Free software, fairness and scientists

I have just posted my final blog posts to my Sun blog, including one called Free, the right price for software. (Now republished on this blog,as Free, the right price for software.) This uses a Welfare Economics approach to argue that the correct price for software is free. This is designed to be an abstract for an essay I have promised myself, which will also be the basis for my evidence to the UK Government Consultation on regulating and restricting file sharers. This article briefly looks at economic equity, efficiency and academic publication regimes.

Two points that I failed to put in the abstract, are firstly that economists see equity, as in fairness, as having two dimensions and that paying people with the same skills and abilities different amounts is inefficient and thus sub-optimal but arguing about the fairness of paying differently skilled people different amounts is the domain of politics. Efficiency tries to remove considerations of political equity from the model. It’d be interesting to see if this can be worked into the essay; why is Tom Cruise paid so much?

The second issue is that pure science research has to be published, peer-reviewed and refereed before it is adopted. Sharing knowledge for free is what professionals and scientists have been doing for years, why is software and the media any different. I hope to work these questions into the essay. …

Free, the right price for software

Economic systems are about how to use scarce resources and the Price Mechanism is the way in which a optimal resource allocation occurs. Economists use a branch of theory called “Welfare Economics” to analyse and model the efficiency of the productive economy, and a theoretically maximally efficient set of states can be defined within a model, known as the Pareto-efficiency frontier. A perfectly competitive market meets the efficiency requirements, imperfect or distorted markets do not. Distortions can be caused by the existence of monopolistic markets, taxation, externalities or missing markets.

Traditional Welfare economics rarely considers how copyright and patent law create barriers to entry to markets and thus husband the growth of monopolistic markets, where supply is restricted and prices driven up. It needs to be born in mind that overpricing products such as software which are inputs to the economic process as well as output, means that some otherwise efficient goods will not be produced; they cost too much.

It should also be born in mind that the majority of the world’s software is not licensed or charged for, although much of this free to use software is not traded at all, remaining the proprietary goods of their owners who use them to produce other goods and/or services. Benkler in his book, “the Wealth of Networks”, suggests there are nine business models for pursuing value in software, of which only three of them involve trading rights i.e. charging for software. If there was no software copyright i.e. copying was legal and free the only price, software would still be written. The overpricing of software distorts both today’s market and the innovation creating tomorrow’s. The price mechanism should ensure that resources that are scarce and consumed should be payed for. Software is not scarce, although the people that write it and the machines that run it are. Resources such as software should be free.

This was meant to be an essay based on some slides I have been trailing inside the company, but I discovered how hard it is and how much time it takes to actually put ideas into essay form while preparing the paper behind what became Monopoly & Prices, see below. So this is more of an abstract, I shall upload the essay when finished to my personal site downloads page.

Thanks once again to Beggs, Fischer and Dornbusch, whose Economics 8th Edition reminded me of my Welfare Economics.

ooOOOoo

This is a reprint of an article originally published on my sun blog. It was copied to this site on 3rd August 2013. much earlier than most. …

Are blogs losing their infuence?

Richard Morgan sent me this article, “Are Blogs Losing Their Authority To The Statusphere?” dated March 10th 2009, which argues that while blog authority ranking according to Technorati remains fairly static, the scores of the various blogs are declining. Technorati uses an inlist scoring algorithm which may be part of the problem, but it would seem to me that micro-blogging is impacting the strength of the voice of blogs as a communications tool, which is what the article argued. In some way’s not just micro-blogging, but the various places where people can and do record what they do and think. …  …

Monopoly and prices

Monopolies restrict supply and offer their goods at prices above equilibrium price, the opportunity cost of the resources used to make the goods. I am writing a short paper about this since it is a piece of thinking I revisited while developing my thoughts on free software, but is not central to those thoughts. There remain those who still think that monopolistic domination of markets is a legitimate business goal and that public policy and regulation should not inhibit this “free” market tendency. A review of the theory of the firm shows that monopolies restrict supply, raise prices and make super-profits. …

Back Online with BT Boadband

Since I need a new broadband connection, I have been struggling with BT’s home hub since last Wednesday, which is why this blog has been unavailable. I finally discovered that I had not correctly configured the bliki host’s gateway and dns server addresses. So despite being exceptionally cross with BT because no-one would help me, it turns out that it was all my fault, particularly since I ignored at least two people’s advice to check it. I used this site to organise my notes and asked for help at BT’s forums on a thread called port forwarding/http service. …

Little Big Adventure

I have been struggling to get VRDP from Virtual Box working on my home network, of which more maybe later, but I took a break to install one of the greatest games ever on the home machines with the help of my younger son. We finally found a copy of Little Big Adventure that’ll run on modern machines. This is hosted at LBA HQ. It runs native but recommends running under DosBox. So that is what I did… …