The CRN has an interesting section on the Top 25 IT Executives of 2004. Some names won’t be surprising: Steve Balmer (CEO of Microsoft) and Michael Dell (Chairman of Dell). However, one name may be somewhat surprising, especially to those not well acquainted with the field: Linus Torvalds (fellow of the Open Source Development Labs) comes in as the most influential executive in the computer-industry. Torvalds was also interviewed. Quoting from the article:
He’s neither a chief executive nor a chairman. He holds no executive title. And just last year, he accepted his first paying gig in the Linux industry that he founded.
Yet Linus Torvalds, the 34-year-old Finnish programmer and composer of the Linux kernel, is being honored as CRN’s most influential executive of 2004 because of his devotion to the Linux development process for nearly 15 years. It’s been a watershed year for Linux and the open-source movement, and Torvalds had a lot to do with it.
For Linus Torvalds, being in the industry is apparently a vocation, and not a profession. During a time when the Linux kernel has been under attacks by SCO — which has been illustrating the tragedy of the judicial commons by flooding it with baseless claims — Torvalds stepped down from his job with Transmeta, and took up an official position in the GNU/Linux community, serving as a fellow in the Open Source Development Labs.
The progress which the Linux kernel (current stable version: 2.6) has made has forced companies such as Sun Microsystems, Apple, and Microsoft to take notice and alter their business models. Whereas others rail against the “established” Operating System in the computer-world, Linus simply does his job and voluntary coordinates the production of a good kernel, produced via thousands of voluntary contributors. If you build it, they will come.
That is, if it
is deemed useful by them (the individuals). Despite the misguided ideology by some followers, who believe that software is a utility, and, like electricity, ought to be owned and regulated for the public good, not privately owned by a handful of capitalists
, neither Torvalds, nor the Open Source Software or Free Software movements, qua those movements, are about regulation of or interveneion in the free market.
Rather, these movements operate within the free market. While some of the individuals who consider themselves a part of the FS/OSS movement advocate State-intervention in the affairs of Microsoft, many of them do not, and most of them focus their actions on producing something of value. They have wisely chosen to avoid the political (parasitic) means of obtaining their ends. Rather, they have noticed certain facts about the software industry that they dislike, and have acted peacefully to change them and produce alternatives. What most FS/OSS developers tend to dislike about the software industry is the closed proprietary nature of development. Traditionally, development and code were open and available for all to see. Others simply feel that the open development method is superior for practical purposes.
What is interesting is that an order has been established without any State intervention. There are standards. Linus’ vanilla kernel is considered the standard by the GNU/Linux community. There are various spin-offs of that standard, but everything is benchmarked against that standard. The position was not obtained by force or bullying. Rather, it is the result of completely voluntary interaction. Namely, the superiority of Linus’ judgement in matters regarding the Linux kernel has become widely known. He’s established a brand name, so to speak.
So, how is it that anything gets done with regards to the Linux kernel? Just like any other social net where the State has not intervene, results come from the voluntary interactions of individuals. Developers work on the Linux kernel because that’s their highest ranked alternative. How is it that improvements are made? How, that is, are priorities set? Firstly, developers do receive the benefit of prices. Companies like RedHat pay developers to work on the features that their customers have deemed the most important. Through an intermediated process, there is a profits-and-losses test.
Of course, many developers are not paid for their contribution to the Linux kernel. Why do they do it, and how do they prioritize? They may participate for the following reasons: (1) They enjoy doing so; (2) They use the features that they make; (3) To establish reputation. The prioritize by personal preferences. Does the developer prefer to work on a fundamental technical issue, such as improving stability performance, or security? Or do they want to work on a fundamental user-issue, such as improving learnability and useability? Or do they want to simply add new features? Or do they want to cease their involement and do something else? It is personal preference, rankings on their value scale. They make use prices and wages to determine how much time they’ll devote to something that won’t bring them any monetary profit. The decisions of those also seeking reputation may be affected by anticipated reaction. Those writing code for the Linux kernel are at liberty to write anything they want. However, a piece of code that makes the Linux kernel start a microwave isn’t going to be accepted by Linus; thus, it won’t be in the standard “vanilla” kernel.
At the core of Linus’ development of the Linux kernel is the concept of private property. Namely, the right of an individual to decide what goes and what does not go into his version of a piece of software.
In conclusion, I think that the FS/OSS development model may be an interesting topic for analysis among Austrians. It is related to one of the questions that some Austrians have been concerned with: can non-profit organizations operate efficiently?
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Perhaps I misunderstand the problem, but it seems clear to me that a nno-profit organization can operate efficiently. The chief problem is one of accounting: the outputs of an NPO aren’t objectively comparable with the inputs.
But they don’t need to be objectively comparable. All that matters is that the donors subjectively prefer the outputs to the inputs. If an NPO provides a schedule of sorts that says, for example, that $100 will allow them to do this, or that eight hours of volunteer work will allow them to do that, then donors can judge how best to use their resources. If it costs charity A $100 to do what B can do for $75, then my money flows to B. Or maybe there’s some other use for my money that I rank higher; I’ll do that instead.
Unfortunately, this isn’t quite as useful for NPOs that do, for example, medical research, but monetary accounting breaks down here, too. There’s really no way to determine which, if any, company will be first to market with a new cure, so investing in biotech stocks is inherently risky. By the same token, so is “investing” in nonprofit research. There’s a real risk that your donations will produce nothing of value, and it’s not always possible to gauge that risk. However, in the long run I would expect donations to flow towards NPOs with track records of producing results.
Just as investors tend to seek out investments that maximize their monetary returns, donors tend to seek out causes that maximize the positive impact of their donations. Ideally, that is. Unfortunately, many people seem to make bad donations even more often than they buy bad stocks.
I believe the “non-profit” idea does not fit. There is profit, on several levels.
First and foremost, there is the profit that the individual developer sees in improving the product for themselves. It works better for them, so by “scratching their itch” their life is improved. To put it in Mises terms, They “relieve unease” by making a better application.
The individual programmer gets to practice their skills, examine how the software functions, and build upon the work of masters the same way that all “science” and “art” has been taught. “We” are not continually re-inventing the wheel.
By sending their improvements “upstream”, their changes can be included in the original source if it is deemed worthy by the individual or community that maintains that product. The individual contributor has their name attached to that change, and they gain renown with their contributions.
That renown can be traded for employment. An employer will look upon successful contributions as a demonstration of programming skill. Thus a professional programmer can have a much wider experience pool to offer to a prospective employer than they would otherwise have.
Lastly, if an individual is not interested, they do not interact. The “barrier to leaving” does not exist, except in the special case of a programmer of high renown who may lose that renown if they decide to call it quits. Even Linus has said repeatedly that he works on the Linux kernel because it is interesting to him to do so, and he will cease when it is no longer interesting.
Just because money is not changing hands does not mean there is no economy being demonstrated.
I recommend to all readers, and Mr. Heinrich since it seems he hasn’t seen it yet, Eric S. Raymond’s book, _The Cathedral And The Bazzar_, available online for free at http://www.catb.org/~esr/writings/cathedral-bazaar/
Curt,
Thanks for the comments, though I think that is kind of what I was saying. But if you use that broad definition for “profit”, then what doesn’t fall under it? When you say “non-profit”, you usually mean “not in exchange for monetary compensation”.
Thanks for the link to Eric S. Raymond’s book. I’ve rea Raymond is great. I’ve read some of works, but wasn’t aware that Cathedral and Bazaar was available online. It is interesting as a note that he is basically anarcho-capitalist. He has a very thorough understanding of economics.
David, I agree you were talking about non-monetary profits, but Brandon seems to have gotten that confused. Thus my reiteration.
I found ESR’s writings at about the same time that I found mises.org and the books like _Human Action_. The “economic” interactions between the members of the Open Source community was obvious, but it all hinges on the voluntary nature of that interaction.
It’s also important to note that the “Linux” kernel is only one project, and not even the biggest one. There are many tens of thousands of different Open Source projects, every one of them function in much the same way as the Linux kernel, by completely voluntary interaction by interested individuals. Conflicts are resolved peacefully, even if it involves “secession” where an individual or team will take the program in a new direction.
No one loses because there is no scarcity of the programs themselves. The scarcity is in talent and interest.
Enough musing, I’m wasting bits.
Actually, the topic of whether or not non-profits can rationally allocate resources is a concept that Rothbard said needed more exploring. I am not sure if there has been any conclusive economic analysis on this topic since he said this in one of his speeches.
I believe that non-profits lack the profit/loss test of for profit firms, but it does not really matter. Just as Brandon said, all that matters is that the donors subjectively value the outputs of the non-profit more than they value what they donated to it.
Ah, gotcha. ESR’s definately great. He has an interesting piece on the term “Open Source Software”, as opposed to “Free Software”, in which he takes the opposite position of Stallman. I’m not sure I agree with either of them. Both terms are ambiguous. A more appropriate term would be “Liberty Software” or “Freedom Software” for the FSF (though, from a collaboration with Richard Stallman, apparently, both of those names are trademarks). The OSI is in a more difficult position, because they’re trying to ease concerns of businesses.
David, I wouldn’t call ESR “great”, he went pragmatic concerning the 2004 presidential election. I guess everyone has a breaking point, when principle gives way to expedience.
But he is quite good, and very knowledgable within his sphere of expertise. And, mostly anarcho-capitalist.
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