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An economy of long term views

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An economy of long term views

Sandra Braman

/ 7 Minuten zu lesen

Today, even in the automotive industry one finds working practices of the Open Source movement. Why? Because it has shown that on the long run, cooperation can be more successful than competition.

Sandra Braman

In one sentence: What is Open Source?

We mean things that are put out there so that once they are produced, everybody can have access to them without paying for them. It also means that anything you make is going to be available out there. We have other reasons beside money why sometimes things are not available to us.

If you take producers of Open Source Software: What drives them to do this, to give away things for free? What do they get out of it?

At least three different things. One would be trying to make things happen that will not happen unless we are collaborating, sharing information with each other.

Sometimes it is very idealistic. You just want to share the knowledge, or to share a good thing.

It's also looking at the long term instead of the short term. You may not be getting immediate payback in the short term, but in the long term, things may build for you that in fact ensure that you are able to sustain yourself on the long term. In the long run, it allows you to get a job, or to become part of an organization that sustains you in the long run.

Why should I as a consumer choose to use Open Source products if I have proprietary products working quite fine for me right now?

This leads back to why things might be better if we are actually collaborating. If we think about the software example: A company has its own interest and it sets down rules about what will get made. And the market, the users, the consumers, they find the product completely unacceptable, but there is no way of talking to the people who produced it. So we're stuck. If you get Open Source software, you have lots and lots of users who are able to translate frustrations or concerns or problems into fixes, and make it a lot better. So the first thing is: You are going to get better software. The problems are going to get solved.

Secondly, there is often a more fair distribution of the money that comes from the development of products. We just heared today a wonderful story about distributing music that made sure that the actual musicians earn money as opposed to just the record label companies. And the same thing is happening with free software and other kinds of things. When you buy open source software or other kinds of goods and services, the actual people who produce them are going to get more out of it, as opposed to just the companies and stockholders.

A third value for me as a consumer of acquiring things from open source is that I can then make things with it. When I get software from a company that is controlling it, I am stuck with the choices they give me. But when I get it from Open Source, then I can also tailor it to do the things that I want to do. And that makes me a producer as well.

The open source model is currently used for cultural goods or software only. Do you see possibilities for expanding the model to other goods and services? Where would be the limit?

Last question first: Of course we don't know the limit. Another realm that is very quickly making the transition to open source is in the world of scientific production. This is also still intangible, but we are on the verge of having a much more open access to scientific information for all people around the world. And that again will be to everyone's benefit: The more people you have thinking about difficult problems, the more likely you are to find answers to them.

In terms of objects, well: In between the world of traditional economics, thinking about the market, short term transactions and "you have to have money with everything" and the ideal of open source, as it is put in an utopian way – in between those two we have actual economic theory, that talks about what it is that makes this digital world we're living in different from the industrial economy or an agricultural economy.

There are different ways of talking about what we mean by "information economy", but the way that seems to be the most accurate reflection of the world we're living in and the most useful to people that are planning economic activities, even managers of corporations, is to think about a real change in how the economy works. It's not about more informational goods – it's that things are working differently.

In the classical economic model, the focus was always on competition. I do better only if you do worse, and we'll figure out in the short term whether I am making more money than you. In the information economy, collaboration and the coordination of our activities are actually as successful or more successful than competition in the long run.

So we are beginning to see new practices even in corporations that look very traditional, in terms of how they are willing to share, what their employees do with other organizations – it isn't always about a contract, it may simply be a collaboration –, sharing ressources, sharing knowledge. This is a problem for anti-trust law, competition law, because things that have been considered illegal under competition law must now be reconsidered. But as this trend continues, I think we'll see a lot of things that have looked very traditional – car manufacturing and so forth – take on more and more the characteristics of an open source world. How far that will go, we don't yet know.

So you would say that essential market mechanisms like the coordination of supply and demand, or organizing work efficiently do also work in a collaborative model?

That's a great way of putting the question. Yes, I think we're discovering that. What happens is you learn new ways of encouraging your employees to be efficient and new ways of coordinating the market. The coordination of production and consumption is a very good example: There's all kinds of people trolling social networks and trolling what's on the web to find out what's really of interest to people. So real human beings are actually providing input into the design of what is being manufactured much earlier in the process.

You said that there is a lot of idealism in collaboration. Can people actually make a living with Open Source? Will the system ever be self-sustainable? Will it not always depend on a classic economy or public funidng in the background?

Even in the industrial economy, we have already seen a real transition in what we think where the money has to sit in order to drive the economy. This happened in the 1930s. Until the 1930s, everyone thought that to keep the economy moving, those who were richest have to have a lot of money, and that would trickle down and do all things. In the 1930s, there was a theoretical transition that got translated into government policy and said: No, if you want the economy to work, everyone has to have money to buy things and keep themselves alive. That was a really significant change, and I think that that change is also available to us now.

We have a range of possible solutions. We already see a lot of people who have regular full time jobs working on Open Source Software. Another version are completely new economic models developing for where the ressources would come from. The new models is why I mentioned the 1930s: Maybe people who want to use something instead of waiting for it to be designed and marketed might even put in ressources earlier.

In fact, there are already models for that, artists who say: "I am thinking of making this new project, and I am going to put it out there on a kind of stock market and you can buy 40 percent of my project. This is how much money I think I will need. And then I do my project and if somebody actually buys it, then you will get your percentage back." This is a very different way of being an art collector, for instance. I think it will be a combination of both: Within traditional means of earning a living we are seeing more and more people sustaining themselves [with Open Source projects], and we will see new economic models for doing that.

Do you have an example for people collaboratively working on something for free in the beginning and later being recuperated, evenly sharing the profits?

Of course, there are also failures in this, but I think YouTube was an example. There are certainly examples out there of people doing something for free because they love it and wind up selling the organization or the website or the process or the service they developed for a mammoth amount of money. We also see slower growth as one would see in an entrepreneurial environment becoming more and more economical sustainable.

But how to bridge that time gap to the point where you sell what you made for free?

I'm not a neo-classical micro-economist, but to put myself into their shoes, they would say: Every entrepreneur takes a risk. In a very classic economical model, the entrepreneur puts himself out there, puts himself at risk and says: I'm going not to take vacations for a couple of years to get my new business going. And I think that it's really legitimate to say: If it's fair to expect that in a market economy, than it's fair in an open source economy as well.

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Sandra Braman is Professor of Communication at the University of Wisconsin-Milwaukee. She has been studying the social effects of the new information technologies and their political implications since the mid-1980s. Her latest book "Change of State. Information, Policy, and Power" was published by MIT Press in 2006.