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FLOSS Will Not Fail — A Rebuttal to Richard Epstein

Written by Darrell Anderson.

In October of 2004, law professor Richard Epstein wrote a commentary at The Financial Times (reproduced here) predicting that the concept of free/libre and open source software (FLOSS) would fail.[1] He argued that the FLOSS concept is unsustainable.

The words free software as defined by Richard Stallman and his colleagues at the Free Software Foundation satisfy four criteria:[2]

Everyone is free to:

  1. Use the software for any purpose.
  2. Examine the software source code.
  3. Modify the software source code.
  4. Distribute the software, modified or unmodified, to other people.

Eric Raymond and his colleagues at the Open Source Initiative define open source software as a development model.[3] Whereas free software is a philosophical concept about how the ideas and knowledge contained within software should be distributed, the two concepts are not necessarily the same. The goal of the people originating these definitions is the same — to openly and freely share software.

Professor Epstein wrote to a specific target audience — the subscribers of The Financial Times. Those readers are investors, people who seek information to help them move money to make money. That is, they are people who use various elements of the social, legal, and economic system to increase their exchange power through a common medium of exchange.

As FLOSS becomes more popular, investors seek information about FLOSS that might affect their way of life. A primary concern is that investors cannot profit by giving away a free product.

Subscribers and readers of The Financial Times do not want the status quo disrupted and FLOSS seems to contain “menacing” elements. Investors possess a vested interest in defeating any idea that people “give away” the products of their labor. People sharing their knowledge in such a manner seem to jeopardize investments.

* * *

Professor Epstein mentioned the hotly debated concept of “intellectual property.” Through the concept of intellectual property people treat knowledge as a physically scarce resource. People do this to create additional avenues through which they can provide goods and services. A primary goal within the modern exchange system is to leverage a high exchange power.

Physical resources are subject to the principle of scarcity. Scarcity can be artificially manipulated. Creating artificial scarcity often improves exchange power. Knowledge, however, is unlimited and renewable. Knowledge is a reasonably authenticated accumulation of interpretations about that which exists. Only through manipulation can knowledge be treated as a scarce resource.

Computer software today often is protected through the concept of copyright. FLOSS proponents do not deny or forbid the concept of copyrights. Indeed, the movement inherently depends upon and maintains the concept. FLOSS supporters differ only about the manner in which software copyright holders choose to exercise their rights. They embrace the idea that software is a structured collection of knowledge and that knowledge should be shared with one another. They believe software is a means to end. Sharing software benefits all of humanity. Sharing knowledge benefits all people rather than a privileged few. This concept is known as mutual aid and cooperation.

Although the concept of copyright serves some social benefit, overwhelmingly the concept has been twistified, distorted, and politicized. The politicized concept of intellectual property has become an avenue for creating artificial scarcity. FLOSS proponents reject that process.

Artificial scarcities create many imbalances within modern social systems. Scientists and technologists have continually reduced the costs of production and distribution within the exchange economy. Computers and related software become more important in this overall process. As efficiency necessarily decreases profits, controlling knowledge and information becomes a bigger factor in controlling those processes. Thus, to sustain high exchange power and profits, some people try to control the information through which people produce and distribute the products of their labor. They have a vested interest in treating software as a tangible, exhaustible resource rather than as knowledge. Because knowledge is unlimited, these people devise ways to treat information as a scarce resource.

FLOSS proponents reject the concept that vested interests should be allowed to manipulate the information contained within software so as to create and sustain unnecessary artificial scarcity for exclusive benefit.

* * *

Professor Epstein laid a foundation based upon the concept of intellectual property. He asked how intellectual property is created but never answered his own question.

Professor Epstein failed to define vague words such as “right” and “left,” “socialist” and “libertarian.” Without definitions he failed to promote meaningful debate because there is no common foundation for people to discuss the topic.

Hot words tend to impede discourse. Charged words such as libertarian and socialist tend to establish an emotional cornerstone for arguments rather than discuss the merits of an idea. Many people associate the word socialism as being antagonistic to libertarianism. Many people tend to incorrectly associate capitalism with libertarianism versus socialism. Professor Epstein’s target audience, people who move money to make money, fundamentally are “capitalists,” although many investors probably cannot provide a meaningful definition of the word capital. He incorrectly equated FLOSS to his undefined but assumed definition of socialism. Through the nature of these assumptions, he implied that the concept of sharing resources threatens the status quo and especially his target audience — investors.

The classical definitions of socialism and libertarianism embrace the same social outcome. Both philosophies embrace the concepts of free association and voluntary exchange. Both philosophies embrace the concepts of persuasion and cooperation. Both philosophies oppose the politicization of social systems. Politicization creates a social system of privilege, a system based upon force and coercion and ultimately the threat of violence. Both classical socialism and libertarianism oppose politicization and privilege.

The modern concept of intellectual property has little to do with creating a healthier world for everyone and has everything to do with politicizing the concept of copyright in order to create artificial scarcity and perpetuate the ability to move money to make money.

* * *

Professor Epstein provided his interpretation of how the free and open source process functions and argued that the idea is based upon three concepts:

  1. Everyone has open access to source code. This approach allows anyone to modify the code for whatever reason, but usually to improve the code.
  2. When an individual uses previously declared open source code, then the license affecting that original code also affects the code the individual creates or modifies. Professor Epstein wrote that this individual “cannot charge others for its use or restrict them from making further modifications of the program.”
  3. Each individual participating in this process becomes a licensee and agrees to adopt this license approach toward sharing the affected software.

In the first tenet Professor Epstein correctly summarized the definition of free software.

In the second tenet Professor Epstein incorrectly assessed the effects of the GNU Public License (GPL).[4] People can charge whatever they want for the software they write or distribute. This is the essence of the often misinterpreted “free as in speech not free as in beer” slogan so popular within the FLOSS community. That is, the essence of free software is the software code is freely distributable. The value and services rendered on top of or through that code is a different subject and not part of the equation. The sky is the limit for how much one charges for value-added services.

Consider a simple analogy.

There are thousands of books, essays, articles, and treatises written about carpentry and building a house. The same foundational information and knowledge is circulated continually. What changes is the packaging of that information as well as the addition of new knowledge. FLOSS proponents believe that software should be treated the same. That is, the information and knowledge contained in software should be freely available to all. People who decide not to become subject matter experts, however, should be willing to contractually exchange with other people who possess the skills and knowledge to package software in a useful manner. The processes are the same. Nothing stops an individual from becoming a self-serving software programmer just as nothing stops an individual from becoming a self-serving carpenter. Nothing stops an individual from repackaging existing knowledge or adding new knowledge. Yet, just as many people do not possess the time or desire to become carpenters, many do not possess the time or desire to become software programmers.

The GPL allows people to make a living from the value they add to freely available software but protects the software. The GPL only prohibits participants from placing restrictions on the source code and modifying the original license. Within that agreement there are no restrictions on modifying code. Thus, computer professionals can contract their skills to provide other people software solutions through modified open source code. Clients realize they do not own the code and cannot restrict anyone else from using that code for the simple reason that they do not possess title. Nonetheless, clients receive the benefits of the original code as well as the value added by the modifications, often at a substantially reduced cost. Everybody wins. Clients buy solutions derived from knowledge, not the knowledge itself.

Professor Epstein failed to articulate the process of how free and open source software is shared and distributed. There is plenty of money to be made while sharing software code. People have been repackaging and modifying other information in this same manner for generations.

The third tenet of Professor Epstein’s argument is misleading. The GPL is not a contract transferring title. The GPL is a license defining usage. Title remains with the titleholders.

A license defines usage rights while maintaining title. An essential element of the GPL is no individual is required to use software code licensed under the GPL. There is no force and coercion involved. An individual is free to write new code from scratch and thereafter possess and maintain full copyrights to the product of their labor. However, if an individual decides to use GPL software code, then that individual does so voluntarily. The user accepts that title — the copyright — is not being transferred. Using that software is a conditional benefit offered by the titleholders.

Possibly the most powerful right any individual possesses within the context of a human social system is the right to forsake a right. Because no individual is coerced into accepting the terms of the GPL, every individual who accepts those terms necessarily relinquishes some rights in order to use the code in a freely distributive manner. People relinquish any claim to any code that they add to the existing code they use. This is a term of the license they voluntarily agreed to accept.

Because the GPL is a license, the only thing to which end-users agree is how they may use the property created and titled by others. If they agree to use the property as-is, they need do nothing except benefit from using the software. The license does not require anything in exchange for simply using the software.

However, if users decide to modify the software, they agree to the titleholder’s condition that they do so only if they submit their modifications back into the public domain. At best, the new users only become co-titleholders of the software along with dozens, hundreds, or thousands of other people. The more important point is that they knowingly and voluntarily accepted the terms under which they were allowed to modify the software.

Consider borrowing a lawn mower. You devise a way to operate the lawn mower more efficiently. Yet, you do not own the lawn mower. You only possess usage rights as directed to you by the titleholder. In this example, you likely would not modify the lawn mower without the owner’s permission, but even if you did, you retain no rights to those modifications because you do not possess title to the lawn mower.

The GPL goes one step further and declares that you are allowed to modify the property and need not ask for permission. However, because you are not the original titleholder of the code you modify, you have no standing to declare sole ownership and title to the modifications. You either accept those conditions or you do not.

The individual who adds or modifies code receives the benefit of using the original code. In exchange for that benefit, that individual agrees to distribute modifications to that code in the same manner received — openly and freely. An individual who modifies code does not forsake the right to continue using that code — a powerful social concept.

This process is not only a bona fide expression of property usage, but also a mutually beneficial and reciprocating relationship. Everybody gains under the terms of this license.

Professor Epstein failed to understand the foundations of FLOSS. The GPL requires voluntarily participating software developers to contribute to improving code in a manner that benefits all people. Everyone contributes and benefits to the overall knowledge pool. Everyone agrees that the purpose of the GPL is philosophical. The GPL does not forbid people from charging for the products produced with that code or the additional services rendered to modify, package, or distribute that software. The code itself, including additional code written or modifications made, remains freely available to all of humanity.

* * *

Professor Epstein argued that there are two potential weaknesses with the GPL. His first argument was that the GPL has not been tested within the legal system.

Is a social custom valid only within the context of a politicized legal system? Which comes first, the chicken or the egg? That is, is a legal system dependent upon social customs or vice-versa?

The GPL is based entirely upon full disclosure and voluntary participation. Skillful judges and attorneys might one day twistify the words and meaning of the GPL, but the basic tenets of the license remain open for all to inspect and understand. There is no intent to deceive, commit fraud, or coerce others into this social relationship.

Professor Epstein wrote that the “apparent intention of the provision is to ‘infect’ that new program so that all of its content becomes open source software subject to the GPL.” He would have done well to omit the word “apparent.” FLOSS proponents are honest about their intent — to share software code in order to benefit all of humanity rather than a privileged few. There is no scam here as Professor Epstein alludes.

There is no intent to “infect” proprietary or closed source code not licensed under the GPL. There is every intent to protect existing code licensed under the GPL.

Professor Epstein argued that theoretically, if people operating under the legal fiction known as Microsoft used GPL code, that that new collection of code would then operate under the terms of the GPL. He thought that judges would not support such an argument, but confused the essence of the GPL.

This is a straightforward licensing debate. Who possesses title to the original GPL software code? What are the usage terms of that license? Establish that foundation and all else falls into place.

People operating under the banner known as Microsoft may voluntarily use GPL code or they may reject the license and develop their own code. If, knowing the terms of the GPL, Microsoft people willfully used that code but protected their modified code, they would be guilty of deception.

The discussion is academic, however. Any such violation of the GPL is likely unenforceable in the politicized legal system for the simple reason that nobody would know. Closed source software is difficult to review without ingenious reverse engineering. One might suspect that the Microsoft people used GPL code, but how does one go about presenting minimal evidentiary support to convince a judge to accept a petition in court?

Suppose a judge nonetheless accepted such a petition. The only way to resolve the debate is for the Microsoft people to reveal their code. If the new program contained GPL code, then the judge could provide remedy. The only remedy possible, however, is already declared within the license: openly publish the modifications or revoke usage rights of the original code. The Microsoft people then would have to remove the GPL code from their product or disclose their entire code.

There probably is a simpler solution for protecting GPL code. Licenses are based upon voluntary relationships. So too can people voluntarily choose not to agree to a license. Enforcing the GPL likely never will be fought within the politicized legal system. The reason is straightforward. The GPL is a paradigm shift in social thinking. That is, GPL proponents have rejected the status quo. Why then would they seek relief and remedy within that environment? Perhaps instead they would ostracize suspected offenders. How? Through public exposure, reasoning, and boycott.

In large part people within the FLOSS community have already begun ostracizing people operating within the closed source world of software. Many proponents refuse to contractually exchange with people who fail to maintain software in an open source manner. This is the power of contracting. People possess the power to contract but also possess the power not to contract. The power of choice does not immediately put closed source vendors out of business, but practical economics eventually will win the debate. Professor Epstein failed to acknowledge this simple principle of human relationships.

Professor Epstein’s second argument about the alleged weakness of the GPL is that subsequent parties are likely to be without knowledge of previous exchanges that created GPL code. This argument also is academic. One is challenged to envision how this situation could develop in real life. People participating in the FLOSS community are purposely and carefully open about disclosing the terms under which they exchange and distribute software.

Professor Epstein forgot what the FLOSS movement is all about — open software code. That is, the code is always freely and openly reviewable. How can subsequent users of software code be without knowledge when the code is open to inspection? His alleged weakness might make sense in the world of closed software but never with open software.

What about people who possess no skills or knowledge to read source code? How are they to know the code they have obtained violates no other license agreements? The same way they do now — they hire subject matter experts to help. Or they sign contracts of indemnity. Thus, FLOSS changes little about the basic way humans exchange with one another. In practice, the idea that source code is openly reviewable creates knowable boundaries for everyone to operate. If anything, open source code removes barriers of the current privileged social and legal system and provides a saner world. Knowable boundaries reduce conflict. This alleged weakness is actually a strength.

* * *

Professor Epstein argued that the “difficulties with the open source movement . . . go deeper than the problems with a single provision of the GPL.” He then proceeded into the territory of “that dismal science” — economics.

He argued that the basic concepts of FLOSS are likely to fail because of similarities to worker’s communes. The basic argument for failure is that people within such an effort cannot scale output to meet their own successes. That is, each participant shares pro rata in collective output and eventually the process fails because of its own weight and momentum.

Additionally, Professor Epstein wondered what happens to an individual who decided to quit participation and wanted to “cash out” of the FLOSS environment. He argued that not only is there no mechanism available to “cash out,” but this inability would create large-scale tension and emotions because those who remain maintain all of the benefits of that individual’s labor. Professor Epstein’s proposed creating a “capital structure” upon which every participant possessed a share of the outcome. At this point, he argued, the structure of FLOSS becomes no different than a joint-stock company.

Professor Epstein presumed that the FLOSS community and worker’s communes are similar. They are not.

People participating within a worker’s commune equally share both knowledge and physical resources. A key distinction, however, is that knowledge is universally shareable by all people at all times. Knowledge is inexhaustible and reusable. Physical resources cannot be shared in such a manner. Once a physical resource is allocated and consumed that resource is no longer exchangeable or recyclable in original form. Thus, an individual could exit a worker’s commune with unlimited knowledge, but not so with physical resources.

Appreciate this distinction by recalling an old proverb. Share a fish and you feed an individual for a day. Teach the individual to fish and you feed that person for life. Sharing physical resources nourishes needs and wants on a daily basis. Sharing knowledge helps nourish needs and wants for a lifetime.

FLOSS is not about sharing limited physical resources but sharing unlimited knowledge. Software is not a physical resource but a structured collection of knowledge used to control and operate physical resources. Software is a means to an end and not the end. Thus, Professor Epstein’s argument failed simply because he equated knowledge — an intangible, inexhaustible resource — with tangible, exhaustible resources.

Consider another element of this discussion. Because software is knowledge, every individual who participates in sharing this knowledge receives a benefit. That is, they are always free to use that knowledge to improve their own life. They might have to contractually exchange with other people to receive software packaged in a useful manner, but the social paradigm embraced is that knowledge should benefit all people at all times and not just a privileged few.

Professor Epstein overlooked a more important element in his analogy. Every individual contributing to improving software code is already using the existing code as a means to improve his or her life. Everyone therefore possesses a naturally existing incentive to contribute to the process in order to benefit themselves further.

People use software in various ways to create exchange power for other goods and services they want to produce or obtain. Thus, software is not an end resource that is exhaustible and shared, but only a means to other resources that are exhaustible and not shared.

Thus, no incentive or motivation exists to “cash out.” This is a Chicken Little argument. Every individual participating in this process automatically benefits — forever. Because this relationship is entirely voluntarily, people can withdraw at any time. That is, they can stop contributing to the code base. Nonetheless, they would continue benefiting from using the existing code as well as from newer improvements because there is no limitation on pure usage. There are only limits on modifying and distributing the code and license. Everyone in the FLOSS community has already agreed that they will not stop anyone from using and benefiting from using such software code. From where then is resentment to be created? What is there to “cash out?” Unlike physical resources, anyone desiring to “cash out” possesses full access to all the software previously created in addition to all future improvements.

Professor Epstein tried to create an image where software developers create code for nothing in return. People use software from which they already benefit and will benefit even more if they possess the skills to improve the code. The benefits are never-ending. One is hard-pressed to find negative benefits to this entire process. People using free software never get less than they bargain for, but stand to gain more. Everybody wins. This is a fully reciprocating relationship. From where does one create a desire to “cash out”? There only exists incentive to “cash in.”

Software is not a tangible, exhaustible resource. What is tangible and exhaustible is the hardware upon which the software code depends, or the media through which the software is shared (and the cost of media today is almost negligible). Software, unlike physical resources, is not subject to the restraints of scarcity and decay. Software is knowledge and not subject to the rigid boundaries described by the Laws of Thermodynamics. The knowledge could one day be lost if the storage media containing the code decays, but as long as that process is avoided the knowledge lasts forever. Professor Epstein’s analogy fails.

* * *

Professor Epstein concluded his commentary by calling the FLOSS movement a “novel form of business association.” A short study of history negates the word “novel.” Throughout much of history, the most common form of mutual survival has been to share resources and knowledge. That is, communal living. Only in the past 300 years or so has individualism and proprietary ideas influenced social thinking. Overwhelmingly throughout human history mutual cooperation has been and continues to be the dominant means of survival. Indeed, a common sharing of knowledge fueled the great social explosion known as the Enlightenment.

The concept of sharing knowledge is as old as humanity. FLOSS has little to do with “business associations” and everything to do with human associations. Openly and voluntarily sharing knowledge benefits all of humanity. Political relationships benefit only those who wield the sword. Political relationships create a social system of status and privilege. Sharing knowledge creates a social structure of contract and cooperation.

Professor Epstein argued that the FLOSS idea should succeed or fail upon its own merits. FLOSS will succeed for the simple reason that everybody benefits. Computers now are an integral part of and influence much of our lives. Many people use computers for many reasons. Openly sharing and benefiting from shared source code — knowledge — only improves social structures and relationships.

At stake here is the concept of politicized intellectual property. People within the FLOSS community have rejected that concept. FLOSS proponents do not deny that they are the original copyright holders of software. They simply reject the concept that they should create a perpetual source of income by politicizing that social right. Proponents have declared that they want a more lucid model to guide social thinking. Nobody within the FLOSS community argues that people cannot make a living from the value they add to modifying, packaging, or distributing software code. They only argue that everybody benefits if the code itself is treated as knowledge rather than a tangible, exhaustible resource. To treat software as a tangible, exhaustible resource is an effort to deceptively create artificial scarcity benefiting only a privileged few — a throwback to the Dark Ages when knowledge was politically controlled.

Professor Epstein argued that the “do-or-die question is whether open source offers a low cost solution to particular problems.” The answer is obvious. The FLOSS model necessarily reduces costs because the politicization of knowledge no longer exists. Without that politicization artificial scarcity disappears. Eliminating artificial scarcity necessarily reduces the costs of production and distribution. There is still money to be made within the existing exchange system model — through the various ways people choose to modify, package, and distribute that information. FLOSS merely challenges the underlying social illusion that knowledge can be politicized and manipulated to benefit a privileged few.

The only way FLOSS can lose this social debate is if everyone embraces the illusion that a few people can legislate and regulate knowledge as a tangible, exhaustible resource. If everyone embraces the illusion that FLOSS can be declared “illegal,” then FLOSS might fail. However, as the internet continues to become more popular, and people continue to globally share ideas and knowledge, they become more informed. As they become more informed they learn the flaws of the current “just us” political system. They then will embrace FLOSS because they see the personal and global benefits.

However, we need not talk about the future of FLOSS in such a manner. People are already rejecting the old model of destructive, regulated, and privileged competition. They once again are embracing cooperative, mutually beneficial, reciprocating competition as our ancestors once did. For several generations people have been deceived into believing the political illusions of “dog eat dog.” People are rejecting those illusions and all within our own lifetime. What an exciting time to be alive!

FLOSS is not at stake. The argument is not that FLOSS is unsustainable but that the existing exchange system model is unsustainable. The existing model is based primarily upon coercive political privilege and artificial scarcity. FLOSS will succeed because everybody today has a vested interest in sharing knowledge. FLOSS will succeed because coercive political privilege and artificial scarcity are not a part of that model. FLOSS turns the current model upside down and inside out. FLOSS is already sustainable because everybody using that software benefits from that use. The continued use and attraction of new participants increases those already considerable benefits. FLOSS by its very nature is self-sustaining. At stake is the status quo of “just us.”

What should the readers at The Financial Times, those people who move money to make money and accepted Professor Epstein’s arguments, do about FLOSS? Invest in people who know how to write and package software. Invest in people who know how to package information and training based upon open source software. Invest in people who know how to use open source software to help humans become more efficient and productive. Opportunity knocks and there’s always money to be made by investing in new production.

Finis.

Please also read Why Free Software is Important.

Terms of Use

Endnotes

[1] Richard Epstein, “Why open source is unsustainable,” The Financial Times, October 21, 2004

[2] The Free Software Foundation, http://www.gnu.org/philosophy/free-sw.html

[3] The Open Source Initiative, http://www.opensource.org/.

[4] The GNU Public License, http://www.gnu.org/copyleft/gpl.html.