee.com/2010/04/14/did-google-just-kill-ogg-theora/

[werner pavlovich]

I have to say it again "you're the hardest, and smartest, comrade I know" Thanks for the info ....you are " the refresher"