Subject: Re: A few here may have an opinion on this
From: L Jean Camp <>
Date: Fri, 25 Oct 2002 10:17:12 -0400

The results are flawed because they are dominated by the returns of 
investment made by a monpoly.  So you have to look at all the monopolistic 
returns as captures of customer surplus. That customer surplus does not 
disappear in the open source case, but instead is captured by the customer. 
Given the industry you are considering is the single one where there is a 
current finding of monopoly power, I guess any student you taught would see 
that as obvious. 

On Thursday 24 October 2002 20:30, Peter Wayner wrote:
> >I looked up MSFT's latest financial release
> >(operating results for Sept 02 quarter, Oct 17).
> >They had $7.4B revenue and $2.7B net income.
> >EBIT was $4B and they paid $1.3B in taxes.
> >In the Sept 01 quarter (a really bad quarter)
> >EBIT was $1.9B and they still paid $600M in taxes.
> >Do you still think that proprietary software is not
> >a great business model?

Monopoly is always a good thing for the monopolist. Monopolies are not even 
necessarily bad things.
> It's not really fair to say that just because MSFT is making tons of
> money that this is the best thing for society. I'm not saying that
> it's not, but I don't think that it's fair to measure things by how
> much they are monetized.

Want to make this argument?  Look for cases where there is an agreed-upon 
problem wrt monetization and work from there. 

Open source economics is not the economics of oppression  It not like  
forcing a class of people  to work for lower pay and excluded from many jobs 
(Until the sixties jobs were listed under male or female) -- with the 
horrible tool on the family well documented.  Comparing OS to denying women 
access to employment is ludicrous and deeply ignorant of history. Of course, 
the current reality of women in developing countries where denial of property 
rights, physical abuse in the home and market, and denial of basic human 
autonomy are causes of economic failure not big fat unrecorded GDP bonuses. 

> Consider the work of women. In times past, the house work was not
> monetized. The women didn't make a salary and didn't pay income tax
> on it. Now, we've pushed them to take jobs outside the house and
> outsource their work to restaurants, cleaners, and cheap labor
> overseas. 

Hmm, this is not a problem that has any of the characteristics you are 
seeking.  Also, I myself do not give my work to cheap eats. And shockingly 
enough, less people are required to the cleaning now that there are fancy 
things like washers and dryers. You are seriously confused. 

Most of men's work was not monetized on the farm either. All the work of 
survival was without pay.

>The women make a salary, pay income tax, and then pay sales
> tax on the products that they buy to replace the work they used to do
> for "free." Is society better off?

In a word: YES. 

> The GNP is higher. Women have more
> mobility and control. But everyone is fat because restaurant food
> isn't as healthy. The kids are all on ritalin and can't even ride
> their bikes outside anymore because no one is around to mind them.

Women in the workforce causes obesity? If the argument for OS busineses 
depends on that you are in very, very dire shape.  I wouldn't go with that if 
you were hoping to convince anyone. Like, say the treasurers or lawyers in 
many corporations. (Honey, open source is good like you being fired for being 
female. Not a good sell.) 

> Business is great for solving many problems but so is the commonweal.

Back to reality --

Try environmental economics.  There is the destruction of a good with many 
benefits that appears to be only wonderful in GDP.

Deforestation is an example of a wonderful GDP boost that has terrible 
immediate impacts - like the floods in Bangledesh.  Removing the trees looked 
great in terms of GDP and exports. The horrific floods are treated as if they 
were an unrealted "natural" disaster. Like the pollution that killed people - 
the temperature invesion in PGH in the forties was an "act of god".  The zinc 
 mill polluting the air was a good things in terms of GDP.

Open source creates value that is hard to measure: innovation, human 
capacity, and frankly, human autonomy.  Open source returns tend to be 
embedded in capacity and returns to companies that adopt open source. If you 
want to quantify open source you need to credit open source and 
interoperabilty with any gains created by the Internet, given its fundamental 
dependence on open source. You would have to add all the value in open source 
captured by the companies.

If you want to prove closed source is better you need to be able to prove 
that what is seen is actual created value not extracted consumer surplus.