Tocqueville Blames U.S. IT Troubles On Free Software

twitter writes "The group that told us closed source was more secure than open source, now tells us that "Open source software, also described as free software, is the neutron bomb of IP" that will destroy 85% of the market value of US companies and drive companies who are currently outsourcing to "draconian measures even worse than outsourcing." So, there you have it, free software is responsible for bad laws, out sourcing and bad hair days." (Remember who funded the same group's report on open source security?)

Comments

Cough-Cough-Bullshit!

[Goo.cc]

"The report warns governments against relying on open-source software for national security."

Personally, I would recommend against using closed source software produced by any company that outsource their programming. It seems to me that is a security risk of incredible measure.

I would also like to suggest that Tocqueville create a report on how an illegally maintained monopolies can hurt the computer industry.

Re:Cough-Cough-Bullshit!

[tcopeland]

> "The report warns governments
> against relying on open-source software

Since the government is busy sponsoring open source software, I think this warning falls (happily) on deaf ears.

Re:Cough-Cough-Bullshit!

[Anonymous Coward]

0) MS said they couldn't reveal source code in court because it would be a national security risk.

1) MS has allows China (and other countries) to see the MSWindows source code.

2) closed source is better for national security.

3) 1+1=10?

4) ?????

5) Profit!

Re:Cough-Cough-Bullshit!

[Coryoth]

Hmmm

SELinux or Windows 2003 Server.

I wonder which is more secure and less of a national security risk?

Jedidiah

Re:Cough-Cough-Bullshit!

[Turmio]

> > "The report warns governments
> > against relying on open-source software
>
> Since the government is busy sponsoring open source software, I think this warning falls (happily) on deaf ears.
Yes, but these guys must be quite specialists of national security since they have the nerve to question the doings of this governmental organization with track record for not having that nonchalant attitude towards security issues :)

Re:Cough-Cough-Bullshit!

[Global-Lightning]

Yep,
Anytime someone trots out these "Open Source is bad for the goverment" pieces,
I like to hit back with the MITRE report titled Use of Free and Open-Source Software (FOSS) in the U.S. Department of Defense

Choice quote (emphasis added):
"The main conclusion of the analysis was that FOSS software plays a more critical role in the DoD than has generally been recognized. FOSS applications are most important in four broad areas: Infrastructure Support, Software Development, Security, and Research. One unexpected result was the degree to which Security depends on FOSS. Banning FOSS would remove certain types of infrastructure components (e.g., OpenBSD) that currently help support network security. It would also limit DoD access to--and overall expertise in--the use of powerful FOSS analysis and detection applications that hostile groups could use to help stage cyberattacks. Finally, it would remove the demonstrated ability of FOSS applications to be updated rapidly in response to new types of cyberattack . Taken together, these factors imply that banning FOSS would have immediate, broad, and strongly negative impacts on the ability of many sensitive and security-focused DoD groups to defend against cyberattacks."

Overall, MITRE carries much more credibility in the government than some apparently politically and economically motivated "thinktank"

Re:Cough-Cough-Bullshit!

[scotch]

There are 2 types of slashdot readers, those who have seen this little math gem a million times and no longer think it's amusing, and those who haven't. The second category is comprised of 1 user with retrograde amnesia.

Wah! Stomp your feet! Wahh!

[grub]

So, major U.S. corporations are heavily investing in developing a widely available 'free software inventory' that is open to anyone to use or customize at will. If customers only want to use free software, they will buy more hardware and services because there is no additional cost for software. Moreover, with no software costs, even hardware development, etc. becomes even cheaper.

I always thought that the customer looking for, and receiving, the best value (or "bang for the buck") was one of the inherent features of capitalism. Now that the business model for software firms is being turned on its head Ken Brown is crying foul. I didn't hear Brown whining when domestic garment manufacturers started moving all the sewing jobs overseas to sweatshops which put far more people out of work than the current IT outsourcing.

Of course, being a pieceworker in any industry isn't considered a "glamour job" on Wall Street.

Re:Wah! Stomp your feet! Wahh!

[james_in_denver]

The report state:

The bottom line is this: a non-IP future means that all companies in the Baruch Lev study go to from 85% to 0% in intangible asset value.

That article fails to address the point that their costs associated with developing and maintaining IP (Intellectual Property for the uninitiated) will also drop to near $0. This allows most business to focus on, well for instance, their business. It frees them in some regards from worrying about how much budget to allocate for the overhead of purchasing and maintaining closed source IT "solutions".

Re:Wah! Stomp your feet! Wahh!

[gabebear]

GPLed software that a company owns the copyright to is probably still recorded as an asset. I imagine SGI's XFS copyright is now worth more than it was before releasing it under the GPL. If someone wants to use XFS in their non-GPL OS they are going to have to licence it from SGI. Even if they put XFS under a BSD licence, there would still be some value as the creator as an "expert".

Some software re-released under the GPL(probably adding some asset to the original company).

• Quake II engine
• MySQL
• Blender
• QT
• a bunch of games

Re:Wah! Stomp your feet! Wahh!

[ciphertext]

An organization obtains their piece of the market share by holding a competitive advantage over the rest of their industry. If a company uses nothing but open solutions, they lose a competitive advantage and they are put on an even level with everyone else using open solutions or on a lower level than the organization that does hold a competitive advantage with its IP. For a competitive business, it doesn't make sense to do this, and they won't do it. Open source decreases expenses. But open source also decreases competitive advantage and the most powerful organizations depend on their competitive advantages to stay at the top of their industries.

I don't think merely owning open source products instead of closed source software weakens (or even levels)your ability to maintain a "competive advantage". What gives you the competitive advantage is how "efficiently" you produce your product or provide your service compared to your competitors. This also "assumes" that your product/service is "perceived" to be relatively equal in value to your competitors. You obtain a "competive advantage" by being the most efficient producer/provider of a product or service. The way that you "implement" your IT solutions (closed or open source) plays a role in making you more efficient, however, merely the ownership of an IT solution doesn't make you more efficient. If the implementation augments (by making you more efficient) your capability to perform your business processes, then you will have a competitive advantage over someone who does not have that same capability. IT solutions do not drive a business. Your business practices and processes are what drive the business. The IT solutions merely make you more efficient (in theory) in executing those practices and processes.

Re:Wah! Stomp your feet! Wahh!

[JWW]

Yes I am sure of that. If Ford does not modify the kernel they do not need to release their code for the control system of the car. If you write a game that runs on Linux do you need to release all the code for it just because you run it on Linux. Of course not!!! Oracle runs on linux and the last time I checked they haven't put any of their code out there under the GPL.

Also, if Ford wanted to they could even create driver modules for the kernel and still not be required to include their source. See nvidia's Linux display drivers for this case.

For god's sake

[Ckwop]

Nonsense Squared! This is really unreal. I'm not a linux zealot but open source is at the *VERY least* as secure as closed source and has the potential to totally surpass it through the ability to get such a large amount of peer review.

I don't see how companies saving money is going to lead to the end of the American way anyhow.

I just love it when people say open source is anti-capitalist and unamerican. I think quite the opposite. It embodies the spirit of America. Capitalism is about maximising profit. Open source achieves that by being free (as in beer) on the whole. American's also love freedom of speech. Open source is more than freedom of speech. It's freedom of information. Companies don't like this fredom because they can't control it. It is cancerous but this isn't a bad cancer.

If I put my blood and sweat into a piece of software and GPL it I sure as hell don't want a closed sourced vendor to take my hard work and make money from it - I don't see how that is unammerican. It's not Marxist, as some suggest, I still believe the code is mine and there's ownership to that code. It's just that i've made it freely available provided you follow some simple rules.

Another point. The business value of code is not tied to applications as such.. it's tied to the code that bridges those applications. That's where you pay money the money for programmers. Open source will generally have no effect on the value of this important intellectual property. It just means you may not have to reinvent the wheel to do a job that's partly been done before..

And besides, even if his logic was sane, if people are outsourcing jobs to india to save money then by the same token the open source neutron bomb should be able to take a chunk out of the market value of a few corporations. You can't have your cake and eat it.

Simon.

Re:For god's sake

[CrosbieFitch]

...GPL it I sure as hell don't want a closed sourced vendor to take my hard work and make money from it.

In case you didn't notice, the GPL fully embraces the idea of a vendor (Microsoft or anyone else) being able to take your GPL source code and make money from it. All it requires is that if they release anything based on your source code, that they must release all the source code too. The GPL is not about preventing anyone from making money.

Re:For god's sake

[Rich0]

And it also requires that MS not be able to restrict their customers from distributing the code themselves.

Suppose MS made MS-linux based on the linux kernel and distributed it under the GPL for $10,000 a copy.

Another company would just buy one copy and then resell it for $14.95 if they expected to sell at least 1000 copies.

That is the other half of the GPL - you must license your derivitives under the GPL as well, which means that others are free to use the derivitives.

Re:For god's sake

[jdavidb]

I'm a libertarian and an extreme laissez-faire capitalist. I agree with you that I can't see how people believe Free software is anti-capitalism. I am pro-Free software because I am a laissez-faire capitalist.

Intellectual property is a government granted monopoly. I do not agree with government granted monopolies, both on ethical grounds (just not right to restrain everybody else that way) as well as practical (not as good for the economy as some people think; the alternative is better, as demonstrated by Free software). Thus I value Free software as a legal means of resistance against these monopolies.

Read clearly what it says is the purpose of intellectual property in the Constitution some time. The purpose is not to recognize the inherent right people have to their ideas; the purpose is to "promote the progress of science and the useful arts" by "securing for a limited time" an exclusive right to an idea for its inventor. That's a government-granted monopoly. If there were some issue of inherent rights here, then this right would last forever and making it end after the limited time would be immoral. (Your rights to your house don't expire after 14 years.)

Furthermore, I don't agree that the progress of science and the useful arts is part of the purpose of government. I believe granting these monopolies and restraining everyone else who didn't come up with an idea is unethical. Furthermore, I believe it actually hinders the progress of science and the useful arts. Free software is proving that when these monopolies (effectively) don't exist, everyone can build on the work others have released, and the science of software construction advances faster than it would have had people exercised their privilege of government-granted monopoly. In the same way, all science in history has been built on the work of others, and we can best help the advance of science by not restraining those who would use and advance the ideas of others.

Yes, as many point out, if intellectual property laws didn't exist, the GPL and copyleft could not exist, either. However, this misunderstands the purpose of copyleft. If you read what RMS has actually said (most people don't), you'll find that copyleft was invented as a weapon to strike against what he felt was an immoral exercise of copyright. He talks about how he used the rationale that it was acceptable to use the enemy's own weapon against them, even though he didn't agree with what they were doing. Copyleft is a way to use copyright law to work against what RMS felt was an abuse of copyright law.

RMS may be a communist hippie or something like many people say; I don't know. He and I certainly don't see eye to eye on everything (he doesn't advocate the abolition of intellectual property laws or copyright, actually). All I know is, when I think things through from a libertarian point of view, I arrive at the conclusion that Free software is the laissez-faire capitalist way.

Re:For god's sake

[jdavidb]

Read Selling Free Software from GNU. As I said in my other post, noone ever seems to bother to actually read the things RMS and GNU puts out.

I'm not really karma whoring with this link; just trying to get more people to read this so we can actually see informed discussions instead of misunderstandings like this.

Re:For god's sake

[jdavidb]

Did you even read what I wrote?

First off, you're not a libertarian.

Sure I am. I'm currently a minarchist libertarian, but learning towards anarchist, also known as anarcho-capitalist.

There's more than one kind of libertarian, you know. Those who, like me, disagree with intellectual property laws are still a minority within the movement, but we are a significant minority. Here's a good discussion of the issue. Here's some more perspective. Saying libertarians are all agreed on the issue and that I'm not a libertarian because of my position on this is a misrepresentation. As Eric Raymond says, the non-coercion principle is about the only thing all libertarians agree on.

Secondly, a basic government is needed to protect property rights (that's a tenent of Libertariansim)

You're dismissing an entire branch of libertarianism, there. Anarcho-libertarians do not believe a basic government is needed, at all, or believe that government itself should be demonopolized (allowing a choice between any number of independent governments in a geographic area, or starting your own). Now, most of the ones I hear from still seem to believe in intellectual property, but I'm at a loss as to how intellectual property law is to be enforced in anarchy.

Furthermore, as I said in my post (did you read it?), I do not believe "intellectual property" is a property right. Nowhere in our legal code is it acknowledged as a right; it is a gift from the public encoded in the Constitution NOT because people have an "inherent right" to their ideas, but in order to promote the progress of science and the useful arts. (Did you read the Constitution?)

Your assumption is that everybody wants to code for free, which is utter bullshit.

Where did I say that? Strawman, or else you're reading somebody else's post.

I don't code for free, but I don't produce proprietary software, either. Something like 70% or more of the coding industry is not jobs for software makers like Microsoft or your favorite game company but coding custom software that is only of interest to one particular company. This will never go away; intellectual property laws have zero bearing on whether this kind of work needs to be done or not. Furthermore, removing the government-monopoly grant of intellectual property would radically change the software industry but not destroy it. Free software is demonstrating that. We are slowly approaching the point where, even with the protection of the government grant of exclusive rights "for a time," proprietary software will be unable to compete on price, features, performance, or TCO with Free software. That's the point of the whole article from Tocqueville! They see Free software as a neutron bomb that will "kill" the industry. What it will do is not kill it, but change it forever. There will still be money to be made in Free software. And even if not, people still have the right to give their "intellectual property" away for free, so this change is going to happen anyway.

How do you propose protecting the rights of people who develop software and want to sell it?

I do not believe anyone has a right to a profit at any particular business model, nor do I believe anyone has an exclusive right to an idea they have originated, thus I do not propose protecting these alleged "rights." (I do, of course, believe in protecting all the same rights for everybody, so they'd have the same basic rights as you and me.)

Meanwhile, it's not impossible to make money selling Free software. Why don't you do some reading some time?

so all software development is in the hands of people who happen to have the time and mone

Offcourse, we already knew this.

[BorisZ]

And it will also recede your hairline by 10 years, eat your cat, set fire to your car and break all the windows in your house. But hey, it's cheap :)

Re:Offcourse, we already knew this.

[Adriax]

"Closed source software, on the other hand, is safe, secure, promotes capitalism, whitens teeth, burns calories, promotes hair growth, feeds and grooms your pets, vaccuums your living room, cures cancer, and fights terrorists."

Business Model

[jenohn]

From the article... >>This feature makes selling GPL'ed software inane because anyone that agrees to the terms of the GPL can also have a copy of the same software with the code - for free. There are a lot of businesses making some fine money from selling that free software. Redhat, Gentoo, Mandrake, etc.

Re:Business Model

[MrIrwin]

"There are a lot of businesses making some fine money from selling that free software. Redhat, Gentoo,"

Of course Gentoo's founding father and chief architect had to throw in the towel recently because he was not making any money from it and had run up $20,000 of debts.

Microsoft!=All business revenue from Software

[foidulus]

One just needs to look to IBM for a great counter-argument. A few months ago IBM announced that it was going to form special groups of IT people that would each concentrate on a different area(ex: manufacturing, retail, banking etc). They will get a base of FOSS then add custom software etc to that base to help the business be the most efficient it can be. Having worked in a manufacturing environment that made extensive use of Linux, I can tell you, it is a great help.
The offshoring thing is also laughable. A lot of what is being sent offshore is stuff like back office banking coding, not a whole lot of FOSS software for that. FOSS helps level the playing field between giant corporation and small business. Now a little guy can get into the game without having to sign over his first born for windows licences or have to have an army of lawyers on standby in case the BSA comes knocking on their door because someone forgot to activate their copy of XP.
Which brings me to a random aside, if you really want to avoid being offshored, SPECIALIZE! Learn something in addition to CS.

You know...

[blackholepcs]

I'm sick of all this crap about free software is the devil. Free software isn't the problem. Crappy software and hike prices and outsourcing are the problems. If companies who charge for their software would quit producing fodder and being dicks, free software wouldn't be an issue for them. Maybe they should just start producing quality products at a fair price that are made by people who speak the same language as the country they are selling the product in.

Doesn't make sense

[Uma Thurman]

The simple version: I make money using open source software, because the marginal cost to learn or use just one more tool is zero. With closed source software, I have to pay somebody for everything that I use, which limits the number of tools that I have.

So, when I have all these free tools laying around with no restrictions, I'm better off because I am limited only by my imagination. My counterparts who are limited by the size of their wallets can't compete with me.

The end story is that if I'm an employee, I get bigger raises. If I'm a business, I have more money to hire people with.

Meanwhile in another story......

[MrIrwin]

There is a report about the explosive growth of smaller software companies offering IT solutions specifically tailored and maintained to local customer requirements.

A large service industry that is not outsourceable.

Funny, IBM has been doing better...

[aquarian]

...since they started using open source software extensively, and selling products and services based on it. Other companies based entirely on open source software have made many people rich -- Redhat, for example.

Gee, I wonder if someone in the proprietary software business is backing these De Toqueville folks -- Microsoft, perhaps?

Question:

[Paulrothrock]

How does open source cause outsourcing? People are still needed to configure and support it, and since it's free, they can spend more to support it. Support (the kind found at enterprises) is very hard to outsource because it requires local people. Closed source can only be fixed by that company. Can someone explain their reasoning for me?

In other news, sky is blue

[Alioth]

It's obvious that Free software will cause the business in proprietary software fall sooner or later. It's just not news.

The question is: is it a BAD thing?

Of course, there will be bleating about lost jobs. In the long term, though, it will be only a tiny number which will be absorbed elsewhere as companies have more money to spend on making software what they really need, thanks to the ability to customize. They will have to employ programmers to do this for them or other companies to provide this service. Open source will be bad news for some developers and some customers, but it's very good news for many more companies. Business models sometimes go out of date. People have to deal with it.

I believe in the long run, OSS will be good for employment and the IT industry; it will take away artificial scarcity. It's funny how we as a human race clamour for instant and inexhaustable supply of everything, but as soon as we make something that's easy to make an instant an inexhaustable supply of (a copy of a program), we suddenly have to make it artificially scarce!

Re:In other news, sky is blue

[ballpoint]

we suddenly have to make it artificially scarce!

Not by a long shot. You can buy as much proprietary software as you want, you are not going to exhaust the supply. And prices would not rise due to increasing demand - they probably would fall instead.

So there is no scarcity. Then why does proprietary software have a price, which, in traditional economic theories, is a proxy for scarcity ?

New economic theories are needed for music, movies, and to all stuff with perceived value but zero marginal cost. I think we haven't seen the full ramifications of the digital era yet.

This guy...

[Chordonblue]

...is clearly an asshat. And I don't use that word lightly friends. Here's two quotes that stood out for me:

"However, the open source strategy is a triple-edge sword..."

If you're going to use an analogy how about one that at least sort of makes sense. For some reason I keep thinking about those triple bladed Gillette MACH 3 razors here. ..and

"...most free software such as Linux, (the most popular because of its operating system capability)"

I could've shown you the many typos and bad sentence structure but this one statement shows how little this writer (or his 'writing capability') understands about Linux and/or Open Source.

They give people like this positions where they're stuff can be read by the public?! Amazing!

Market value vs. productivity

[amightywind]

Open Source software...that will destroy 85% of the market value of US companies and drive companies who are currently outsourcing to "draconian measures even worse than outsourcing."

The market value of a few software companies is irrelevent compared to the massive increases in productivity and standards of living that result from free software. Even though the world is awash in free software, creating systems and solutions using it is still very lucrative. Ask IBM.

In related news...

[Bronster]

People all over the country are destroying the American way of live by entering into a Marxist arrangement called "Marriage" in which they agree to share resources.

This "Marriage" is destroying the market for prostitutes and other providers traditional pay-per-use facilities. While it is true that using the opensource style "Marriage" arrangements it is often more difficult to arrange to get sex, with cryptic error messages like "I've got a headache" with no friendly interface where you can uncheck headache box and get your end in, many people are still choosing this threat to society.

It must stop. Join with the good capitalists and put an end to these terrorists trying to take out country by stealth. Ban marriage!

job loss due to MS

[fermion]

I believe MS is the cause of most proffesional developer job loss in the US. They create products that encapsulate knowledge and often allow less skilled workers to approximate common tasks in a shorter time.

This has been going on for a long time. I personally remember the original SCO losing sales to MS as developers began to port products over to DOS and Windows. This meant that qualfied admins were being replaced with college kids who knew Windows.

Then it was the visual languages. A person no longer needed to have a basis in best coding practices and best GUI practices. Just whip some widgets on the screen, and look Ma, I got me a program thingy.

Then it was Frontpage. Who needs W3C compliance. Who needs to employ web browser developers. MS gives away IE and kills the browser industry. Who needs to hire qualified developers. Just put some Flash on the screen, say it is IE only, and the public will think it is a proffesional job.

Re:job loss due to MS

[stratjakt]

What idiocy.

And Black and Decker costs jobs because they sell power saws and nailers that allow a single carpenter to frame out a new structure, when once upon a time it would have taken dozens to complete it in the same timeframe.

We should pass a law barring people from creating better tools for getting things done. Everything should be like the way Linux and the Amish do it - as backbreaking and labor intensive as possible, because that means more work!

The joke of it is, you were modded insightful on "we hates msft" principles, while I'll be modded flamebait/troll/offtopic because it may appear I'm "defending" them.

Accomplishments

[barfomar]

It's interesting the that a click on the "Accomplishments" of the ADTI web page brings up:

"Not Found

The requested URL http:// was not found on this server."

Alexis de Tocqueville

[Joehonkie]

It's really sad that they are using the name of a great man to push this kind of bullshit on people. I'm sure an individual like him would actually be quite impressed with Open Source.

Still, doesn't seem to be worth getting excessively upset over crap like this unless the government starts making laws based on it.

Re:Alexis de Tocqueville

[Daniel Dvorkin]

Yes. De Tocqueville described a young America built on freedom, innovation, and opportunity -- the same ideas that underly F/OSS. For this bunch of reactionaries to call themselves the "Alexis de Tocqueville Institution" is like starting an anti-semitic group and calling it the "Simon Wiesenthal Institution," or a group dedicated to the restoration of the monarchy and calling it the "Thomas Jefferson Institution," or ... oh, hell, you get the idea.

Missing the point?

[oddman]

I think its important to realize that the author of the story *is not missing the point* of Open/Free software. He clearly sees it for what it is (at least partially,) an attack on corporate models along the lines of Microsoft (and Sun and IBM before they started to come around.)

GNU/Linux is that! It is true that GNU/Linux advocates want proprietary, closed-source models to fail. The author gets this. In his opinion that is a really bad idea because a huge chunk of US GNP is based on that closed model.

Now whether or not you agee with the conclusion drawn is one thing, but you should not be accusing them of being unaware of the realities.

Chewbacca!!

[shystershep]

Article summary:
85% of market value of US companies == intangible
intangible value == IP
F/OSS software == anti-IP (& in fact will destroy it, somehow)
Therefore, F/OSS == the destruction of 85% of the value of US companies

I don't know where to begin, this article is so full of holes.

Probably the most glaring error is equating "intangible value" with "IP," and claiming that F/OSS will destroy the former by avoiding the latter. First of all, F/OSS is not anti-IP. If anything, it is merely anti exploiting-IP-till-it-squeaks, but the GPL (etc.) are all about copyright, not against it. Second, what the hell does any of that have to do with trademarks? Last, but certainly not least, where are this guy's numbers? If 85% of "market value" of companies is intangible, and open source and outsourcing are going to destroy that value, wouldn't there be some measurable impact since 1998 (when the 85% number came from) with the increase of Linux market share and outsourcing the last several years? There ought to be some evidence for his position if it is at all defensible.

Well, that's enough rant for now. I've probably made even less sense then this bozo, but idiotic, scare-mongering, groundless spin like this makes my blood boil. (Which is why I avoid TV even more in an election year.)

The american way and open source.

[Yartrebo]

I just love it when people say open source is anti-capitalist and unamerican. I think quite the opposite. It embodies the spirit of America. Capitalism is about maximising profit. Open source achieves that by being free (as in beer) on the whole.

After hearing at least this argument and the opposite argument (that it's communist) 1,000 times, I've got a neat theory: Open source combines the best aspects of both systems. You get the cheapness, efficiency, and transparency of a free market and you also get the equality and sharing of a communist model.

Ideal communism (as opposed to Soviet and Chinese communism) doesn't allow for copyrights (it would fly straight in the face of the communal model of sharing), and while the GPL relies on copyright for keeping the source open, under communism you would have to share source code you write, since it belongs to the state for everyone's use, so both achieve the same noble end.

Free-market capitalism (as opposed to our crony capitalism and corporatism) maximizes efficiency by setting marginal cost to marginal price, which in the case of software, movies, music, etc., is very close to zero. If you supply the resources, like with P2P, it would be free.

Open source also avoids the pitfalls of both systems. It gets around the state censorship problem by distributing control - anyone can fork off a project is she/he feels like it. It also avoids the problems of monopolists, rent-seekers, corporate censors, and other dirtbags that you find in capitalism.

Re:The american way and open source.

[gowen]

Well, its an interesting thought. My own opinion is that Open Source Software is merely a natural reaction to the fact that software is, essentially, outside most economic principles, which are firmly grounded in scarcity.

Well, excluding Duke Nukem Forever, what little scarcity there is in software is artificially created ("We'll make this stuff expensive, because our coders have got to eat"). If suitably licensed, I can share it around at almost no cost to myself.

Capitalism says "get hold of something scarce and barter it for other scarce things." Communism says "gather together all the scarce things and try and share them out equally." Diametrically opposed, but both relying on scarcity.

Linux is immune, because there isn't a limited amount of it to go round.

IP Theft

[Thnurg]

I stopped reading when I read the term "IP Theft".
Do these people have a clue?
You can't steal Intellectual Property. Why? Because it is not property. It is not governed by property laws. Sure, someone who violates copyright is breaking the law, but no court in the US or UK will convict them of theft.
These people seriously need to get a clue before publishing uninformed rants.

Re:Article reaction

[jrexilius]

actually they will make it an approachable commodity for all people, not just the rich and large corporations in the same way that has happened with cars, electricty, telephones, textiles, etc. The net effect of this is that everyone gets richer as they can devote more resources to new and better competitive advantages. The other side effect is that research and development will improve as well as quality. study a little econ man..

Open source and free software is merely a response

[codepunk]

The open source and free software is a natural response to draconian measures by proprietary software companies.

It is a response to over priced buggy software.

It is a response by developers that are tired of monopolistic control artificially imposed by vendors of propriatary software.

Open software wrenches the control back to the individual and individual developer.

It may shift control and the current business model but it will hardly mean the end to the software business. Open source software has already changed the software business and it is going to overtake it in my opinion. The only question is are the software development shops going to adapt or die?

Lies, errors, half-truths and suppositions

[iPaul]

1) That liberal IP policies and free software will shrink the value of existing IP property. False - it will probably raise the total amount of IP capital over the long run. More producers of IP will have access to more tools and be able to provide more solutions on more platforms.

2) Outsourcing is bad - okay outsourcing is bad.

3) Outsourcing ruins US IP. The value a company places on a process, technology etc, is purely subjective. There's an accounting value - which is a function of the acquisition cost and r&d costs, but if they value an asset they will protect it. Companies that take core business processes overseas where IP property theft is rampant are either stupid, or these processes don't have a lot of value.

4) GPL only allows you to develop GPL software - Where do I begin - he said shaking his head in dismay. You can write (and people do write) closed source software based on an cooperating with Open Source software. In some cases you must release certain parts of code, in other cases you can keep it all locked up. Either way, Oracle, IBM, BEA, Sun, etc. all have proprietary software that runs on GPL based platforms.

5) The author assumes that the accounting value of IP = the real value of IP. In some cases you have large "IP assets" that are worthless. Think OS2 software. However, you have to depreciate them on your books because of accounting rules. Also, it doesn't follow that enforcing all your IP claims will make the economy better off. If everyone started suing everyone else over IP, then no one could produce software and what little there was would skyrocket in cost. Remember IBM owns a little here, Oracle some ther, Intel has some, etc. but no one owns even enough to make a complete O/S.

That what's in GPL'ed software is necessarily valuable IP. In some cases these are concepts that have been written about in O/S textbooks for 30 years! Many are based on industry standard APIs or widely adopted practice. Read - Unix like kernels and related software are good, stable technologies but not exactly hot off the press.

Summary - The Tocquaville author is an idiot

I've seen one of those!!!

[Chordonblue]

Now that I think of it, I think I've actually seen a triple-bladed sword. It was the day ATi released the 4.3 Catalyst update to my Radeon 8500. I installed it, rebooted, and proceeded to play Dark Age of Camelot.

Hoo boy! I had lines going every which way, textures out of place, the works! But I remember that those who held flame or ice blades had three or four polygon planes of blade sticking out (instead of fire or ice effects)!

Uhhhh, no... That's probably not what the writer of this article was thinking. :P

Obligatory Netcraft check:

[sammy baby]

According to Netcraft, www.adti.net is running FreeBSD.

Why, oh why, does the Alex de Tocqueville institution hate freedom so?

He's making an incorrect assumption.

[composer777]

He's assuming that the direction the US IT industry was headed was a good a direction, with a small minority of people owning everything. I agree, free software does strike a major blow to US corporations, and this is a good thing. Of course we can expect him to whine about how it's hurting them, but that's exactly what the point is, it's to loosen the grip of major corporations on IP, at all costs. It doesn't make sense to give corporations complete control over IP, if, in the long run, they'll simply lock it up and throw away the key, keeping a small team of programmers around for maintenance activities after the majority of work is done, but still charging the same price.

As far as free trade goes, let's try not be naive. He's implying that corporations are really nice guys who wouldn't offshore if only we could get rid of free software. This is an old trick. What he's doing, is he's taking two groups that are a threat to the IT industry, and these groups are:
1. IT workers who have recently been laid off and are upset at the industry for offshoring.
2. Open Source programmers who are creating software for free.

Now he is setting them up to fight amongst themselves so that they'll ignore what the industryis doing. The company I work for is doing the same thing. We have a Union here that is set to strike any day now. They keep bringing up the Union member's wages and saying,"See, look how much they get paid for what they do." Nevermind that they get paid a fraction of what I get paid. The assumption that they are implying is that the Union, by asking for higher wages, is causing my salary to drop and leeching off the company. That's pure nonsense. When low-level workers make more, then that causes everyone else wages to go up as well. This kind of wage inflation might be seen as a bad thing, until you realize where the money is coming from. It's coming from the top 1%. That top 1% owns about 43% of the wealth in the US, and they've managed to acquire 15% of that 43% in the last 20 years. When one knows that single fact, it's easy to see who the leeches are. They've stolen a huge chunk from Americans through scams such as free trade, credit cards, IRA's, Enron, Haliburton, etc., and getting some of is back to the people who actually work for it is a good thing in my opinion.

this is true

[VAXGeek]

It was also true that inventing electric lights spelled the end for candle makers. No one cared about crossing the Atlantic with a sail when they could use an engine. Gasoline would not be used as much if someone invented a cheaper way to get a car from here to there. Basically, software companies sell something that you cannot really touch and that can be copied infinitely. Free software can proliferate on its merits alone without worry of cost. On a long enough timescale, of course most commerical software is irrelevant. But there will always be those niches which OSS cannot fill, and commercial software vendors will turn to finding a niche and doing it best. I can't really see a future without OSS though, once you switch to it and it suits your needs, would you really ever switch back to software you have to pay for? I bet most shops that go open rarely go back 100% proprietary.

Who is this guy?

[futuresheep]

I can't tell from the web site if this is a legitimate institute or just some crank that has an opinion page of his own. It looks pretty amateurish to me, there's broken links on the site, like his:

Accomplishments Page

Support Page

He doesn't cite anyone, using the 'people contacted at' crutch. He's also inconsistent in his opinion. Tell me if I'm wrong, but I'm, simply underwhelmed by the whole thing this guy is about and simply don't understand whether or not he's important, or if I should care.

Value for whom

[StrawberryFrog]

Value for whom - software makers or software users?

If you are a shoemaker, then someone else giving away free shoes is a detriment to your business, but a benefit to the shoe-wearing population. If you are a software make ...

However, software makers are also software users: In order to write the business apps that I am paid to write, I need an operating system, a compiler, a database, etc. So I benefit if the software up the chain is cheaper (or if we broke the windows habit), but I might lose my job if the company's clients can get the same business app that I write for free. That's far less likely, as it's rather a specialised application.

A few large, and largely American, companies that exist to make software near the top of the chain will be the losers if free software takes over. The world's population in general will be the winners - they will pay less and get more, counteracting the tendency for the rich to get richer by further impoverishing the poor.

I asert without proof that it's not a zero-sum gain. That is, the total gains to many from freeing IP will always match or more likely far exceed the losses to a few rich people by not gettting IP-rent any more.

Thus I don't think it true that "downward pressure on intellectual property is having a serious impact upon ... the entire U.S. economy."

I'm very happy with that, but then I'm not one of the very rich few, and I don't own a large software company. The Alexis de Tocqueville Institution isn't happy with it, so take it from whence it comes.

Intangible_Assets GT Tangible_Assets EQ Fraud

[stankulp]

"In a widely quoted study, Baruch Lev of the Brookings Institution reported that in 1982, 62% of the market value of companies in the S & P 500 Index could be attributed to tangible assets, and only 38% to intangibles. By 1992, Lev noted, the ratio had essentially reversed: 32% of the assets for S & P companies were tangible, while 68% were intangible. A follow-up study by Brookings in 1998 reported that the asset ratio had shifted even more, with 85% of assets intangible, and only 15% tangible."

This sounds more like accounting fraud than anything caused by open source software.

Does anybody remember a couple of companies named Arthur Anderson and Enron?

Re:Linux

[edubarr]

Yeah, but only if you run it on emacs

But what would "MS Linux" be?

[roystgnr]

Just a derivative work of the Linux kernel? I doubt it. If MS really wanted to make a proprietary Linux distribution, they'd probably bundle it with a bunch of closed source user space software. You'd still be free to resell the kernel they gave you (and any modifications they made to it) for $14.95, but you wouldn't be able to redistribute other MS programs just because they came on the same CD-ROM.

And in another analysis...

[Znork]

Tocqueville blames the rivers, oceans and rain for the devaluation of the 'liquid assets' of water bottling companies.

Many of the companies in the bottled water industry have invested heavily in, well, water. If the availability of free water is allowed to continue these assets are not worth as much as they could be.

Tocqueville now recommends that the oceans, rivers and lakes be drained in order to build a huge and thriving industry around limiting the availability of water. Combined with legal measures like outlawing other sources of water, and turning off tap water, as well as forbidding private wells this would create a massive amount of wealth in the US. The economic slump could be dealt with in one swift stroke.

Tocqueville would also like to call attention to their upcoming reports on the availability of free air, beer, speech and life, and how the economy could benefit from some other new measures.

This is called the "broken window fallacy"

[roystgnr]

Wikipedia summarizes the allegory here.

It's application in this case is pretty simple: if a business need isn't met by free software, then proprietary software companies can still meet it and nothing has changed. If a business need is met by free software, then the value of any proprietary software companies who previously met that need hasn't been "destroyed", it has simply been transferred to their ex-customers, who now have more money to spend elsewhere.

This is something which will happen with or without free software, in fact. Economics 101 says that in equilibrium, marginal price will equal marginal cost, and even for closed source software marginal cost is under $1. It's possible to delay that price drop (by using monopoly power to deter competitors who might get into a price war with you, for example), but not to prevent it. Even if there was only one software company on the market, eventually they'd be outcompeted by the previous versions of their own products, which don't wear out and need to be replaced like tangible goods do.

Quite tired old arguments

[Wylfing]

This kind of "reasoning" was very popular in the eighteenth and nineteenth century in Europe -- that if Company A is providing a product for less than Company B, then A is causing a loss to the economy in the amount of B.price - A.price. Of course this argument is the reverse of the truth: the extra money required to buy B's product is a direct reduction in the customer's purchasing power, i.e., the customer's net wealth is decreased, and the aggregate economy stalls. (Corollary: lower-cost alternatives in the marketplace create wealth.)

Frederic Bastiat in 1848 wrote a nice essay called "That Which is Seen and That Which is Not Seen" dealing with this topic handily. A good portable copy is at Memoware.

However, then as now many lawmakers were persuaded by this lie and protected the established players from competition. Because of bullshit analyses like Tocqueville's we can look forward to many more years of a sluggish economy. As soon as we stop shielding big players vis-a-vis "intellectual property" we'll see a nice upturn.

The "Broken Window" Fallacy...

[pjkundert]

"If some punks run around town breaking windows, it will actually help the local economy (eg. the local shoe maker, etc.). This is because the home owners with broken windows will purchase new windows from the local Hardware store, and hence the hardware store owner will buy his children new shoes."

This fallacy is as old as time itself. It is provably false, trivially. (Breaking the windows increases entropy, reducing the total value in the system). The money going to buy the replacement windows would have been used on something else (eg. the shoes). The only winner is the company producing the windows. The loser is the community.

Microsoft is the maker of Windows, supplying all the local Hardware stores (the businesses producing software) with replacement Windows. Somehow, not being forced to buy new Windows every year or two will "hurt" industry. (Oddly enough, Microsoft gets to go around breaking its own Windows, and forcing you to upgrade...) The only loser will be those producers of proprietary software, who choose not to cooperate with, and take advantage of, those who produce FOSS . For example, Microsoft will lose, if I chose to use Debian for my next Enterprise project. Does that money vanish? No, it goes to my company's shareholders (via. Capital Gains or Dividends), or to my clients (due to lower prices), or to me (due to increased profits). It just doesn't go to Bill. Who loses? Bill. No one else. (Well, Tocqueville also loses, because Bill doesn't pay them to write stoopid articles any more, either...)

Take Apache, for example. Presumably, Apache hurts producers of Closed Source web servers. I cannot use the Apache code and re-brand it as "Joe's Web Server" (I think -- I haven't read the license, but I assume it is more like the GPL than the OpenBSD "free for any and all uses" license). However, this only hurts me if I (Joe) decide not to arrange my affairs to take advantage of Apache!

If I choose to fight Apache, then I am (probably) reducing the overall value in the system. If I have some non-trivial value to add, then I should quit wasting my time re-writing the same code that the Apache team is writing, I should encapsulate my super-duper value in some kind of an add-on to Apache, and I'll start marketing my company as "Joe's Super-Duper Valuable Enterprise Support For Apache, That You Just Gotta Buy, If You're A CTO!"

There! I (Joe) win, Apache wins, my client's win. Microsoft (IIS) loses. Who cares?

Re:Let the market do its job...

[karzan]

real capitalism (i.e. a free market), as opposed to the government-supplied corporate favoritism that today passes as capitalism

That's like saying 'real feudalism (i.e. a kingdom of God in which the Church and the monarchy are acting by divine rule), as opposed to the corrupt, rapine, impoverished system that passed for feudalism in the middle ages'. Perfect competition has never existed and will never exist. It is a model, for use in economic theory, that is intended to represent a theoretical tendency.

In REAL capitalism, i.e. the real, actual, existing economic system, since its birth several hundred years ago, (as Adam Smith repeatedly points out in Wealth of Nations incidentally) firms constantly attempt to influence and control goverment to pursue their own profit maximisation goals. This includes raising tariffs when they want them (i.e. against competitors) and lowering them when they are a problem (i.e. for export markets). Manipulation of politics for profit maximisation is and always has been a feature of REAL capitalism, and the inevitable result of this is non-free markets (although even without it, markets would not be 'perfect' as we do not have perfect information, 0 barriers to entry, etc).

John Maynard Keynes was an idiot. He convinced many governments that the way to create wealth was to print money

Keynesianism does not argue that the way to create wealth is to print money. It argues that the government should correct the cyclical fluctuations of the capitalist economy by creating countercyclical expansions and contractions--borrowing and spending in periods of contraction, paying off the debt in periods of expansion, not printing money, but trying to stabilise the economy through spending. Don't get the neoclassical synthesis (today's ISLM model) confused with original Keynesianism. There's a big difference.

And John Maynard Keynes was not an idiot; even if you disagree with him, he was ahead of his time.

The "American Way"?

[Entropius]

The "American way" is not about capitalism, per se. It's about liberty. Sure, capitalism is a part of this, since it's the economic system that gives people the most freedom... but the founding documents of this country show no special devotion to capitalism. The Framers' attitude toward economics is best described as "As long as you pay your taxes and play fair, do whatever the hell you want."

Free software is indeed anti-capitalistic, sort of. Capitalism is based on the notion that the value of all goods can be measured monetarily; the idea that someone would be willing to code for free (or for some non-monetary benefit, like prestige) causes a division-by-zero error in the system.

But it's certainly not non-American, since it fits with the *real* American ideal of liberty: do what you want, as long as you don't hurt anyone. Free Software coders aren't hurting anyone other than by out-competing them (which is legal). They're helping a great many people: those who get neat software for free.

(If I start handing out free cookies in the street in front of a bakery, I'm not breaking the law. In fact I'm a major benefit to society, because people get free cookies. Whether the bakery goes out of business isn't my problem.)

Disclaimer: the *ideal* American Way involves liberty and governmental non-interference. It doesn't exactly work that way any more...

Re:85% of tangible assets are not negligible

[colinrichardday]

Of course, if your company is not primarily a vendor of proprietary software, then how does it lose 85% of its assets?

Re:One Question...

[Minna Kirai]

This kind of over-generalization and mud slinging doesn't help anyone.

Microsoft is one specific legal entity. By definition, an attack against it is not a "generalization".

Re:85% of tangible assets are not negligible

[tybalt44]

Well, I think the market would see a company with 85% of its assets in proprietary software in exactly the same way it would see a company with 85% of its assets in detachable shirt collars, or VAX hardware, or overalls for chimney sweeps, or rotary telephone dials.

There's nothing wrong with that. The economy marches on. You can't halt economic progress just because the market means that progress produces winners and losers.

Time stands still for these people

[mabu]

You gotta love articles like this one, where these pundits compare two industries as if one is standing still. As if, open source software becomes dominant in the marketplace, traditional companies won't adapt and find a way to profit and change their business model. Nope. Not according to these guys.

If Linux becomes the standard over Windows, I'm sure domestic commercial software companies will just sit there and scratch their heads. They won't, for example, start bundling services and building new products around open source. Naw, there's no indication that this would happen. These companies will simply stop in their tracks like deer frozen in headlights and die and the entire tech industry will implode and we'll all be speaking Hindi.

Free software makes logical sense

[David Jao]

Free software is not capitalism... Capitalism assumes that people want to be reimbursed in some way.

Your problem is that you are narrow-mindedly assuming all reimbursement must be in the form of financial payment.

I have personally contributed about 300 lines of code to Debian, for free. In return, I have received all 15 million lines of code contained in Debian, available to use for free. If that doesn't count as reimbursement, I don't know what does.

Free software makes no logical sense, because people do it out of altruism and stupidity.

Let's logically analyze how stupid and altruistic my above mentioned contribution really is. I contributed 300 lines of useful code and got back 15 million lines.

1. Is this stupid? No. The 300 lines I contributed only took a few hours to write. The 15 million lines I got back takes a lifetime.
2. Is this altruistic? Not in my case. I wrote those 300 lines of code out of pure self interest. The only reason I wrote the code was because I needed it for my own use.
3. Does it make logical sense? It sure does. Each of the thousands of contributors receives far more value than he alone contributes.
4. How can this work while Communism failed? Because software is infinitely copiable. Communism tries to apply the sharing philosophy to material goods, which unlike software are not infinitely copiable.
5. What about the freeloader problem? Freeloaders are irrelevant for infinitely copiable goods. As long as the contributors themselves are adequately reimbursed, freeloaders do no harm.

The moral is, do not blindly assume that the economics of material goods apply to software. And please, for the love of god, do not attack all free software as having "no logical sense". If you're not gonna participate yourself (as is your right), at least don't interfere with other people who wish to participate out of their own free will (as is their right).

Re:Your post is not entire BS Free either

[AuMatar]

Access to the source is nothing. Can the government fix the bugs in it, compile their own versions, and deploy it on government computers? Nope. So the source doesn't get them much, if anything.