Subject: RE: A few here may have an opinion on this
From: "Wendel de Joode, Ruben" <>
Date: Thu, 24 Oct 2002 14:41:13 +0200

 Thu, 24 Oct 2002 14:41:13 +0200
Stephen> I think it's enough to conclude that
Stephen> any of several blockbuster proprietary apps (Visicalc, anyone?
Stephen> about NintendoOS? :-) have created more value than all of free
Stephen> software combined.

I am not quite sure why this is so obvious... Not that I am an expert in
economics, but isn't value a very different concept than revenue?
Correct me if I am wrong, but isn't value the utility or relative worth
of a given good? This worth is usually expressed by the prize customers
are willing to pay for a given good. There are a lot of instances where
prize is not an adequete representation of the value of the good though.

For example many companies through marketing are very adequate in
increasing the expected value of the good and thus charge a high prize
for the good. In reality the value of the product could be very low
though, much lower than the actual amount paid for the product. One can
wonder whether products that are sold a lot and created a lot of revenue
have truly generated a lot of value, or whether the company was very
good in marketing. Thus have blockbuster apps really created a lot of
value? Or were they the result of good marketing campaigns?

Another maybe more obvious example is clean air. The value of clean air
is very high as we would die without it. Still we don't pay anything for
the air we breath.

A third example in which it is hard to relate prize to value is free
software. Because it does not create any revenue, it automatically is
valueless... I do not think so! I think a lot of people and companies
using open source or free software would be quite willing and are indeed
willing, to pay a high prize for free software, but why would they do
so, if it's available for free?

Therefore I am not quite sure why Nintendo would have created more value
than for instance Apache or Linux. The question I think becomes: How can
we value open source and free software and how should we compare this to
proprietary software? Only then are we able to judge whether for a
specific economy open source/free software creates more or less value
than proprietary software.

Ruben van Wendel de Joode
Delft, University of Technology 
0031 (0) 15 278 1105 (telephone)