Exploring Entitlement Economics

Bradley M. Kuhn has a thought-provoking post with the title "Proprietary Software Licensing Produces No New Value In Society". Here's a key section:

I've often been paid for programming, but I've been paid directly for the hours I spent programming. I never even considered it reasonable to be paid again for programming I did in the past. How is that fair, just, or quite frankly, even necessary? If I get a job building a house, I can't get paid every day someone uses that house. Indeed, even if I built the house, I shouldn't get a royalty paid every time the house is resold to a new owner. Why should software work any differently? Indeed, there's even an argument that software, since it's so much more trivial to copy than a house, should be available gratis to everyone once it's written the first time.

He then goes on to point out:

Thus, this line of reasoning gives me yet another reason to oppose proprietary software: proprietary licensing is simply a valueless transaction. It creates a burden on society and gives no benefit, other than a financial one to those granted the monopoly over that particular software program. Unfortunately, there nevertheless remain many who want that level of control, because one fact cannot be denied: the profits are larger.

For example, Mårten Mikos recently argued in favor of these sorts of large profits. He claims that to "benefit massively from Open Source" (i.e., to get really rich), business models like “Open Core” are necessary. Mårten's argument, and indeed most pro-Open-Core arguments, rely on this following fundamental assumption: for FLOSS to be legitimate, it must allow for the same level of profits as proprietary software. This assumption, in my view, is faulty. It's always true that you can make bigger profits by ignoring morality. Factories can easily make more money by completely ignoring environmental issues; strip mining is always very profitable, after all. However, as a society, we've decided that the environment is worth protecting, so we have rules that do limit profit maximization because a more important goal is served.

This analysis is cognate with my recent post about the absence of billion-dollar turnover open source companies: the fact is, as a pure-play free software outfit, you just can't make so much money as you can with proprietary software, because you generally have to sell scarce things like people's time, and that doesn't scale.

But the implications of this point are much wider, I think.

As Kuhn emphasies:

I'll just never be fully comfortable with the idea that workers should get money for work they already did. Work is only valuable if it produces something new that didn't exist in the world before the work started, or solves a problem that had yet to be solved. Proprietary licensing and financial bets on market derivatives have something troubling in common: they can make a profit for someone without requiring that someone to do any new work. Any time a business moves away from actually producing something new of value for a real human being, I'll always question whether the business remains legitimate.

This idea of getting money for work already done is precisely how copyright is regarded these days. It's not enough for a creator to be paid once for his or her work: they want to be paid every time it is performed or copies made of performances.

So ingrained is this idea that anyone suggesting the contrary - like that doughty young Eleanor - is regarded as some kind of alien from another planet, and is mocked by those whose livelihoods depend upon this kind of entitlement economics.

But just as open source has cut down the fat profits of proprietary software companies, so eventually will the exorbitant profits of the media industry be cut back to reasonable levels based on how much work people do - because, as Kuhn notes, there really is no justification for anything more.

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