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Bill Gates Argues 'Supply and Demand' Doesn't Apply To Software (gatesnotes.com)
"Not enough people are paying attention to this economic trend," writes Bill Gates, challenging the widespread use of forecasts and policies based on a "supply and demand" economic model. An anonymous reader quotes the Gates Notes blog:
Software doesn't work like this. Microsoft might spend a lot of money to develop the first unit of a new program, but every unit after that is virtually free to produce. Unlike the goods that powered our economy in the past, software is an intangible asset. And software isn't the only example: data, insurance, e-books, even movies work in similar ways.
The portion of the world's economy that doesn't fit the old model just keeps getting larger. That has major implications for everything from tax law to economic policy to which cities thrive and which cities fall behind, but in general, the rules that govern the economy haven't kept up. This is one of the biggest trends in the global economy that isn't getting enough attention. If you want to understand why this matters, the brilliant new book Capitalism Without Capital by Jonathan Haskel and Stian Westlake is about as good an explanation as I've seen.... They don't act like there's something evil about the trend or prescribe hard policy solutions. Instead they take the time to convince you why this transition is important and offer broad ideas about what countries can do to keep up in a world where the "Ec 10" supply and demand chart is increasingly irrelevant.
"What the book reinforced for me is that lawmakers need to adjust their economic policymaking to reflect these new realities," Gates writes, adding "a lot has changed since the 1980s. It's time the way we think about the economy does, too."
The portion of the world's economy that doesn't fit the old model just keeps getting larger. That has major implications for everything from tax law to economic policy to which cities thrive and which cities fall behind, but in general, the rules that govern the economy haven't kept up. This is one of the biggest trends in the global economy that isn't getting enough attention. If you want to understand why this matters, the brilliant new book Capitalism Without Capital by Jonathan Haskel and Stian Westlake is about as good an explanation as I've seen.... They don't act like there's something evil about the trend or prescribe hard policy solutions. Instead they take the time to convince you why this transition is important and offer broad ideas about what countries can do to keep up in a world where the "Ec 10" supply and demand chart is increasingly irrelevant.
"What the book reinforced for me is that lawmakers need to adjust their economic policymaking to reflect these new realities," Gates writes, adding "a lot has changed since the 1980s. It's time the way we think about the economy does, too."
Dumb maintenance windows, DEV always messing things up. I WANT TO GO TO SLEEP!
The problem is that companies are not sharing the cost benefits of technology, period. Case in point, eBooks are less expensive to produce, yet they usually cost more than the real book.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Every unit you sell incurs some cost. There's always going to be someone how can't figure out how to install it, or use some feature.
And bugs are discovered, for which there will probably have to be fixes.
The old days of selling shrink wrap may be mostly gone, but those download servers don't set themselves up, and they don't run on air.
Unless it's a hobby effort, development and debugging needs to be supported in some manner. Most video games wouldn't get made without a budget and payroll. We've seen studios close when the games don't sell as anticipated.
In human society since the dawn of time, the way to get ahead has been to tell people what they want to hear.
People want to hear that everyone can get along, because this means that no individual human has to trouble himself or herself with the difficult task of maintaining civilization. It just runs itself!
For everyone to get along, you need sharing of power, wealth, and social status. These correspond to systems like democracy, socialism, and pluralism. Together these form a notion called utilitarianism, or the idea that whatever most people think will make them happy is the best option.
Gates is preaching the idea that, because units one through infinity cost very little, the cost of unit zero can be ignored. This allows him to argue for a subsidy state to produce unit zero, and then to distribute units at low or no cost.
His idea is correct for him in that it will make him more popular; it is incorrect in reality, as the numerous carcasses of failed civilizations littering the globe attest. He has come up with a Burning Man, quinoa-eating, avocado-friendly version of Venezuela and nothing more.
Alternative Right.
Using his wealth to control government to divert more of our public dollars to his own pocket. He's a fucking asshole who should be publicly shamed until he dies or retires.
Certainly applied when the iPhone 3 was released and every body on every block of every town tried to activate their software at the same time.
... he's been scamming us all along then?
Your mom worships backdoor socialism every night. You're not a sociologist or historian, you're a professional fellator of Vladimir Putin. When Gates has an idea you can comprehend he'll tell you nazi INCEL faggots all about it, he promises.
Enjoy watching Trump hang for treason meanwhile, snowflake cuck Jr. Mccain is going to punk that fat bitch in the afterlife for eternity, you know that. Lol.
Looks like your faggot alt-brother got arrested again, looks serious now - https://www.huffingtonpost.com/entry/texas-man-accused-of-shooting-female-drivers-believing-only-men-should-drive_us_5b81c408e4b07295151372ee
A commodity is a product that sells for pretty much the marginal cost to produce another copy of that product.
And the marginal cost to product another copy of a software product is pretty much zero. Kinda explains Linux, doesn't it?
Along with how Mr. Bill devised likely-illegal barriers to entry in the desktop software market: "DOS ain't done until Lotus won't run!" Ask Thomas Penfield Jackson about that...
You just explained what we obviously knew for at the very least 120 years, since it's basically the reason behind the Berne Convention.
Did you just run out of stuff to say, or what's the motivation behind it?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
True. Not to mention the ultimate zero-sum game, which is choice. Some software designers make sensible choices; if that does not work for you, your only option is to code up your own package. This means that supply and demand are measured on the level of what fits the need for a given solution as well.
Alternative Right.
Prices are controlled in many cases by the whims of the copyright owners. If Microsoft says you have to pay them $200 (hypothetically) for a (legal) copy of Windows or Office, that is so. But if the difference to alternatives gets too large, people might accept the effort to switch to something else. A case of price elastic demand, quite well known in traditional economy.
Some anecdotal evidence about myself:
I have switched to Libre office myself for private use, partly for financial reasons, partly for political ones (I really don't want to feed Microsoft money). Also planning to use Linux when support for Win7 runs out.
But if Microsoft were to drop the price of Windows to $20, laziness might win out and keep me on Windows. On Libre Office they have lost me permanently, as I already have put in that effort to get familiar with the new tool. Wasn't much effort either, only inserting images into documents is still a bit cumbersome and annoying.
Where Bill Gates is right are those cases where a satisfactory free alternative already exists and people can adopt it effortlessly. In those cases, the opportunity to make money from the main product is gone. Perhaps you can still earn money from add-ons to the free product.
C - the footgun of programming languages
We cry out for Windows 7, but we get Spydows 10 instead.
HL3
With software, most of the money is in services. If you haven't figured that out by now...
Poor people have the same right as rich people to give a lawyer a million dollars to get government permission to raise capital. The rich bribed a lot of politicians to get this system emplaced.
Microsoft (+bill gates) got rich by indecent behavior, by lying and such. There products got better of course over years. Now bill gates has a foundation, like all rich people, to pay less taxes, not for the betterment of humankind...
That's the same reason that big pharma uses to overcharge its customers. It is nothing new, nor did Mr Gates have some magical revelation. He is just now noticing what the pharma industry (and others) have known for decades.
You still have to maintain and update software, just like you have to maintain and update the canal. You have "free" alternatives (Linux/rounding the tip of South America).
Just curious, but it seems like Gates has rediscovered Club Goods -- non-rivalrous but excludable, so they are artificially scarce. (Canals aren't strictly non-rivalrous, I know.)
Copyrighted software, as well as copyright in general, is a state-granted monopoly of artificial scarcity. It's completely anti-freedom. Being granted by the state violates economic liberalism, a monopoly violates free competition and artificial scarcity violates supply and demand. The only reason it is possible for companies like Microsoft to be so wealthy while being actively anti-consumer, is because of the super-privilege of "Intellectual Property"; same for video game publishers that shit on the head of its own customers.
Free software is the exact opposite. It's funny that, despite the adversities, and the unfair competition with software thugs like MS, the Free Software movement still managed to become huge. Linux is the most glaring example. And of course you can get rich off it. Look at Ubuntu. Obviously no one will get as rich as Bill Gates, because that is impossible to replicate in current times anyway, but everyone would have much better odds at trying to make it, because you wouldn't have to fight shitty proprietary lock-ins, shielded by the power of law and the menace of the State.
I'm okay with this monopoly (copyright or author's rights) for creative works like music, books, etc. Art in general, although I will add that we DO need a reform on copyright laws, because "public domain works" is almost becoming a relic of the past. But for software? Thanks, but no thanks. It has been a burden on mankind. No, we do NOT need it. A free economy can work just fine with free software.
He seems to have forgotten that the whole industry was getting very excited about software as either a service or a subscription because it was not making enough money from single-time sales because of support costs, usually patching the various security holes and glitches that the bureaucracy and its low-cost code stooges overlooked.
Alternative Right.
Microsoft might spend a lot of money to develop the first unit of a new program, but every unit after that is virtually free to produce
Although that doesn't mean there are no costs.
There are support costs, distribution costs, the technical deficit cost from bugs, patches, security holes, backwards compatibility and future integration-ability.
So while there may not be customer supply-and-demand, there is certainly a cost to the supply (and demand) of other factors. Not the least is finding and keeping the talent to support all this stuff through its lifetime.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
This may kill the competition, but the free market likes knowledge of prices.
The MS HUP (Home User Program) makes Office and many other product free / low cost ($9.95) for employees and associates / members of "groups".
You pretty much never pay for the stuff for home use again.
https://www.microsofthup.com/hupus/en-US/hup
This is how M$ responded when they had to tackle piracy.
They know damn well that piracy was how they got the product in the hands of users who then only had a preference / competence with MS products.
Everyone contributes what they want, everyone takes what they need and the world improves over it.
You can only have that with digital goods that can be multiplied instantaniously with basically zero cost.
That's why proprietary software always dies out in the long run and loses over to FOSS eventually.
We suffer more in our imagination than in reality. - Seneca
Bill Gates doesn't understand economics. There have always been recurring and non-recurring costs to produce a thing. He thinks that the economic basics have changed just because the recurring cost is now very small compared to the non-recurring costs. The only economic difference is that the supply curve looks much different; the law of supply and demand remains as true as it ever was.
Many things in software becoming pay as you go models. But I am not sure pay as you go is really benefiting the end user. Take Office for example, not everyone needs a constantly updating Office suite to be productive. Many use older versions just fine and only paid for a one time license. Sometimes, you may not want the changes that upgrades bring in a subscriber version. I don't see Gates as a visionary he is more trying to sell a profitable line of goods for Microsoft for the future.
See subject: Your MASSIVE FAIL in this life is you're nothing more than a chattering little do-nothing "ne'er-do-well" online & you know it...
* Is that the best your "phantasyland FAKE NAME" (for your fake lie of a so-called 'life') can manage?
When a FAKE NAME do nothing like YOU does better than I have? Then talk (you're all talk & no action)...
You can't help you're an immature little BUTTHURT no-mind, lol! I blew you away in TONS OF PLACES and easily dust your no-mind bullshit blatherings.
APK
P.S.=> The TRUE PRICE of your UNIDENTIFIABLE FAKE NAME do-nothing selves like you that I can ALWAYS CASH IN ON (lol) is that I can use FACT/TRUTH on them to SHATTER their all TOO fragile delusional egos that they actually know A DAMN THING in computing, lol... apk
Right now, Windows 10 Pro costs around 120 Euros in Germany (System Builder which is legal to unbundle here, no dubious ESD key). That's around $140.
I am neither a student nor employed in a company that has something like a HUP going, so for me it would be the full price of the SB edition. It seems that Microsoft think they have piracy mostly under control and Linux is not a threat.
For now, they might even be right about the latter. Linux is running on a lot servers, embedded and mobile devices (low level basis of Android), but on the desktop the market share remains small. The desktop and part of the server market happens to be where Microsoft earns most of its money.
C - the footgun of programming languages
Ethics Violation via - How to become wealthy is make people need you - bill gates.
How did he do that? He cheated the users by not providing the three primary user interfaces and yelling piracy as well as getting the rest of the software industry to do the same with the money he was making with the cheat, they wanted to make the money gobs too.
Cheat the users and now the AI industry needs the users but the users don't care and they don't even know it and this extends to a software industry slowly crashing like how to cook a frog, turn up the heat slow, but here its crashing slow, and they don't even know it too..
http://3seas.org/EAD-RFI-respo... http://3seas.org/ for a clue and verification.
Ethics Violation via - How to become wealthy is make people need you - bill gates.
How did he do that? He cheated the users by not providing the three primary user interfaces and yelling piracy as well as getting the rest of the software industry to do the same with the money he was making with the cheat, they wanted to make the money gobs too.
Cheat the users and now the AI industry needs the users but the users don't care and they don't even know it and this extends to a software industry slowly crashing like how to cook a frog, turn up the heat slow, but here its crashing slow, and they don't even know it too..
http://3seas.org/EAD-RFI-respo... making it obvious the long-running ethics violation - Can AI ever become ethical. NOT while built on a ethics violation foundation.
So what is going on now to promote AI? The struggle to figure out what abstract sequences to use in marketing to bait and switch get the general public to buy while forcing AI on the consumers/users where ever they can, and behind their backs.
If there is anything simple and accurate to say about the tech industry it is this: It is a very self-serving industry that will blame its customers for its failures. It is why software licenses are in essence, use at your own risk, but pay us over and over while we sell you a way to better compete until we sell to everyone then we will sell you the next version - rinse and repeat.
The proven BS of an industry that is heading to be the next government of the people. From the Churchs of various types of governance to the government of governance of various types to the coming AI directed governance of the people and all have in common corruption.
see/read/do http://3seas.org/ for a clue and verification.
Obviously software doesn't follow the old rules of supply and demand. Going back to the invention of copyright, the idea was to allow authors to create artificial scarcity of something that could be easily replicated. It was to take a thing of virtually unlimited supply, and shoehorn it into the model of supply and demand.
And though it's not really a "software" problem, the copyright system stops working when the cost of replication goes from "extremely cheap" to "virtually free". We've tried to keep the shoehorn by inventing DRM and making new laws, but it's not really working.
Worse, it's detrimental to society. The indefinite extension of copyright, combined with DRM and incompatibilities, means that we're going to lose the history of our intellectual works. You can still look at a 500 year old painting or read a 500 year old book, but it's not clear whether you'll be able to try current software or play current video games 500 years from now. It's a problem that, unfortunately, it doesn't seem to be a problem that people are considering when they create DRM or modify copyright law.
Writing here about a software industry slow crash and a hint of it actually happens. The second post (reply to myself) was what I wrote for my initial post. Something changed it. Let's call it "Overcomplexifabulication."
Demand is obviously still relevant. Every marketing person at Microsoft is trying to optimize long run Price times Quantity.
Supply is trickier. You could make an argument that because the marginal cost of each additional unit sold is (close to) zero, so we can ignore supply constraints to the cost curve. (In some (but not many) industries, cost goes up with supply due to inefficient plants etc.)
But this is only going to be relevant to existing or very large products. Microsoft Office is sold to every person on the planet, so the cost of production is less relevant to ability to produce the product than a niche product. For example, an app to calculate drug quantities/interactions for pain management physicians has a target market of only a few ten thousand globally. The pricing needs to cover development, and in this case, cost of production/supply is very relevant because of the small quantity sold.
As other posters noted, support costs also scale with supply.
Sorry Gates, you're doing great things in a few parts of the world, but you're pullin' some Fox style half-truths on this one!
The price doesn't go down because eBooks represent a production/distribution innovation by book publishers and distributors.
Not quite. The price does not go down (or ve goes up) because people are willing to pay more for the convenience of being instantly able to purchase any book they want. Prices for things are set by what the market will bear, not how much it cost to produce. Successful products are ones where the price is a lot higher than the cost to produce.
Competition is what normally prevents the gap between production costs and selling price remaining large but for ebooks each book has its own monopoly controlled by a large publisher so there is little to no competition...which is one of the many reasons why copyright needs a bit of a rethink/rebalance in our modern age.
And then you click the Amazon link and you see these prices:
Capitalism without Capital: The Rise of the Intangible Economy
Hardcover $29.95 (physical copy)
Paperback $18.95 (physical copy)
Kindle $23.79 (digital copy)
#DeleteFacebook
Maybe if a child explained economics to him this is correct. But the expense model for software is the same as anything else. a+b*x a simple linear model. Granted b is 0 or near 0 for the product itself. But like any product you need to estimate a price high enough to cover a. The only major diffrences are. You still need your engineers after the product goes live. It's not a temp gig, people expect full support, and updates. And you can launch before the product is complete.
who became ungodly rich using that economic model. Let him give away all the money he now believes would be excess using his new philosophy.
Hypocrite.
...back in the 80's when he started the free software foundation.
I think the best answer he came up with went something like this...
When Star-Trek-like devices come into existence that can manifest objects from basic atomic raw materials and the ability to produce atomic raw inputs is trivial; then, what of economy? More simply put, why keep buying apples from the orchard, when one apple is enough to start your own (assuming your need for apples was important enough to expend the energy to maintain an apple tree or an orchard).
Moving pictures, Pictures, Art, Sound, Music, Literature, Software. None of these things can sustain life; yet, they with out them, would life really be lived? One would hope even the birds and the whales understand beauty, song.
What would life be like if all these things were not PART of ANY, economy? What if we concerned ourselves economically with that which is required for all these things to be freely available? What if the movies I created did not earn me any money; but, my reward was enriching the lives of those who enjoyed them, or at the least, enjoyed a degree of inflated ego knowing how many others liked my movies, pictures, art, music, sound, literature, etc...
I don't understand how such an economy would be possible; but, I don't think it's really that far from a possibility. In fact. If such an economy were the standard, I think our standard of living would drastically increase. And, in addition, the means to produce such works, and the time to attend to them would probably increase as well.
"Production" is the problem.
Right now, with very little monetary over-head, anyone can produce: Moving Pictures, Pictures, Sound, Music, Art, Literature
To varying degrees they all do require certain production costs in that they often require the works of multiple people to be incorporated into a single whole. However; the cost of reproduction, at this point, is almost zero.
When farmers got ahold of mechanical farming tools, it put a lot of would-be farmhands out of work. What we are seeing now, to a large degree, is an ever increasing attempt at using legislation to prevent progress. It would be like if the people who were inventing tractors were dealing with legislation that was being passed to prevent their tractors from being used; but, they didn't. The people in power (the farm owners) just found a way better way to do farming.
Any scarcity of Moving Pictures, Pictures, Sound, Music, Literature, and software is an artificial scarcity created with law. Therefore, the best investment for any Producers of these kinds of works is to invest in the means to enforce law. There is probably a mathmatical function that could be derived that could give you the amount of money one should invest in law enforcement combined with the needed investiture to create the work; but...
Losing your job to the tractor is probably not fun; but, to gain freedom from having to do such mundane work, hopefully, is the fertile breeding ground for the type of creativity and hopefully freedom in general and in creativity, our global civilization may be lacking in.
Our current economic model does not bare out well for sustaining free cultural works. Certain types of cultural works require very specific skill-sets and even minds themselves that just aren't accessible to the average working Josephine. If I want to create a free culture major motion picture, the very first thing I would need is a very large injection of Capital. I could try to raise the capital ahead of time like a go-fund me; but, this model does not always play out. If all the money I wanted from making the movie comes to me before I make the movie; why not just bow out when the money arrives. The movie was just a means for me to get my money. Or perhaps, I do actually want to make the movie to make the movie as a free cultural w
And now he understands this?
Customer support for a product means that every unit you sell may very well cost you money.
it's = it is
it's != its
Yes, and this "a lot of money to develop the first unit" is what is risky and what capitalists actually invest in.
But the premise is false too, because much of the software industry is a service industry, meaning that after the initial sale, there is support and maintenance. This may be a foreign concept to Microsoft, but it is a business necessity to other software companies.
And let's not kid ourselves why Bill Gates is starting to hate the market: it's kicking his ass and destroying the little monopoly he thought he had locked up in perpetuity. And like so many wannabe monopolists before him, he embraces unsavory ideologies and runs to government and politics for validation and help.
Demand for software is limited by the supply of physical devices available that can run it, so the old economic paradigm still applies
It doesn't matter if it's some factory where the production line starts at processing raw ore and ends where steel pipes come out, or a company that makes software or movies. Both require a large initial investment.
For now, they might even be right about the latter. Linux is running on a lot servers, embedded and mobile devices (low level basis of Android), but on the desktop the market share remains small. The desktop and part of the server market happens to be where Microsoft earns most of its money.
I think Linux is the only reason they still support windows 7 the little bit that they do. They realized cutting XP support didn't get everybody to switch to even 7, and there is testimony all over the internet and /. of people even putting their parents and other family on linux once windows 7 support ends. So I think that there is a chance we either see Windows 7 live on another decade, or they lose a decent chunk of their windows base to Linux and leave the other chunk vulnerable.
Why would Bill Gates hate the market? He's out of the market; he hasn't been head of Microsoft for decades. He has more money than he can possibly spend. As long as the economy doesn't crash to Argentina levels, his interest in it is purely intellectual.
Yes he was a monopolist. Yes he did scummy things to drive profits. That was then, this is now. His current opinions have little to do with his past policies.
i can understand a patent on a (physical) chip.
i can understand a patent on a (physical) RAM-design.
I can understand a patent on a (physical) connector type.
I can even understand a copy-right on (physical) book or (physical) DVD.
what i cannot understand is a patent (or copy-right) on a type of "ghostly-fume" wafting inside
a (maybe patentend) device that is 101% intendend to make ghostly copies of wafts of electron smoke.
"no, sir, this blue, vanilla flavoured electron fume you call "software" has been COPY-righted.
you may not willy-nilly make copies of it on your bought-and-a-paid-for universal copy machine!"
yada-yada, it makes no sense.
notein this context: universal copy machine = ghostly-fume-production-but-mostly-duplication-home-printing-factory -aka- home computer.
Uber, despite being a software company actually LOSES money. Why? I don't know. It's inexplicable to me. Ueber is a freaking app, and not really that complicated. It connects passengers, destinations, and drivers, and arranges payments between them. That's it!
They've written the app.. but the costs haven't come down. They should be making money hand over fist, but yet they're losing money hand over fist.
after the initial sale, there is support and maintenance. This may be a foreign concept to Microsoft
ZING!
Supply and demand never did apply to software or data. We've know that since their were displays and radios.
People that succeed, they figured that out and made that work for them.
It's our attention that is limited. That's why we're the product. There is a limited supply of our attention.
Those trying to sell, they 'demand' our attention. And they will pay for it.
Econ 101 still applies, it's just applies differently, it's runs deeper now, but it's the same rules.
DRM is a way to force scarcity. I'm glad not everyone believes in it.
It still does, just not to him any more.
Software is often more expensive than the hardware it runs on. What Gates missed is that every maker of a piece of proprietary software has a monopoly on that software. You can only get it from one source. Practically no software is interchangeable. You can buy concrete and t-shirts from many manufacturers, but you can only buy Microsoft Office from Microsoft. There are many other office suites, but none are drop-in replacements. They all come with significant differences that make switching to them expensive and impractical. That's why something that is replicated at almost zero cost can fetch the prices we see: They're monopoly prices. The important aspect isn't that software can be copied: Copyright law has made that irrelevant. The defining aspect is this: Software is not interchangeable. Software makers need to be regulated like the monopolies they are.
That should get enough cash for a guaranteed universal income!
Start with Google, Apple and Facebook!
Verizon, the list is endless of these huge monopolies with massive treasure chests of free data!
Well, at least it was free.
Thank you.
#DeleteFacebook
Because of the cost of reproduction/distribution (essentially zero), software will ALWAYS race to that cost. There will always be someone willing to take your idea and write it for cheaper, and sell it for cheaper. There is no "hard floor" in terms of materials or required infrastructure to make each copy. The barrier to entry is simply the cost of marketing - and the cost of sales/distribution is nearly zero.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
...that the price should be reduced for every copy sold ?
Nice to hear mr. Gates!
"Software doesn't work like this. Microsoft might spend a lot of money to develop the first unit of a new program, but every unit after that is virtually free to produce."
While that is true, there is a significant cost to supporting customers, the more customers, the higher the cost. Well, if you actually provide support, that is.
Seriously half the commenters are so wrapped up in virtue signalling that they didn't even bother to try and understand what has been said. Two points were made:
1)The marginal cost to software (and books, and movies and some financial services) is almost zero. Yes, there is some small cost to produce a physical copy and licensing might cost pennies. Patches are not a marginal cost, you create the patch whether you sell one or one million copies. Customer support is customer support it is separate and most software I use, I've never used any support for.
2) And this is the big point. The part of the economy that works on this new model of low or almost zero marginal cost is now significant.
2 is new and it has significant impact on how the economy will function and we need to change regulations and other behaviours because of this.
Yes of course supply and demand applies unless you have a monopoly.
It's why I use an opensource stack on Windows and when windows goes to a subscription based operating system where they are the owners, I'll go to linux 100%. I may go sooner than that actually.
I *OWN* my computer damn it.
So while I have a bright shiny Windows 2010 full Office install DVD, it sits unopened and i use Libreoffice writer, calc, etc. And Gimp. And Audacity, VLC.
Anyone who would like to recommend any other good open source cheap/free software let me know.
I don't mind paying a couple bucks but I want to *own* the thing. Not *rent* it.
Once you start renting it, they can raise the price any time they want. They can delete content (ala Amazon) anytime they want.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Rearranging matter consumes energy, but the information necessary to make useful arrangements is nearly free to copy. Even that's a bit of a simplification; it costs a few picowatts to copy or move a bit. But finding the useful arrangements is essentially NP-hard, so it has a fairly high cost.
Most of his wealth is in Microsoft stock still I believe.
Go to a shrink, man. You need help. It's not too late.
The marginal cost of manufacturing physical goods has dropped steadily for centuries. The cost to develop a new physical product has risen.
Pharmaceuticals and electronics are good examples of this. The cost to manufacture one pill or one microchip is tiny once the tooling has been bought and validated. The cost to design, build, and validate that tooling is very high.
This isn't new, at all.There are several ways to account for high up-front costs and low marginal cost.
That's why proprietary software always dies out in the long run and loses over to FOSS eventually.
"Always" is a strong word. When has this been the case in, for example, video games or streaming players for rented movies or income tax return calculation software? Those segments of the software industry have peculiarities that cause them to differ from the segments where free software shines: libraries and other tools with stable, well-defined requirements.
I expect things to go like they went with Windows XP. Windows 7 gets a few years of support extension (security only), then is finally de-supported. Some diehards stay on Win7 anyway.
BTW, XP still has 5.2% market share in the netmarketshare.com statistics.
C - the footgun of programming languages
Nice PR stunt by Bill Gates to divert our attention while Microsoft works hard in the rear to make Windows 10 as a service making the traditional view about intellectual property less relevant. The traditional view started to develop 300 years ago (Statute of Anne 1710) during advent of printing industry that made copying easier and cheaper, and revised in 1980's for the software. Why rent about that now when (thanks to recent advances in network speed which made it possible) Microsoft is strongly pushing for its products like office application and OS as an online service?
Back, back...way back at the beginning of DOS was the claim that real capital was made selling it and keeping it to sell again... ad infinitum
Wow, Bill Gates just discovered non-rivalrous goods.
supply and demand applies to marketing. not software. software allows marketing to catch up with supply and demand. ok sales people. lunch time is over. keep up with software...yeah...right.
Interesting story. I wish the Slashdot discussion lived up to it, but so far I haven't found any trace. Usual searches, etc.
It would be nice to blame this opening post. Too bad it buries the actual insight, notwithstanding the typical first-post mod. The value and price of the ebook reflects supply and demand, but these are not the supplies and demands you are looking for.
The suckers... Er, Of course I mean the customers are paying extra for the convenience. Same as it ever was if you think about it wrong. (Searching on "convenience", I discovered a couple of relevant thoughts, but not moderated appropriately. Again the Slashdot moderation is failing to do its job.)
What is actually important is the TIME spent reading those books, and economists don't care because time is so hard to count compared to money. On one hand, we all live it and experience it exactly the same way. On the second hand, no one knows how much they really have. On the third hand, not all uses of time are equal in the pursuit of happiness, but on the fourth hand, we all value time quite highly. Lots more hands to go, but my main point is that the best new way to think about the economy that I've found involves putting the cart of money BEHIND the horse of time.
Now about that Capitalism without Capital book... Ah, I see a copy in a not so local library, but I can make the journey soon enough. I hate being an early adopter, but I'm happy to be an early rejecter of Amazon. Almost two decades of being Amazon-cancer free.
Other references? Most relevant one seems to be The Zero Marginal Cost Society by Jeremy Rifkin. Or perhaps Doing Nothing by Tom Lutz?
*DING* That must mean it's time for Ekronomics 101 yet again, but I've about run out of the time I want to spend on this reply. If anyone is interested, I might continue later--hopefully within the strict time limits of stories on Slashdot.
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
Big pharma is only able to overcharge because the FDA creates a virtual monopoly, through its costly and lengthy process at the end of which very few companies are allowed to make a drug.
Remove the "virtual" and "costly and lengthly", substitute "no other" for "very few", and you've described the relevant characteristics of copyright. So it looks to me like the grandfather post is non-hooey.
Try to make an Epi-pen and sell it, it only costs like $30 to make [and patents have expired]
Aside: There is now an approved generic Epi-pen at a more reasonable price. The timing looks like the manufacturer started the development and approval process about the day the price-gouger announced the price hike. The inisible hand strikes as usual, the FDA approval process just delayed it.
I totally agree with the bulk of your post. But I agree completely with its predecessor.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Have a look at the first chart in Gates's article. It contains no numbers. I am unsure what it is supposed to mean.
Would it help to instead draw a graph of demand divided by supply? Then the theory of capitaliism would say that when the supply / demand ration rises, the sellers will lower their prices leaving goods unsold. but when it drops below 1.0, sellers will raise prices, leaving customers hungry and thirsty. The equilibrium would be where demand equals supply. and the optimum would add that the vendor make just the right amount of profit.
The trouble is that poor people often have little money with which to buy the goods the shopkeeper has a hard time seliing. How do you measure demand where there is no purchasing power? Presumably by counting how many products were actually sold. If the price of bread is halved, people won't buy twice as much bread.
Economic growth is related to technology. If every village has a blacksmith, who needs a year to build an automobile, cars will be scars. If someone called Henry Ford builds a huge expensive automobile factory, the cost of producing a single car will go down and the supply will grow (blacksmiths have to be retrained to become computer programmers).
Computer software is an extreme example where the production cost of a single program becomes trivial, while the overhead to write the program soars. Bill Gates understands that part very well. The difference is that Henry Ford could increase the supply of cars by investing profits in new factories, whereas Word and Excel had to be invented first, after which reproduction became dirt cheap. The same breaktrough happened when Gutenberg invented the printing press that made books really affordable.
Software doesn’t work like this. Microsoft might spend a lot of money to develop the first unit of a new program, but every unit after that is virtually free to produce.
Marketing, sales, distribution, support : these activities are not free, they increase with the number of items sold.
Presumably, many things cannow be produced at trivial marginal cost. The logical thing would be to reduce the cost for a copy of those works to zero as well.
The problem is that a publisher now must assume that he or his prospective clients have significant demand for a new erotic novel, gather monies to have one written, and then recoup the investment somehow. One viable model is the national broadcasting service, that has a more or less fixed customer base and thus revenues to invest in 'content' (works of art). Likewise, Microsoft has a captive customer base for future versions of their wares.
Since Windows 95 for 32-bit Intel/AMD machines, they had to have developed many compatible Windows 95's growing versions for latest Intel/AMD machines.
But, the software company didn't it. By example, the possible revisions of Windows 95 don't work in 2018's PCs. But, did they say that they are compatible?
Why? Because the software company went to make money for different and incompatible products (the different windowses or offices or games for each X years).
Gotta live it when these âoegreatâ people say obvious truths. So Bill, why is MS Office so expensive? âBecause we can.â(TM)
Largely known fact claimed by billionaire IP toughguy.
He didnt bring this up when he was charging $300+ per full office package. They made more back than any R&D of any company.
Bill, how many arguments have you had with your financial people, who (correctly) keep pointing out that your "intangible" stuff costs millions of dollars to promote, distribute, and maintain. How many millions has MicroSoft spent on software maintenance?
Isn't that why the company is trying to move to a "subscription" pricing structure, to make us pay for those maintenance costs??
To a degree I would agree with Bill Gates on this one, but only to a degree, as it also potentially depends on the business model. Copyright is by definition a monopoly that is granted to individuals and entities by governments. It's bizarre to call yourself a free market capitalist or call a society as such where there are "Copyright" laws. A free market should generally result in competing entities selling the same and similar product. In a free market there would be competition. However Copyright undermines that system and democracy and free markets in general even in areas that aren't producing content. Everything from cars and john deer tractors have restrictions attached that are enforced through copyright law which prevent competition in what might otherwise be a free market. The price of a "copy" would be near zero in a free market, but we do have examples of business models in the software development world that aren't reliant on maintaining a monopoly thanks to principled free software developers who have built up businesses off of differing business models not reliant on copyright (I'm not suggesting that the licenses used relinquish copyright, but rather the business models would not disappear if copyright disappeared).
Guy notorious for starting shitty company whose only real claim to fame is exploiting fear, uncertainty and doubt, aka FUD, and employing anticompetitive and illegal means to reap a theretofore previously undreamt fortune, doesn’t know what the fuck he is talking about when it comes to software. Or economics. His company was and is shit, its fortune stolen from their betters, and he should seriously shut the fuck up before he convinces the last people who do not yet realize he was LUCKY and ruthless, not brilliant, that he is in fact, a dumbass.
Without CHEATING, without breaking laws designed to foster and protect healthy competition, Microsoft would have gone under almost before it got off the ground, you would never have heard of Bill Gates, and he would now be a night janitor at a junior college, bitter AF about his idiotic mistake dropping out rather than finishing his education.
Fuck him and his ignorant opinions. The laws of supply and demand DO apply to software... for example: If someone is selling a piece of software, i.e., an operating system, and no one wants it because it is a piece of dog shit, like for example... every other iteration of Microsoft Windows, there is little to no demand, and the price must be dropped to sell copies. If it is a hideous enough piece of shit, and there is NO price people will pay, you stop selling it because you lose money with every box you ship that gathers dust in perpetuity unsold.
On the other hand, if your OS (or whatever,) is awesome, you can charge real money for it and people will pay, even sometimes when there are cheaper alternatives. Gates does not know this because in his experience, he has never SOLD an operating system that was not a flaming pile of fetid shit.
Gates apparently thinks he has made some earthshaking insight that the fact that there exists a class of product where the majority of capital outlay in its creation is design, means somehow that product is exempt from laws of economics. Maybe his mind is going. The only real observation to be made here is that getting data to the customer has become trivially cheap.
This is only because price per bit transmitted has fallen far faster than inflation. If you wrote an OS, or indeed any piece of software where the amount of data is so large it cannot be supported conventionally, suddenly the laws of supply and demand would VERY much apply again, because in truth, they never STOPPED applying, and Gates is WRONG, and hilariously so.
Our reign has gone on long enough. Indeed. Summon the meteors.
Why not divide into groups of 100 (or 150 -- Dunbar's number?) then, and have those managed by a hierarchy above them? A cellular design like this mimics the tactics of revolutionary cells.
Alternative Right.
To me as a hobby author writing a novel takes 1-2 years of full spare time dedication
And that's not even factoring in all the other labor-intensives step that must happen before a final book appear (like proof-reading by the publishing company, etc.)
The problem is that readers aren't paying any of these steps directly.
For historical reason, the part where a reader pay, is to get a copy, because for obvious historical reason, that used to a pretty complex and limiting one. You paid a publisher or a distributor to make copy, and that one in turn pays all the other necessary steps that bring the book into life.
The problem is that nowadays (first with printing methods having evolved a lot, and nowadays with e-books where making a new copy is completely trivial), this making a copy and putting it into the hands of the public is about the simplest and cheapest possible.
There's a total disconnect between what you are asked to pay for and what goes behind the scene into a book.
(The same logic applies to any other media)
The market should evolve a way to actually help pay the actual steps requiring work.
Modern patronage over the internet (like patreon, to pay the actual artist working on something, instead of paying for some copies) could play some part in the solution, though it doesn't cover all the situations (small hobby writer. If you don't have a giant reader ship, there's no way to cover your needs through patronage).
the TL;DR: version - the problem is that nowaday you give money for something that cost nothing to do (fetching a copy) and hope that this step will cover the actual costly steps.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
His mother actually can't stand him so she moved back to Poland to live out here dream of finally being free of Alexander Peter Kowalski.
What would be really interesting, if the data can be attained , I don't know if it is available, would be to look at actual cost. If you take 30 big software companies, and ask , what kind of profit do they make and when, what are their actual cost ( overhead, employees, help desk etc, including research and loss from products that bomb). What does it actually cost to run a successful software company and what is the minum unit price you could sell successful software at and still break even/ make a 50% profit etc.
I have difficulty believing large corporations and their management have no handle on this problem. Not that it isn't complicated, but just like casino's you have to quantify risk vs rearward and rig the game so you don't go broke.
If the data was available for study , it would make an interesting jumping off point for discussions like copyright law and licensing, because ideally we would optimize the law so that these corporations that do well would make serious profit, but not hold the populous hostage for every last penny that can be squeezed from them for 100 years, like they currently can do.
âoeTolerance applies only to persons, but never to truth. Intolerance applies only to truth, but never to persons.
When every human on Earth is fed, clothed, sheltered, educated and entertained, THEN you can have this. Until such a time as that, capitalism in this form is absolutely immoral.
I was not passing judgement on capitalism, merely pointing out how it works. It is also not a "form" of capitalism but baked into its very nature. While I agree that, on the surface, this does appear immoral the result is the most efficient form of economy that delivers the most goods and services to people than any other system ever devised. I tend to look at capitalism the same way the Churchill did democracy: "it's the worst form of economy except for all the others that have ever been tried."
What if HR were divided into ten groups of 150 people each? There would be internal competition there, and variation in choices, so no longer a monolithic HR entity.
Alternative Right.
https://en.wikipedia.org/wiki/Social_mobility
Casteism
It's still capitalism where you get what the market bears.
but then, Gee, Bill nice of you to notice after you have made your billions.