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Linux, pricing and progress

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h2sammo posted on Thu, Jun 25 2009 3:58 PM

this is a thread i have started in the gentoo, forum (a very nice linux distribution).  i thought it would be very interesting to cross it into here...feel free to post in both places.  i bet this is going to be very interesting.

link here

"I have become a Linux fan for about 4 months and i cant have enough of it. A chemist by trade, it is often difficult for me to grasp, apply and implement the universe of linux (but i love it too much to go back to windows). My other hobby (beside computing) is economics (austrian economics to be more precise:www.mises.org) and i have been having quite some linux related thoughts and questions which i feel the need to share here with you. 


i recognize linux as being more versatile, and given above average training even more productive than the "elephants in the room" (windows or apple's os). this is no doubt due to the brilliance and innovation of the people working on creating it. it has however major drawbacks when it comes to user friendliness and compatibility, etc. while i recognize current IP laws, regulations and limitations as a major stagnation force, hindering progress in general and especially in the universe of computing, i see linux being "free" as similarly detrimental. 

how can the developers know the wishes of potential consumers and plan their development accordingly if there is no price/loss/profit indicator? prices (and the effect of loss and profit) are very important tools in doing any sort of economic calculation. they relay the wishes of the consumer to the entrepreneur who is trying to make profit by satisfying those wishes. this is the same idea behind the inefficiency of a centralized govt run economy and a free capitalist market. the former ussr and similar "top-down" initiatives in more capitalist societies are doomed to fail because they distort (or completely shut down) markets, pricing indicators and hence promote malinvestment of scarce resources. 

to put it more bluntly, how would the linux developers know whether they should spend more time on rendering kernel 2.6.29 compatible with ati-drivers or whether they should work on releasing kernel 2.6.30. while i am convinced there are good arguments on both sides, without a feedback mechanism from the people all this stuff is created for (the consumer) in the form of pricing/profits/losses, any sort of decision about any course of action is completely arbitrary. 

ps: about IP laws - i don't subscribe to the idea of intellectual property (along with that of copyrights) because property is directly defined by a scarcity of the good being possessed. there is no scarcity of thoughts and ideas. the fact that someone had some idea first should not stop other people from having the same idea (which is impossible to enforce anyway) - and using it with (or won) their own property. 

IP laws are hindering progress. as an example, just think about the effect IP laws would have had on humans when they moved out of caves and started building dwellings. if the first one (or group) to do it would have had the means (by govt. legislation) to stop everyone else from doing it progress would have been severely restricted."

 

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h2sammo:

to put it more bluntly, how would the linux developers know whether they should spend more time on rendering kernel 2.6.29 compatible with ati-drivers or whether they should work on releasing kernel 2.6.30. while i am convinced there are good arguments on both sides, without a feedback mechanism from the people all this stuff is created for (the consumer) in the form of pricing/profits/losses, any sort of decision about any course of action is completely arbitrary. 

theres no sense in which they *Should* do any such thing.
mind you, if it so troubles you (and others?), form a syndicate and together, hire a programmer to design you a front-end for your Linux.

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring

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Hi there from a fellow Gentoo user.

h2sammo:

how can the developers know the wishes of potential consumers and plan their development accordingly if there is no price/loss/profit indicator? prices (and the effect of loss and profit) are very important tools in doing any sort of economic calculation. they relay the wishes of the consumer to the entrepreneur who is trying to make profit by satisfying those wishes. this is the same idea behind the inefficiency of a centralized govt run economy and a free capitalist market. the former ussr and similar "top-down" initiatives in more capitalist societies are doomed to fail because they distort (or completely shut down) markets, pricing indicators and hence promote malinvestment of scarce resources.

Open source business does have such indicators. They offer paid support and thus are required to solve issues with the software. While the codebase is free, providing a fix and integrating it with mainline not only satisfies the customer, but also shifts some work (i.e. maintaining that fix) to the community at large.

On the other hand, you can't compare open source stuff with government. Government isn't a free association of individuals, it's based on coercion and claims it can satisfy people's wishes. It's true that no private company can make that claim to the fullest extent, but a free economy provides a natural selection and incentive for those that more often do. In the absence of coercion, you can't get away with bad products/services.

h2sammo:

to put it more bluntly, how would the linux developers know whether they should spend more time on rendering kernel 2.6.29 compatible with ati-drivers or whether they should work on releasing kernel 2.6.30. while i am convinced there are good arguments on both sides, without a feedback mechanism from the people all this stuff is created for (the consumer) in the form of pricing/profits/losses, any sort of decision about any course of action is completely arbitrary.

While price generally is a feedback mechanism, it does not arise as one. Price, in its most basic nature and purpose, is a resource distribution mechanism. But as you say, software is not scarce: even if you put in lots of effort in creating it, you get an (almost) infinite supply of it.

Applying this directly to what you asked... Linux developers are rather hired to do work on behalf of various companies (e.g. developing btrfs for Oracle). On other occasions, they do this for free, working on stuff they want to. If users wish a particular feature, they can associate (or go through a company) and pay a handful of developers to do it. Alternatively, a company could see an opportunity in delivering more support services by extending its user base and fund the project beforehand.

h2sammo:

i see linux being "free" as similarly detrimental.

But it is "free". There's a quasi-infinite "supply" of Linux and there's a limited demand for it. It's like saying breathing air being "free" is detrimental to its qualities. :)

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filc replied on Thu, Jun 25 2009 8:21 PM

The distro's that attempt to commercialize their product and sell support, for example like Ubuntu/Debian do quiet well.

If the linux community consolidated just a little and some of these smaller more rediculous distros finally closed up shop meanwhile re-allocating those efforts to build on an already well established distros. You could easily have an operating system that blows upcoming Windows 7 and older versions of windows out of the water.

Microsoft Windows is in a very poor state of quality at the moment. I would be more then willing to actually pay for the software if a company would just get their act together and make something compete worthy. Dis-regarding the software ability in windows the licensing agreements alone are nightmarish enough to stear people away. Ubuntu on the other hand on it's own already can compare quiet nicely to Windows. It wouldn't take much work to have a product that would put Microsoft in its place in OS distribution. They've been in a monopolistic situation for so long that the price/quality ratio is starting to reflect that. My proof? Windows Vista, need I say more.

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ama gi replied on Thu, Jun 25 2009 10:56 PM

h2sammo:
how can the developers know the wishes of potential consumers and plan their development accordingly if there is no price/loss/profit indicator? prices (and the effect of loss and profit) are very important tools in doing any sort of economic calculation.

Linux isn't a business.  It's more like a co-op.  In the open-source world, the producers are the consumers.  The producer knows exactly what the consumer needs, because he is the consumer.

"As long as there are sovereign nations possessing great power, war is inevitable."

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terrymac replied on Fri, Jun 26 2009 11:21 PM

I have been using Open Source products - which predate Linux - for quite a few years, both personally and in my line of work as a developer/systems administrator. People create open source in order to solve specific problems. They don't really need to worry about "what the market wants" or "maximal market share" - usually, they are solving a problem which personally matters to themselves, and giving the product away costs little enough that there is no need for market calculation per se. You cannot impose open source on others. If Linus Torvald's product were not good enough, compared to the competition, it would vanish from the market.

To give an example: one of the first Open Source products I used was gcc, the gnu C compiler. This product may be of little use to most end-users, but it is "under the hood" of a great many software products. The Linux Kernel is probably built using gcc. If you developed code in those days, it was usually written in C - or one of several other languages supported by gcc. Thus, it has a large customer base - and a good many of those "customers" are sufficiently motivated to improve the product, in ways which make their lives easier. Another, less well-known program is gnugo; it has a much smaller support team. Open source programs originate in the desire to make the developers' lives easier. There are now many thousands of open-source products to solve many thousands of problems. Some are supported by organizations such as Canonical ( which distributes Ubuntu ) or Redhat or MySql ( later bought by Sun, then by Oracle) Others are not. Those products which elicit widespread support thrive; those which rely on just one motivated individual may last only so long as that individual remains interested.

You may wish to google up "The Cathedral and the Bazaar" for more info on the Open Source culture, and why it works.

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Stranger replied on Fri, Jun 26 2009 11:25 PM

Linux and open-source is in fact an example of communism, where people take as much as they need and give back as much as they can. That means that the system is suited to serve the ends of its producers. There are no "consumers" in the open source model.

Due to the non-scarcity of information, the model can sustain itself. It is doubtful that it will be the source of innovation, although it is good at reproducing existing systems.

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terrymac replied on Fri, Jun 26 2009 11:35 PM

How do you know in advance which efforts are "ridiculous" and which are viable? It's like spaghetti - throw it on the wall and see if it sticks. These small distros are not "waste" - they are experiments, some of which succeed, some of which do not. As Edison is reported to have said after being asked how he felt about 10,000 experiments to create a light bulb which failed, "I now know 10,000 ways to not make a light bulb." Quite often, the successful experiments are taken up - at very low cost - into the mainstream distros. For instance, there are some "scientific linux" distros. Much of their content can be obtained in ubuntu as a "math-scientific" package -- if you want, you could roll your own package which would bring in all the little bits from any new distro.

Open Source software already blows Microsoft out of the water. More and more businesses are ripping out their IIS servers and replacing them with Linux and Apache. Many individuals prefer Firefox to IE. Many switch to Linux after that disastrous Vista launch. It's not hard to like a system which doesn't get infected with viruses and malware within 20 minutes of being connected to the internet.

When an open source program is a dog, it is abandoned by the customers; there's always a competitor which does it better. There is no one monopoly Linux distribution, and that is a good thing. While Linux gets all the notice, there are several BSD flavors which could easily supplant Linux, if the developers were ever mad enough to release the Linux equivalent of Vista.

 

 

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ama gi:

h2sammo:
how can the developers know the wishes of potential consumers and plan their development accordingly if there is no price/loss/profit indicator? prices (and the effect of loss and profit) are very important tools in doing any sort of economic calculation.

Linux isn't a business.  It's more like a co-op.  In the open-source world, the producers are the consumers.  The producer knows exactly what the consumer needs, because he is the consumer.

i think i reach the same conclusion

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