Slashdot carried an interesting story today about Alexey Pajitnov, the creator of Tetris, claiming that Free/Open Source Software (F/OSS) destroys free markets and eliminates companies’ ability to “create wealth”, a dubious proposition at best, but one which spawned the following insightful comment from one “jbeaupre”:
Oddly, I see FOSS as an extreme example of capitalism. Reductio ad absurdum with a twist.
In a given market with profits, more competitors will enter until profits are driven down to the point the cost of entering just isn’t worth it. With software, this set point is a bit lower than many industries, because less capital is needed for production. FOSS lowers it further by reducing the barriers to entry (you get to reuse older code). Some people derive a non-financial benefit (and sometimes financial) that exceeds the cost of contributing, so there is a negative cost (a benefit). It’s still worth it to them to enter the market no matter what. So even assuming no profit, you get plenty of competitors.
The capitalist version of superconductivity. Against the rules except in unique circumstances.
What this guy misses are controlled markets with barriers to entry.
“The capitalist version of superconductivity.” I like the sound of that!