(Note: This is post 3 of a multi-part series about Open-Source Software (OSS), and what the idea of Open Sourcing means economically. Read post 2.)
<>< Josh Rule : : 2008 MCPP Intern
This series has already looked at what exactly Open-Source Software is, and it has explained how Open-Source Software measures wealth in extra-monetary terms. Another interesting feature of the Open-Source and Free software communities is that wealth is not capped. Everyone could in theory write excellent code that gives them excellent rapport and status within the community. There are very few theoretical limits on the available amount of reputation.
So, the Open-Source community denies one of the basic tenets of modern market-based economics; namely, it holds that, as a rule, resources are not scarce. There are plenty of people to answer questions. There is plenty of hardware and bandwidth to go around. There are plenty of interesting projects on which to help. One’s reputation is not limited by the amount of reputation to be shared by all, but only by the work one decides to give to the community. Because resources, on the whole, are not scarce (though they say there is never enough caffeine to go around), the standard market-based approach does not serve as the most accurate metaphor for the economic activity inside the Open-Source community. Instead, the idea of a gift culture is more accurate, but it is even less commonly understood than the market.
A gift culture, or gift economy, is one in which, unsurprisingly, goods and services are given without expectation of repayment. Usually, they appear amongst groups that live in abundance and value honor, goodness, or other intangibles – such as reputation – as supreme. Rather than operating on a barter system, which is, at the root, what most monetized economies are, goods are freely given to some individual in the community. Greed is largely prohibited by strong social norms demanding that one contribute back, so the process continues. For more examples of a gift culture, think of the Pacific Northwest Native American potlatches.(Philosophically, one might think of this culture as focusing nearly exclusively on Kant’s wide or imperfect duties in their transactions, whereas a barter system focuses primarily on narrow or perfect duties)
In the Open-Source community, the gift culture plays out nicely. Those who want to gain a better reputation give time and effort to develop code, test code, write documentation, design graphics, and contribute in a dozen other ways to the design and success of a project. Over time, their giving is recognized as significant and useful, so their reputation grows. Their wealth increases. Similarly, if one is stingy in giving back to the community, wealth decreases or is never established at all.
Some will object, saying, “Well, what about all those people who just download free software without giving back? Aren’t they just free riders who break the gift culture theory?” The answer to that question is no. First, the gift culture theory does not fully apply, as free riders would not, by definition, be a part of the Open-Source community. Second, the individuals who simply download code do not detract at all from the gift culture of the Open-Source community. The community is self-sustaining and would continue to develop as it does currently whether or not other outside the group downloaded and used their work. Moreover, the costs for allowing another download from a web server already serving the Open-Source community are so negligible as to be nearly forgotten. That is, there is almost no cost for allowing free riders to download and install Open-Source software. Actually, there may be some benefit, as these free riders tend to be less technically oriented, meaning the products they use must have a better design and more intuitive interface than if those products were simply for technical users. So, free riders, in this case, might be considered to do good, nor harm, to the community.
Hopefully, this post has piqued your interest in a little known type of economy that relies upon abundance, and not scarcity, for its existence. Giving, rather than trading, is the rule, and strict social norms ensure that giving continues. The gift culture is a helpful model to consider when discussing the economics of the Open-Source community, itself full of intriguing economic quirks. The next post in this series will look at why Hardin’s “Tragedy of the Commons” does not hold in the economics behind Open-Source development. Stay tuned.