Subject: Re: crux of the essence
From: Tom Lord <>
Date: Tue, 16 Oct 2001 03:35:04 -0700 (PDT)

	Stephen Turnball writes:

	Tom> -- and Coase offers a theory relating property rights to
	Tom> economic efficiency.  Do you have a specific application of
	Tom> Coase's theory in mind regarding Free Software?

	Yes.  A world with only Free Software is necessarily poorer than that
	of some mixed regime.  Weakened property rights (1) somewhat reduce
	incentives to develop, and enormously reduce incentives to market and
	maintain, software, and---at least as important---(2) completely
	obscure the price signals that inform developers of what people want

Alright, I'll bat this around a little bit.  Hmm.  I hardly know where
to start.

1) Precisely which conclusion of Coase's are you applying here?
   Presumably this is not supposed to be an application of the "theory"
   of social cost....what writings would you cite and why?  (As I
   said, I'm just getting started in catching up to your reading

2) Coase seems to have written influentially (but not without
   subsequent, more careful critics) about real-property rights.  He
   seems to be mostly recognized for the effect his writings have had
   on law and policy in areas such as privatization and transferable
   rights to polute the environment.

   Even if we ignore the critics and faithfully accept Coase's
   writings, analogies between intellectual creations and real
   property are imperfect and problematic.  Did Coase write about
   intellectual property specifically?  Or are you suggesting an
   analogy?  If an analogy -- how exactly does that analogy work?

3) Like many FSB writers, you seem to be stuck in a mode of
   understanding of Free Software where the economic incentives to
   write software must, somehow, be a side effect of copyrights.  With
   those blinders on -- of course the GPL would seem to remove

   But an alternative point of view is that the GPL's inversion of the
   usual implications of copyright simply sets the stage for modes of
   exchange for software-producing labor that aren't based on the
   selling of copyrights -- ensuring that authors who choose the new
   terms have the advantage of a public software basis set.  As an
   engineer, I promise you that the public basis set leads to much
   greater efficiencies before very long.

   In other words, I don't think you are using the word "necessarily"
   with anything like its ordinary meaning.  But then, that would be a
   lot of pop economic theory in a nut-shell ;-)

Seriously though -- if you can cite a particularly relevant piece of
economic theory worth reading to get good ideas about the business of
software -- especially free software -- and give convincing reasons
for that cite, I'd like to read it.  Personally, I'm skeptical:
software has all sorts of structural properties for which there is no
good precedent in the history of human economic activity, as near as I
can tell.  Surely you disagree...