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The strange economics of open-source software

philipotoole.com

31–40 of 91 posts

Re: The strange economics of open-source software

#31
post #22

Earlier quoted context omitted.

Utility is a well-known concept in economics. It's strange at first to the outsider, but it's easy to understand with a little reading.

I know what utility is in economics, my problem is that you can always just say that the reason why people do X is because they are rational and X maximizes their utility. It doesn't tell you why that is their preference and why X satisfies their preference. It is not like the action or hamiltonian in physics which come with equations of motions that can be checked against experiment. Why is open source good for ever…

I think feelings of fun and agency are core human needs, and engineers sometimes take debts in those things during the day to earn money and open source software is a way to pay that back to themselves.

My recent open source work is partly a response to a frustratingly anti-refactoring employer. The money was worth it, but I needed to recharge my "you can actually make progress as a good pace on a project that is well maintained" batteries after work.

Re: The strange economics of open-source software

#32
post #5

I don't find it strange at all, and looking at a proper classical economist - they would have no trouble explaining it. Most people, when understanding economics tend to make the jump directly to money/cash when explaining prices and market action. But to be correct you have to look at utility. There's little question as to why companies install open source software - the TCO can be lower. But why do people contribut…

Another part of it is how technology and networking has made contributing to OSS so low-friction that even if there was no possibility of a perceivable return on investment, there's also little cost to the participants as well.

I did much less development than I did before Github came along...so I don't know if Github (which of course itself depended on the existence of other OSS and infrastructure advancements) is a cause, rather than just a correlation with my career trajectory. But I can't imagine having the same willingness to work on OSS if the status quo were SourceForge (even before its current bloatware incarnation) or even Google Code, which was a pretty good service.

It's not that free software back then was less free than it is on Github. It's just that the barriers for dilettante developers to take that first step into OSS are lowered in very important ways. Without knowing anything about a library other than the part of its API that I use, I can make what I consider to be useful addition to the library and have immediate and reasonable confidence, given a decent test suite, that I didn't break the countless other moving parts in a library. Sure, test suites have existed just fine long before Github, but at least I can _see_ that a library has a test suite before even downloading it.

My involvement with OSS could be done there, but I'm literally a short commit message and a couple of button-clicks from giving my work to the library's maintainer as a pull request. If it were any harder than that, I know I would put that pull request in my nice-to-do-someday pile of things and then completely forget about it.

On the mainatiner's side, not only does Github provide a pretty nice notification system and workflow for them to organize, browse, and comment on incoming pull requests...but the way continuous integration services have decided to hook into Github means that the maintainer literally has to do nothing to have a first-pass confidence that I didn't break the library in all the ways anticipated by the test suite. This obviously does not ensure that the feature addition is not-shit, or even completely safe...but the maintainer has more time and energy to evaluate those important questions.

And then on top of it, if the maintainer accepts the pull request -- within a span of minutes if not seconds, anyone in the world who then downloads the library or updates their copy has what I added to the library, without me having to do a single thing beyond submitting the pull request. Even besides the hope that rising tides lifts all ships...the instant gratification from the OSS process alone could be enough for otherwise disinterested developers.

Re: The strange economics of open-source software

#33

Earlier quoted context omitted.

Those are good examples. I'm not sure what the actual split is. Don't forget, though, where the real majority of innovation is: academic (mainly) and corporate labs. I went into detail a little while ago: https://news.ycombinator.com/item?id=10269245

I think you're right for computer related stuff, like networking, databases, operating systems, etc. And it may even be technically true for the examples I mentioned. But in those areas, for all practical purposes, research from academic and corporate research doesn't actually get used until it's implemented in closed source software. At the annual Siggraph conference a good portion of the papers come from companies…

That's the exact problem I'm talking about. Yet, there's so much great stuff that they make! Stuff I'd love to be using right now in something else I have. Gotta figure out how to solve this problem. It's why I keep thinking of creating a new resource that's an alternative to IEEE/ACM w/out their expensive paywall, links to Wiki's on the subject, and good search functionality. Get enough in there on key topics and on sites like HN might get it going.

Re: The strange economics of open-source software

#34
post #5

I don't find it strange at all, and looking at a proper classical economist - they would have no trouble explaining it. Most people, when understanding economics tend to make the jump directly to money/cash when explaining prices and market action. But to be correct you have to look at utility. There's little question as to why companies install open source software - the TCO can be lower. But why do people contribut…

Its been my experience that there's a second part to the TCO argument that answers the question of why companies allow their employees, on company time, to work on and contribute OSS.

Essentially, open source provides a mechanism to share the cost of the long-term maintenance of a project. By contributing back, you can leverage the resources of the community to ensure that your new features continue to work against new and improved versions of the software, without requiring future resources to re-implement and update any changes made.

Re: The strange economics of open-source software

#37
post #22

Earlier quoted context omitted.

Calling it utility doesn't seem to actually explain what it is.

Utility is a well-known concept in economics. It's strange at first to the outsider, but it's easy to understand with a little reading.

>Utility is a well-known concept in economics.

It's well known but it still has a circular definition. Why do people spend $X on goods? Because it provides $X worth of utility. Why does it provide $X worth of utility? Because they spent $X on it.

Ultimately it therefore ends up being rather meaningless. It's also non-disprovable which makes it non-scientific.

Re: The strange economics of open-source software

#38
post #22

Earlier quoted context omitted.

Utility is a well-known concept in economics. It's strange at first to the outsider, but it's easy to understand with a little reading.

I know what utility is in economics, my problem is that you can always just say that the reason why people do X is because they are rational and X maximizes their utility. It doesn't tell you why that is their preference and why X satisfies their preference. It is not like the action or hamiltonian in physics which come with equations of motions that can be checked against experiment. Why is open source good for ever…

I think of utility as the first principle of economics. Is your criticism that it can be used to explain a person chooses to overdose on heroin as much as why someone donates their time to charity? But couldn't the same be said of biology, and how natural selection explains both intraspecies predation and altruism? I mean, it can sound like a circular argument, but on the other hand if it happens there was something that made it possible to happen, too.

I don't at all agree that classical economics as a specific school is particularly focused on utility compared to others. Wouldn't that be a little like saying high school algebra is closer to set theory than say abstract algebra?

To establish a correspondence between utility and the real world, I think it is worthwhile to acknowledge that an understanding of what predated currency has shifted away from barter economies and toward economies that traded influence and status. Or, similarly, take a look at this story from a few weeks ago[1], where the consistent theme to me seems that people's behavior occurs within a context, and that anthropology might be as good a way to explain things as a highly simplified reward and punishment framework. That is, utility is maximized by acting consistent with your perceived identity as much as through projections of rewards from various choices.

So, while I don't think the concept of utility by itself says that status and identity play the primary role, I also don't think it is implausible.

And yet, you're right that open source isn't just hobbyists, and I doubt contributions from corporations contribute to prestige in any way that is valuable, so as you said:

>My guess is that open source software reduces the transaction costs of acquiring and fixing software for corporations [...] It should be a tragedy of the commons, but it isn't.

— leaving us with a poorly understood phenomenon. Is this just a moment in time specific to the age of a current generation of programmers, that won't last, or is there a dynamic that is more sustainable?

[1] https://news.ycombinator.com/item?id=10057285

Re: The strange economics of open-source software

#39

Earlier quoted context omitted.

I think you're right for computer related stuff, like networking, databases, operating systems, etc. And it may even be technically true for the examples I mentioned. But in those areas, for all practical purposes, research from academic and corporate research doesn't actually get used until it's implemented in closed source software. At the annual Siggraph conference a good portion of the papers come from companies…

That's the exact problem I'm talking about. Yet, there's so much great stuff that they make! Stuff I'd love to be using right now in something else I have. Gotta figure out how to solve this problem. It's why I keep thinking of creating a new resource that's an alternative to IEEE/ACM w/out their expensive paywall, links to Wiki's on the subject, and good search functionality. Get enough in there on key topics and on…

I didn't mean to imply that the problem was an expensive paywall.

Using graphics as an example again, imagine a research paper explaining a new rendering algorithm that can render in half the time of the next best algorithm. As great as it may be, it's not very useful without the rest of the software infrastructure that comes along with a production rendering system, like Renderman, 3Delight, or Maya. So even if the academic researchers release an implementation as open source, it's unlikely to be used in production until it's incorporated into one of the big closed source systems.

I suppose pay walls could be a contributing factor, but in a lot of areas the open source solutions are so far behind the closed source systems that inaccessible bleeding edge research isn't biggest problem.

Re: The strange economics of open-source software

#40

I know that this will annoy some people, and believe me, I mean this with a very small 'c', however I think that the open source movement is far and away the most successful communist experiment in history.

Or a natural reaction to an overshoot of capitalist excess (trying to create scarcity out of a thing that fundamentally isn't scarce in order to profit).
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