In fact, I came quite late to Heinlein. I don't really like science fiction that much. I am fairly well-read in philosophy. I have studied the literature from the classics by Locke, John Stuart Mill, Humboldt, Adam Smith, Bastiat, etc through the more modern works of Popper, Hazlitt, Hayek, Friedman, Nozick, and Mises. If those authors are all included in the matchbook cover course on political economy, it's a pretty damned good matchbook cover course!
I have made a concerted effort to read authors who write from a different point of view, but they have been uniformly unconvincing to me. Perhaps you could suggest some books that I should read? I would be more than happy to discuss/debate these issues with you, but this is not the proper forum. And personal sniping should be a strictly two-party transaction.:) You can email me at knoxcarey@mindspring.com.
I might be accused of excessive free-market cheerleading (I don't deny it), but I think that even non-reciprocal transactions can be understood in the framework of utility exchange.
The classic Adam Smith-style exchange is this: I have an apple to sell, you have a dollar. I value your dollar more than the apple, and you value the apple more than the dollar. Exchange ensues. Utility is increased on both sides, and (significantly) by our own personal measurements of utility.
But we can take one party out of the picture and apply the same reasoning. I meet a homeless man on the street. I have a five dollar bill. I feel sorry for the homeless man, so I give him the five dollars. I obtain the peace of mind that comes from being a good guy. In effect, I purchased that peace of mind for $5. The utility has still increased on both sides of the transaction. Even though the homeless guy did not explicitly give me anything, his existence was required for me to obtain my sense of well being for helping a homeless man.
Similarly, the consumers of OSS projects are parties to an "exchange" in which the software author obtains his non-monetary rewards.
Yes, I am arguing that altruism is economic and that it may be understood in the context of utility. Clearly, if I get no peace of mind from giving money to the homeless man, the transfer of $5 will not happen. Just as in a two-party transaction, I am implicitly (probably unconsciously) comparing expected utilities.
To push it to an extreme, even the decision about whether to go to the movies or take a nap on a Saturday afternoon is an economic decision. Or the decision to commit or not to commit a crime.
The truly free market respects the right of every individual to make these personal utility judgements without interference, no matter how many parties are involved in a transaction. Many people think that it is somehow "dehumanizing" to reduce all decisions to economics, but this is what normal human beings do -- we all try to make our lives better by our own definition of "better", i.e. we all try to increase our net utility.
At any rate, Eric, thanks for responding. Keep up the good work!
I'd like to ask Eric to clarify the concept of the gift culture as distinct from a free market culture.
It seems to me that the so-called "gift culture" is also a free market culture, and those who see a distinction between them are merely confused about the concept of "money". I suppose most people view money as a stand-in for good and services. Since we can't carry around all of our goods and services to barter, we introduced the concept of money to facilitate trade. But economics goes beyond money -- it's about the exchange of utility. And money is just one (rather poor) way to quantify utility.
Consider: given one hour to spend writing code, I can choose to write free software under the GPL or some similar license, or I can choose to write code for money. The amount of money I could earn during that hour of writing commerical code is the opportunity cost of writing the free code -- it is the amount of income I would sacrifice to write the free code.
But writing the free code may provide me with some non-monetary benefit such as ego gratification, fame, repsect, the promise of robust software etc. If I personally value these rewards over the money, then by definition, those rewards have a higher utility for me. By writing the free code I am still "paid", but I simply choose to be paid in a different medium, a medium that holds a higher utility for me personally.
If we expand our view of economics beyond money and into the realm of utility exchange, then there is absolutely no distinction between a "gift economy" and a "free market economy". To me, a "free market" means that people are able to exchange utility in any medium whatsoever without interference. The so-called "gift culture" falls into this category.
I would even suggest that it is precisely the concept of "money" that has caused the most divisive internal battles in the open source community. By moving beyond money and realizing that there are other, equally valid measures of utility, the open source community can unify its communitarian instincts (RMS) and its libertarian instincts (ESR). There is no contradiction here -- just economic confusion.
Slashdot Mirror
:)
:) You can email me at knoxcarey@mindspring.com.
In fact, I came quite late to Heinlein. I don't really like science fiction that much. I am fairly well-read in philosophy. I have studied the literature from the classics by Locke, John Stuart Mill, Humboldt, Adam Smith, Bastiat, etc through the more modern works of Popper, Hazlitt, Hayek, Friedman, Nozick, and Mises. If those authors are all included in the matchbook cover course on political economy, it's a pretty damned good matchbook cover course!
I have made a concerted effort to read authors who write from a different point of view, but they have been uniformly unconvincing to me. Perhaps you could suggest some books that I should read? I would be more than happy to discuss/debate these issues with you, but this is not the proper forum. And personal sniping should be a strictly two-party transaction.
-knox
I might be accused of excessive free-market cheerleading (I don't deny it), but I think that even non-reciprocal transactions can be understood in the framework of utility exchange.
The classic Adam Smith-style exchange is this: I have an apple to sell, you have a dollar. I value your dollar more than the apple, and you value the apple more than the dollar. Exchange ensues. Utility is increased on both sides, and (significantly) by our own personal measurements of utility.
But we can take one party out of the picture and apply the same reasoning. I meet a homeless man on the street. I have a five dollar bill. I feel sorry for the homeless man, so I give him the five dollars. I obtain the peace of mind that comes from being a good guy. In effect, I purchased that peace of mind for $5. The utility has still increased on both sides of the transaction. Even though the homeless guy did not explicitly give me anything, his existence was required for me to obtain my sense of well being for helping a homeless man.
Similarly, the consumers of OSS projects are parties to an "exchange" in which the software author obtains his non-monetary rewards.
Yes, I am arguing that altruism is economic and that it may be understood in the context of utility. Clearly, if I get no peace of mind from giving money to the homeless man, the transfer of $5 will not happen. Just as in a two-party transaction, I am implicitly (probably unconsciously) comparing expected utilities.
To push it to an extreme, even the decision about whether to go to the movies or take a nap on a Saturday afternoon is an economic decision. Or the decision to commit or not to commit a crime.
The truly free market respects the right of every individual to make these personal utility judgements without interference, no matter how many parties are involved in a transaction. Many people think that it is somehow "dehumanizing" to reduce all decisions to economics, but this is what normal human beings do -- we all try to make our lives better by our own definition of "better", i.e. we all try to increase our net utility.
At any rate, Eric, thanks for responding. Keep up the good work!
-knox
I'd like to ask Eric to clarify the concept of the gift culture as distinct from a free market culture.
It seems to me that the so-called "gift culture" is also a free market culture, and those who see a distinction between them are merely confused about the concept of "money". I suppose most people view money as a stand-in for good and services. Since we can't carry around all of our goods and services to barter, we introduced the concept of money to facilitate trade. But economics goes beyond money -- it's about the exchange of utility. And money is just one (rather poor) way to quantify utility.
Consider: given one hour to spend writing code, I can choose to write free software under the GPL or some similar license, or I can choose to write code for money. The amount of money I could earn during that hour of writing commerical code is the opportunity cost of writing the free code -- it is the amount of income I would sacrifice to write the free code.
But writing the free code may provide me with some non-monetary benefit such as ego gratification, fame, repsect, the promise of robust software etc. If I personally value these rewards over the money, then by definition, those rewards have a higher utility for me. By writing the free code I am still "paid", but I simply choose to be paid in a different medium, a medium that holds a higher utility for me personally.
If we expand our view of economics beyond money and into the realm of utility exchange, then there is absolutely no distinction between a "gift economy" and a "free market economy". To me, a "free market" means that people are able to exchange utility in any medium whatsoever without interference. The so-called "gift culture" falls into this category.
I would even suggest that it is precisely the concept of "money" that has caused the most divisive internal battles in the open source community. By moving beyond money and realizing that there are other, equally valid measures of utility, the open source community can unify its communitarian instincts (RMS) and its libertarian instincts (ESR). There is no contradiction here -- just economic confusion.
-knox