There has been a flurry of criticism for the internet for, er, internet critic Andrew Keen’s essay “Economy to Give Open-Source a Good Thumping“.  Mr Keen predicts (with no little relish) that an economic downturn will see people reassessing the value of their labour, which will in turn lead to an end to what we might term the shared information economy.  He goes to suggest that this economy of sharing will be recorded as

a “mania,” these mid-21st-century historians will explain, like the Dutch Tulip mania of the 1630s

In fact, contemporary thinking is that the “Dutch Tulip Mania”, if such an event transpired at all, was wildly exaggerated: the principle record is a single source, published in Scotland over 200 years after the alleged mania.  But we digress.  Mr Keen’s point appears to be that open source consists of people irrationally “giving away” the fruits of their labour.

There are three points that Mr Keen lacks in his understanding of open source:

1. Utility (the dismal science’s placeholder for that which is desired) can take forms other than money (otherwise we would all work 24 hours a day);
2. Not all open source code is written “for free”;
3. In the software market the cost of unit production is close to zero, and network externalities are extremely powerful in determining the value of software goods and services.

Against this backdrop, we might consider that an economic downturn will be a good thing for open source software.  While Mr Keen evidently sees the rise of open source as a sign of decadence, in fact the emergence of the commercial open source sector coincided with the so-called dotcom bust.  Open source software tends to represent a rationalised method of production, which can reduce the frictional cost of the proprietary software model, which contains a large rump of undifferentiated and duplicative software.

What is more, software is (or can be) an industrial good.  Low-cost software means that economic activity can be stimulated with substantially less investment than in the proprietary model: just what the credit-crunch ordered.

All well and good.  But some of the refutations of Mr Keen are equally wide of the mark.  In particular, CNet’s Matt Asay (a chap never short of an opinion), who responded that open source is

a free market, capitalist phenomenon that depends upon M-O-N-E-Y.

I know others share this view, indeed, I’ve had this very discussion with no less an authority than Ian Murdock.  There is some merit in Mr Asay’s position: open source clearly is a method of market disruption in a competitive (or indeed, uncompetitive) software market.  It has the potential to decrease the value of the market and then to capture a large share of that market quickly; it can also greatly reduce the barriers to entry for suppliers and to exit for consumers.

Open source is hardly inherently anti-capitalist then.  If anything, open source frequently reflects the sharp end of the market, where competition is intensified and profit margins shrink.

So what is the problem with Mr Asay’s piece?  It is two-fold.  For one, Software development and political economy are orthogonal concepts.  For example, if we consider how software development might look in a command economy, some form of a shared codebase under a copyright license from the code owner would seem likely.  Indeed, many of the world’s most leftist governments have policies specifically designed to foster open source developement and consumption.

But lastly, we return to the point that utility is not in all cases pecuniary.  Not all free software is a loss-leader.  Many people derive great satisfaction from others using their software, from others reading their translated documents, from others benefiting from their help, indeed, from changing the world.  It is hard to put a price on such an experience.