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FOSS Development As Economic Stimulus

heybus writes "Economist Dean Baker, best known for calling the housing bust and warning of the ensuing economic collapse, has just published his recommendations for how to allocate President-elect Obama's estimated $800 billion economic stimulus plan. Among other things, Baker calls for juicing the economy with $2 billion worth of government spending to support the development of free and open source software. Baker's idea is similar to the New Deal federal arts and writers' projects: the government would fund projects as long as they produce freely available code. In addition to employing programmers, 'the savings [to consumers] in the United States alone could easily exceed the cost of supporting software development.'"

31 of 365 comments (clear)

  1. "Called the housing bust" by rachit · · Score: 4, Insightful

    I mean who didn't realize housing was in a bubble, besides paid economists with special interests or complete morons? It was blindingly obvious since 2005.

    I only credit anyone for calling exactly when it would completely implode. That took brains.

    1. Re:"Called the housing bust" by Animats · · Score: 5, Insightful

      I only credit anyone for calling exactly when it would completely implode. That took brains.

      It was rather obvious to anyone who understands the fundamentals. I called it on Downside in 2004. I expected trouble sooner, around 2006. But the Fed cut rates, which merely postponed the inevitable and made it worse. Note that Baker also started predicting trouble in 2004.

      This stuff isn't really that hard. There are certain ratios that are grounded in reality. A house is worth about 2.5x to 3x annual income. Stock in a stable company is worth about 10x to 20x earnings. Whenever prices get above those upper limits, they can be expected to go down, and when they get way above those limits, it's a speculative bubble. All speculative bubbles eventually burst, because the supply of "greater fools" who will buy overpriced assets in hopes of selling them for even more is finite

      "The job of the Federal Reserve is to take away the punch bowl just as the party gets going. -- William McChesney Martin,, head of the Federal Reserve from 1951 to 1970.

      "I still do not fully understand why it happened." Alan Greenspan, October 2008.

    2. Re:"Called the housing bust" by khakipuce · · Score: 3, Insightful
      To all those people who "saw this coming" and new it was inevitable, did you bet everything you had on it? There was money to be made from the downturn and a lucky few did make money.

      Any one that did not bet their house on it is just being wise after the event. FACT, everyone knows that that level of growth is unsustainable - EVERYONE - the trick was in knowing whta would be the trigger for the collapse and when it would occur.

      --
      Art is the mathematics of emotion
  2. Just the idea is enough by Thanshin · · Score: 4, Insightful

    Simply establishing the idea that a source code base is like physical infrastructure will benefit open source projects even more than the actual investment.

    Having that reality as a frame of reference would make it much easier to push for the growth of that source code infrastructure.

  3. What about Microsoft? by fyoder · · Score: 3, Insightful

    In addition to employing programmers, 'the savings [to consumers] in the United States alone could easily exceed the cost of supporting software development.'"

    Sure, but what about Microsoft, or Adobe, or various other companies that make software? Won't this be competing directly with them? It's bad enough that they have to compete with FOSS as is, but FOSS supercharged with two billion government dollars?

    Surely the sensible thing to do would be to give the money directly to Microsoft and Adobe and the like. You wouldn't bail out the auto industry by giving money to custom car builders, nor the banking industry by giving money to loan sharks.

    Kidding, of course. But I'll bet there will be corporations that won't be thrilled by this.

    --
    Loose lips lose spit.
    1. Re:What about Microsoft? by kaizokuace · · Score: 4, Insightful

      Seems to me corporate America is all for the free market economy except when it's not to their favor.

      Since when does corporate America follow some sort of ideology? It's in favor of business to never play fair. Being unfair is inherently to your advantage!

      --
      Balderdash!
  4. only if you create some decent criteria by PhantomHarlock · · Score: 3, Insightful

    How would you decide who gets the money? Would you need to demonstrate suitable skill in coding first? There should be some sort of filtering criteria so the money isn't thrown away, especially since you are redistributing other people's wealth.

    Perhaps some type of competition format for ideas would do best. Various private companies such as Google have done this, I believe.

  5. Re:Open Source by dj245 · · Score: 4, Insightful

    I'm not so sure I agree. When you build a bridge or a dam, you get something tangible that will be with you for 30+ years. Its there, and you can use it until it is demolished or replaced. The Brooklyn bridge, the Hoover Dam, etc have been with us for a very long time.

    When you write some software, the benefit is not so obvious over the long term. Things have a habit of being rewritten completely in relatively short intervals. How much of the code from Linux of even 15 years ago is in the current kernel? How much of AutoCAD 1.0 is in the current version? The code gets rewritten and forgotten. The programmers learn experience and gain skill, but that isn't something that we need stimulus packages for. If we're going to spend unfathomable amounts of MY money, lets have something to show for it that will still be useful in 80 years.

    --
    Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
  6. Re:Open Source by El_Muerte_TDS · · Score: 5, Insightful

    And that is exactly one of the benefits of Open Source/Free Software. You have the ability to change the software so that it will keep working in 15 years. With closed source/non-free software you have to rely on the software provider to keep their software updated while the runtime environment changed.

    It doesn't matter if code is rewritten or forgotten. When you have the source you can always see it. If AutoCAD 1.0 does exactly what you need, then why would you want to get 2.0 or 23.0? Unless it's FLOSS, you simply have to, because 1.0 simply might not run on the replacement hardware. Software does not break because of old-age, unlike hardware.

  7. Re:Open Source by dvice_null · · Score: 4, Insightful

    Just because you have to rewrite something doesn't mean that it doesn't help you. E.g. I recently joined an open source project which was very good because of what it did, but very poor because of its code structure. So I did a massive refactoring for it, making changes to hundreds if not thousands of lines. This took about an week, but it would have taken much more if I had written the application from the scratch.

  8. Re:Open Source by justinlee37 · · Score: 4, Insightful

    lets have something to show for it that will still be useful in 80 years.

    You're neglecting present value theory and opportunity cost; if we can save people money by developing free software over the next 10 years, the money they saved and spent elsewhere will improve other parts of the economy, which could have longer-term benefits.

    Also, is ANYTHING still useful in 80 years? Cars, buildings, roads, all that stuff wears out and becomes obsolete after a long enough time.

  9. Re:Open Source by turbidostato · · Score: 4, Insightful

    "When you write some software [...] Things have a habit of being rewritten completely in relatively short intervals."

    When you write *privative* software, you meant. Privative software suffers from the "broken glass" problem: for the most part is redo what already was done, both among competing products and between versions of the same product (well, version shifting is more to add featuritis and in cases of dominant products both for vendor lock-in and to maintain third party/competing products at a distance). This is not usually the way with open source software.

    "How much of the code from Linux of even 15 years ago is in the current kernel?"

    Taking into account Linux is barely 15 y.o. not much, true. But there's indeed quite a lot of code that has been there for long years. And even then, you forget that even shifting code it there to allow third parties to cooperate.

    "How much of AutoCAD 1.0 is in the current version?"

    Privative software: at the very least one of the major differences among versions is changing file formats for lock-in and disallow competing products to stay at path. Not much benefit on this work for the users.

    "The code gets rewritten and forgotten."

    It is not. Minix is still used as a learning platform as it is with older versions of *BSDs. I bet that code from ls cp or a lot of basic Unix-related commands haven't changed for ages.

    "If we're going to spend unfathomable amounts of MY money, lets have something to show for it that will still be useful in 80 years."

    Nobody can forecast the future but, certainly, you will optimize your bets if such a software is open sourced.

  10. Re:This is a bad idea by dangitman · · Score: 4, Insightful

    there's another quarter million MCSEs out of work.

    Simple solution: Soylent Green.

    --
    ... and then they built the supercollider.
  11. Microsoft will NEVER let that happen by erroneus · · Score: 4, Insightful

    There are no limits to what Microsoft, companies like Microsoft and their supporters would do to prevent that from happening.

    I have often wondered what sort of chaos would ensue if the plight of the "big 3 auto" were shared by Microsoft. It could upset employment at all levels of the economy. The ripples of the effect would be global. But in the end, I believe people and business would simply work around the issue if Microsoft simply failed and ceased to be. I think that perhaps the overall effect would be somewhere between three and four times as annoying as the latest daylight savings time changes. But people would move off of Microsoft Windows because the platform would just be too unsafe to work with.

    One way or another, people will eventually find that Microsoft isn't as "necessary" as they currently believe. Ultimately, when you break down computing and data processing to what needs they serve, it is easy to see that just about anything will do. The biggest problem is getting over people's natural fear of the unknown. Microsoft is all that most people know and so anything else is to be feared and avoided. But when shoved into the water, people will swim.

    Publicly funded F/OSS software projects would show the world that Microsoft isn't as necessary as they currently believe. Microsoft would pull no stops in preventing that from happening and I would even go so far as to say they would collectively hold the value of no single life above the interests of their business and business model.

  12. Bad example. What about the NIH? by Kupfernigk · · Score: 3, Insightful
    The NIH has driven all the drug companies and medical equipment companies out of business, hasn't it?

    Your example is bad. A supermarket is a consumer, not a producer. Now let me give you a real example, one I know something about.

    Years ago, there were many companies making marine engines. They were typically very bespoke and very expensive, and though they were very solidly built they were not terribly reliable. Then what happened was consolidation. Volume manufacturers appeared who produced limited ranges of engines that were much cheaper and, because R&D was amortised over high volume, much more reliable - companies like Kubota, Mitsubishi, Mercedes, Volvo. So the small manufacturers went bust, didn't they?

    Of course not. They simply absorbed the high volume engines into their product range. They took the core engines and used their marinising parts to provide a range of options for different applications, which they could now do more cheaply. They focussed on services and added value. Because they did not have to have lots of capital tied up in core engine production, they had lower financial risk. The reduction in cost is one reason for the explosion in the powerboat market.

    Same thing for software. Most small companies do not run by making core services. They survive on supplying special markets. Common core software allows them to focus their expertise on the added value in those markets. Because the vertical market software now has a lower cost basis, more people can afford it. The market grows. The company has a more diversified customer base so it has to do more customisation. This absorbs the resources that were once trying to maintain the invisible code.

    --
    From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
  13. Re:Open Source by Thanshin · · Score: 4, Insightful

    Also, is ANYTHING still useful in 80 years?

    Investments in education.

  14. Re:Open Source by raju1kabir · · Score: 5, Insightful

    I'm not so sure I agree. When you build a bridge or a dam, you get something tangible that will be with you for 30+ years. Its there, and you can use it until it is demolished or replaced. The Brooklyn bridge, the Hoover Dam, etc have been with us for a very long time.

    The roadbed and surfacing on the Brooklyn Bridge have been replaced countless times. It has been reconfigured to deal with a changing balance between road, rail, cycle, and pedestrian traffic. It has been repainted and seen the replacement of untold bolts, cables, struts, stanchions, gimlets, and both left and right phalanges.

    In the same way, software is gradually upgraded and remodeled and renovated over the years, but much of the underlying code that powers what we do on our computers today is still more or less verbatim from decades ago.

    So I really don't see the difference you're implying.

    --
    "Patriotism is your conviction that this country is superior to all other countries because you were born in it." -- GBS
  15. Re:Open Source is Socialism by meringuoid · · Score: 4, Insightful

    As a matter of fact I think open source is a triumph of Socialism. Hitherto, compilers cost a fortune, UNIX distributions even more. You had to buy such software from a capitalist - or more likely, be employed by a capitalist who could afford it. The GNU project put the means of production in the hands of the workers, allowing us to enjoy the fruits of our labour ourselves.

    --
    Real Daleks don't climb stairs - they level the building.
  16. As if the New Deal was successful, it wasn't by Shivetya · · Score: 3, Insightful

    Why all these comparisons to the New Deal? It didn't work. If it wasn't for WW2 we would never have gotten out of it. All we got in eight years was government debt and unemployment did not change. Sorry but this use it for FOSS is simply pie in the sky type crap. Why? Because those who actually implement it will not have any relation to those in the community. It will simply route money to schools, after all they can do this just fine and they need the money as well as the computers.

    No, instead of spending the money by the government why not let those who actually earn it decide what to do with it? Give all those who pay income tax a tax holiday. This will do two things, one is to allow the working American to spend his money where he wants thereby focusing the bailout on businesses that matter to the earners as show them just how much a burden the government truly is.

    --
    * Winners compare their achievements to their goals, losers compare theirs to that of others.
    1. Re:As if the New Deal was successful, it wasn't by Nietz2000 · · Score: 5, Insightful

      WW2 was the New Deal on steroids. The Government quite literally quadrupled spending and took full control of the economy, even to the point of regulating wages and dictating output. If you want to argue WW2 pulled the US out of the Depression, then you're just saying the New Deal was too small.

      The GI Bill created the most educated workforce on the planet and paid for 60% of all University graduates. Poverty among the elderly was reduced by 80%. Home ownership and the middle class was created in just a few years from the New Deal. It was a huge success.

      You're also ignoring the rest of the world. As each country implemented Keynesian policies, their economies quickly recovered. The US was just one of the last to join the party.

      There are no mainstream free-market Austrian economists anymore... they died out. Even Bush's economists are New-Deal Keynesians.

  17. Re:Possible Concerns by Nietz2000 · · Score: 4, Insightful

    The US Government has been the primary investor in general research since WW2 and I would not consider it wasteful at all.

    They even pick the winners and losers. They allow the universities and academies to publish to the public and allocate spending where it will be most beneficial.

    The Government has done this because private corporations are not willing to pay for something you just give away free to the public, especially if that can be copied indefinitely (like research or software). Sure, it will grow the overall economy but the private company will be at a disadvantage.

    In this case, Government quite often is more efficient at growing productivity because everyone gets to use it. Private research is often secret or even intentionally restrictive.

  18. Re:Open Source by jimicus · · Score: 4, Insightful

    Software does not break because of old-age, unlike hardware.

    Addendum: In order for this to work, you need source-level access to the entire software stack from the OS upwards.

  19. Re:Open Source by Kjella · · Score: 4, Insightful

    It doesn't matter if code is rewritten or forgotten. When you have the source you can always see it. If AutoCAD 1.0 does exactly what you need, then why would you want to get 2.0 or 23.0? Unless it's FLOSS, you simply have to, because 1.0 simply might not run on the replacement hardware. Software does not break because of old-age, unlike hardware.

    Try getting any piece of old software to run and you know it's a big pain. Hardware changes, APIs change, ABIs change, formats of choice change, they don't respect modern UI conventions, operating system hints, the anicent IPC means it doesn't talk to anything else and so on. FLOSS doesn't magically make it work on more hardware/environments, unless you're running version 2.0 or 23.0 of the open source software too. Yes, you have to pay the software provider for new versions but you're somehow assuming the FLOSS fairy would deliver updated code, but that work has to come from somewhere too.

    The real advantage to open source isn't that there's less maintenance required, it's that without competiton there's no reason for a business not to gauge as much as possible out of their customers. Open source effectively caps what you can charge for a closed source "light" version, what you can charge for a closed source software or workflow because there's the option to go with open source, deal with or fix its limitations. Ideally, the most socially effective solution is typically to write something once - duplication is waste. Except we all know that is a real shitty solution if you got a selfish corporation gouging you for it.

    A few open source implementations probably do more than hundred different attempts at making closed source clones to increase overall efficiency. Of course it'll suck for those people that are made superfluous but people are always needed elsewhere. Sure there's practical issues of unemployment and obsolete skillsets but ultimately we'll never have enough productivity. There'll never be a situation where we fundamentally don't need anyone anywhere. If we look a little past the current downturn, during the next 20-40 years most of the western world will have population stagnation or even retraction. The workforce will be less in comparison to the population than ever before. We *are* going to need every hour of work, better spent elsewhere than trying to clone some software that open source could have done once.

    --
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  20. Re:This is a bad idea by Bert64 · · Score: 3, Insightful

    But you can actually *see* the open source projects that die, and potentially make use of them in the future, and if you were already using them you can continue to do so.

    What about all the commercial projects that die, many of which never even reached the release stage.

    One such example, is PostPath (http://www.postpath.com) which used to be advertised frequently on slashdot, they used to make a mail server which was a drop in replacement for ms exchange, while outperforming it by a huge margin... We had their demo version and very much liked it, it would have freed us from several niggles we have with exchange 2003, while costing significantly less than 2007 would while not necessarily fixing the issues we have.
    However, PostPath were bought out by Cisco... Their existing mail server product is no longer available, and future versions won't be developed... The company will in the future, as part of cisco, be doing mail as a service - which is completely unacceptable for us, as we need to maintain control over our own email for legal (not to mention performance - don't want large attachments going over our slow wan link) reasons. So now what? Our planned migration had to be cancelled, had we already completed it we would have been stuck with an ageing product that would never be updated....

    If it had been open source and abandoned on sourceforge, then not only would we still be able to acquire it despite the original developers having lost interest, but there would be a chance of new developers picking up the project.

    If i want to create an updated version of a dead sourceforge project, i can use the existing code as a base... If i want to create a new version of a dead closed source project i have to start from scratch, and may have to spend significant time reverse engineering binary formats or such.

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  21. Re:Open Source by El_Muerte_TDS · · Score: 5, Insightful

    I wasn't implying it was easy, just that it is possible. And even when you have to recreate the software because so much has changed, it is easier to do so when you can see how it was done in the first place (and maybe even reuse various parts that are still compatible).

    With closed/non-free software you simply do not have that option. A way out, no matter how difficult, is always better than no way out.

  22. Re:2 billion? by smchris · · Score: 5, Insightful

    Ah, a fellow cynic. Some people just don't appreciate good sarcasm.

    Yes, I could see Congressmen who dine regularly with their Microsoft lobbyist giving speeches about how excessive $2 billion would be for "hobbyists". While the (foreign) Citibank got -- $300 billion, right? To produce what?

    This whole idea shows way too much pragmatic sense for 21st century America.

  23. Re:Open Source by jabjoe · · Score: 5, Insightful

    Addendum: In order for this to work, you need source-level access to the entire software stack from the OS upwards.

    Er no. Once you have the source of the app, you can port it to different APIs, or make a wrapper to replace old APIs it uses. Of course if the APIs aren't open source, you have to rely on the documentation, if there is no documentation then you have to work on deduction.

    It's better if everything is open, of course, but it doesn't all fall down if one bit isn't. Because the rest is open, you can always replace the bit that isn't.

  24. The New Deal failed. by tjstork · · Score: 5, Insightful

    WW2 was the New Deal on steroids.

    WW2 was certainly a huge capital outlay, and brought people to work, but let's not forget some basic things:

    a. WW2 took place 9 years after Roosevelt was elected. He had nearly a decade of New Deal to end the Depression and really didn't accomplish anything.

    b. We are already in a war, two of them actually, and the economy still sucks. IF we wanted to raise the military budget to 6T a year, we would have WWII levels of spending on the military, and, what would that accomplish?

    c. The prosperity of US postwar had more to do with the total destruction of American industrial rivals. Even GB, our ally, was so bankrupted by the war that she hit the skids. Continental Europe and Japan were destroyed, and the damage caused to Russia by the German invasion was so severe it doomed Russia to be a third world economy for decades afterwards. USA economy has been in relative decline as each of these players rebuilt and retooled.

    You're also ignoring the rest of the world. As each country implemented Keynesian policies, their economies quickly recovered

    IT was Keynesian policies they implemented, it was classic mercantilism, protecting their own industries as much as possible to let them rebuild, while selling their goods to the USA. This dysfunctional world economy has persisted for 60 years. First it depleted USA gold reserves so that in the 1970s the USA floated the dollar. Then, it depleted USA dollars so that in the 1980s the USA began borrowing, and then, when Bush finally pulls the plug on the whole damned thing by lowering the dollar, we're left with an economy that is reflective of what it really is, a large economic power with a bunch of smaller, but capable, economic powers, and a bunch of goods and a so-called free trading system that is actually irrationally priced due to the junkie's desire to keep the postwar ball rolling.

    No more.

    Americans aren't going to tolerate the economic dislocation and fiscal ruin caused by all the imports, and finally, you are going to have to see USA's trading partners actually construct meaningful domestic demand on their end, while at the same time the USA will have to build more of what it needs and stop treating the developing world as so much indentured servants.

    --
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  25. Re:The Limbaughs and O'Reillys of the world... by lwsimon · · Score: 3, Insightful

    US Presidents aren't "rulers."

    What the hell has happened to this country?

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  26. Re:Open Source by quanticle · · Score: 3, Insightful

    The expensive part of buildings, roads, railways, bridges etc is the construction (and land), if they're useful maintaining them isn't a problem.

    Maybe maintenance isn't an issue for your stone bridge. But, for lots of bigger bridges (tunnels, roads, etc.), maintenance costs are certainly significant. Here in the US, we have many bridges and roads that have deteriorated to the point where they are barely serviceable, because cities, states, and the federal government focused on building flashy new structures rather than on maintaining the ones they already have.

    In fact, this is one of the concerns I have about Obama's plan for massive fiscal stimulus. I worry that the federal government will build even more infrastructure, further increasing an already punishingly high maintenance debt.

    --
    We all know what to do, but we don't know how to get re-elected once we have done it
  27. Re:Open Source by TheSync · · Score: 3, Insightful

    On the other hand, John Maynard Keynes was right. Recessions are caused by too little spending. Right now, consumers are (on average) overextended, so cannot increase spending. Businesses see no economic returns on additional spending. So they can't increase spending. That leaves government.

    Or we could wait until the economy re-organizes itself (less finance and builiding, more health care & flying cars or whatever works) so that the economy can go back to creating wealth, enabling spending. By not spending tax dollars during that time, we save wasting wealth (current taxes or future taxes to pay down debt) on government boondoggles.

    The economy can best re-organize when there are few inappropriate regulations to slow down the re-organization.

    If you really are worried about short-term effects (like unemployment rises) during this period of re-organization, then perhaps reduce the tax on employment (payroll taxes, for example) and you can even offset it with a tax on something we don't want (such as carbon).

    I do agree that if we had 10% unemployment for more than a year, it would hurt the human capital stock of the US. Longer term unemployment is linked to significantly reduced future personal earnings.