Subject: Re: Free Software == Dumping??
From: Craig Burley <burley@gnu.ai.mit.edu>
Date: Wed, 28 Jun 1995 14:18:30 -0400

>It's not a question of whether purchasers are educated enough. There
>is a collective action problem here.  For any individual, it's more
>rational to purchase the underpriced, dumped merchandise.  So if you
>want to eliminate the hard caused by dumping, people have to be either
>convinced or forced to act against their immediate self-interest in
>favor of a collective, longer-term good.  Anti-dumping laws are one
>way to accomplish this.  What you are suggesting above is essentially
>a boycott.  Boycotts can be effective tools, but generally they only
>work when there are clear moral issues at stake. I doubt that a
>boycott could be organized against dumping, even with the Internet.

Ah, so somehow people are incapable of making decisions on anything
other than a pure, self-interest ("rational") basis on their own,
but let them put together an organization that uses guns to impose
whatever laws they might write, and suddenly they make decisions
that are, collectively, socially enlightened?  Bah.

I think your own wording makes the case most eloquently for my point:
"...forced to act against their immediate self-interest in favor
of a collective, longer-term good."  Is it in favor of "good" to "force"
people to do anything against their will?  I much prefer "convince",
which you also use, but which is not the (usual) province of government
and its laws and regulations.  "Convincing" can be done by non-military
organization, such as churches, charities, watchdog groups, and so on.
E.g. Bob Dole's recent attempt to convince Hollywood &c to reconsider
its basis for deciding what kinds of movies to make.  (Never mind that
they've been improving in this area quite a bit, IMO, over the past
two decades, and let's not get into the issues about inadequate press
reporting about what he actually said or about why he said it.)  Since
he explicitly disclaimed any attempts at censorship, that he was
simply asking for increased awareness of citizenship by those in
corporate Hollywood, he was acting much like a watchdog (among other
things).

And, for your information, I know I make purchasing decisions based on
lots more than pure self-interest (in the sense of getting the lowest
price), and I suspect that more than 90% of the people on this list
do as well.  I don't need government to interfere with my decisions,
nor with anyone else's.  (Sure, sometimes I'd _like_ it to, but then
I realize I'm asking for trouble....)

>    BTW, suppose a very vicious form of dumping, e.g. where an organization
>    offers free food to an increasingly large and dependent group of people,
>    such that the competition (those trying to sell food to those people)
>    is forced out (or at least forced to raise prices to afford to continue
>    doing business in the area)...
>
>If you are trying to make an analogy between dumping and welfare, it's
>pretty strained.  Welfare does not compete with supermarkets, since it
>is not usually in the form of direct grants of food, and when it is it
>is to people who cannot afford to shop at the supermarkets.  The only
>conceivable group that is in "competition" with welfare is employers,
>who cannot expect to hire people for less than what they can receive
>from the dole.

Funny, I never mentioned welfare.  But, since you brought it up, if
you replace the free provision of food with one of money, and replace
those competing to sell food with those competing to provide jobs (i.e.
income), maybe you've got something there, as you suggest.  And it
does seem like a pretty vicious form of dumping now that you
mention it -- wean people off "dependence" of having to work for a
living, effectively chasing off employers, and then you have captured
their votes.  (Given the anger and hysteria I've seen expressed by
these victims on C-SPAN over the possibility that the free ride might
someday end, I'd say this form of dumping has succeeded to a
spectacular degree.  Too bad.  I wish it had been illegal.)

>    Note that in discussing dumping, people rarely consider that the
>    "intent" of the dumpers might be overtly to "help consumers by offering
>    them less-expensive products".
>    
>If that's the intent, then it isn't dumping, as you yourself said
>above.

I was unaware that anti-dumping laws took stated intent into
consideration.  (And that's what I was hinting it via use of
the word "overtly".)

My point was that, just as dumping companies can claim their actions
are in the best interests of consumers, so can governments so claim
about providing welfare and such.  In both cases, they are right --
when only short-term interests are considered.  And, in both cases,
the long-term interests are entirely about making sure the companies
win their markets and the governments win their re-elections.

>Having wandered away from the topic: it's clear to me that free
>software of the FSF variety is not dumping.  But I believe the
>original query was about Netscape.  What they are doing, as I
>understand it, is giving away beta versions of their browser, with the
>intent (or at least the possibility) of charging for the finished
>version later.  Given that they are the dominant supplier, this can
>easily be seen as dumping.  I think it's important to keep the
>distinction clear.

This is an interesting bit of information.  I didn't know anything
about Netscape until this topic started up here, and then only
as a name mentioned in it.

Still, I think that since giving away beta versions of software is
hardly a new activity, it's difficult to see how suddenly it becomes
dumping in this instance.

Put another way: if Del Monte announced a new line of long-shelf-lie
vegetable products that are "beta" because the process they use to
ensure long shelf life is to subject the veggies to large doses of
certain kinds of radiation, and they were giving away these veggies
on these terms on a "try this out, let us know how you like it"
basis, would you consider that dumping?  I wouldn't.

Just as many people wouldn't set their life expectations based on
experimental glowing vegetables and stop buying canonical food, I
doubt people will assume that because there's a free beta of a
Netscape product around, there's no reason to buy more stable
competing software products.  In both cases, the freely distributed
products are really competing only against other _experimental_
products -- that's their stated category.  If it happens that the
beta version is clearly superior to vendors' "solid" versions, so
be it -- at least the customer is on notice that the price _will_
rise once the new product leaves the "beta" stage.  Disallowing
this by calling it "dumping" is an excellent example of how government
might well interfere with a superior product by a superior company
rapidly capturing the significant portion of a market that it
deserves -- and, denied this ability, less investment towards making
such superior products will be made available, thus hurting the
very consumers the anti-dumping laws are intended to protect.

However, the rapidly growing networking market does offer opportunities
for some real dumping, I think.  Suppose a vendor (like Microsoft)
decided to capture a significant portion of a growing market like
this one by distributing a known, stable product widely for free,
and that product had characteristics causing it to "capture" its
users (e.g. it provided better connections to Microsoft's own network,
it stored user data in proprietary formats, etc.).  And it continued
distributing this product until all competitors had been pushed out
of the market, including possibly competing service providers...at
which point it could then raise prices on the service, on the software,
or both, for some time without people having much of a choice.

That's probably dumping.

Again, I don't see a need for government to legislate against it to
this extent.  The recent trade-war fiasco, and that ruling posted
here regarding Dow Chemical (or whoever) and the free licensing of
patented processes, illustrate the problem: government is no more
able, and probably less able, to accurately assess and respond to
claims of "unfair trade" than individual people are.  And the
advantages of leaving the decisions to individual people include
that they are left as free agents (not children of a big daddy
government making all their decisions for them), they are encouraged
to think for themselves, and they have no more nor less power than
their own free will to change the world for the better (however they
understand that concept).  Government has this illusion that by making
better laws and using bigger guns (economic, military, whatever) to
enforce them, it makes the world better, even when its decisions go
against the collective will of the people it is supposedly governing.
(And it they majority does support the decisions, then in most cases
there's simply for need for government to act -- the majority can
act on its own, as it does every day in this thing we call the
(semi-)free market.)

Roles government can play in these areas could involve perhaps
those much like independent watchdog agencies, but perhaps using
the added (and still probably necessarily governmental) resources of
government such as intelligence agencies.  For example, if the
US government had no _power_ (due to, say, a revised Constitution)
to interfere in the free market by imposing tariffs and such, it
could still make public assessments about various issues, such as
whether it believed a certain company or country was dumping its
products, leaving the decisions about what actions to take to its
people.  Note that this is what watchdog groups do, and it works
pretty well -- certainly better when you take into account the fact
that people act on their own free will, not because the government
is holding a gun to their heads forcing them to "do the right thing".
People tend to become smarter in the former circumstance than the
latter.

But, call me a Jeffersonian, not a Hamiltonian, I suppose.  I simply
don't believe a handful of people are better at ruling others than
people are at governing themselves, in the long term.  And I think
history bears me out on this -- better societies generally evolve
from cultures where people are encouraged to think and act for
themselves, and in the 22nd Century, the societies that evolve to
rapidly cope with the vast global markets that are evolving (in the
newer areas like information exchange, but also traditional ones)
are going to win out in major ways.  And, I have reason to question
whether the US is going to be one of those, given how accustomed
we've grown over the past several decades to letting the government
make our larger-market-issue decisions for us as a people, even
to the point of doing things the majority clearly wouldn't support
(like that 100% tax on Japanese import vehicles, a move that was
entirely to do with trying to recapture votes lost to the Administration's
stance on NAFTA, and nothing to do with the non-existant attempts
by American auto makers to sell cars in Japan, as even Ford and GM
higher-ups admit).  Leaving these decisions to government means leaving
it to a slow, politically self-serving, and rather menacing
organization, and that seems likely to be a poor way to operate now
and especially in the future.

Finally, note that there are people who have been complaining about
the anti-business, anti-market, anti-competitive nature of free software
for some time, calling it "communist" and other such names.  For
that matter, page 13 of the July 1995 issue of Boston Magazine has
this quote: "If Chuck Collins someday has a son who is anything
like Alex, the entrepreneurial Reagnite played by Michael J. Fox on
_Family Ties_, he will have a lot of explaining to do.  Because Collins
[...] gave [his vast fortune] all away."

It does seem there are a lot of "conservatives" who believe it is a
sin to give things away, or to use it for charity, and so on.  And
a lot more "liberals" who think all conservatives think that way.
("Alex" was an example of an extreme, narrow-minded conservative --
usually the only kind you see depicted in the entertainment media --
hardly a typical one.  All the conservatives I know love to give stuff
away, or are at least open-minded about doing so without insisting
that government first force everyone else to give _their_ stuff away
as well.)

But, most thoughtful people recognize that perhaps the biggest benefit
of being given the freedom to keep the fruits of your labors is
having the freedom to choose with whom you wish to share it, and
for whatever reason is important to you.  It is never counter to
the free-market mechanism to make free-will offerings to others; that
kind of activity is simply one of many _components_ of the free
market (albeit an important one, in terms of the way we choose to
evolve society).  But, choosing to give your stuff away definitely
runs counter to the mind-set that thinks government should make these
kinds of decisions for its people.

        tq vm, (burley)