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Date:      Mon, 23 Apr 2001 18:05:24 -0500
From:      Mike Meyer <mwm@mired.org>
To:        Terry Lambert <tlambert@primenet.com>
Cc:        trevor@jpj.net (Trevor Johnson), freebsd-chat@FreeBSD.ORG
Subject:   Re: Stallman now claims authorship of Linux
Message-ID:  <15076.46388.474577.263232@guru.mired.org>
In-Reply-To: <200104232112.OAA25946@usr07.primenet.com>
References:  <15073.23492.944973.214417@guru.mired.org> <200104232112.OAA25946@usr07.primenet.com>

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Terry Lambert <tlambert@primenet.com> types:
> > > > > Yes.  I can categorically state that your proposed revenue
> > > > > models require input proportional to the revenue they
> > > > > generate, whereas proprietary software models have revenue
> > > > > which is based on market valuation, not on effort input,
> > > > > and that the difference between those two values is the
> > > > > amount of money you can show as profit for shareholders,
> > > > > as well as applying to R&D costs.
> > > > 
> > > > That adjective "effort" hides a multitude of sins. All the models have
> > > > a gross profit based on market valuation. In the proprietary software
> > > > model, the effort input is part of the fixed costs, not the per-unit
> > > > costs. GPL'd software has the restriction that the per-unit price
> > > > can't be raised to arbitrary multiples of the per-unit cost, which
> > > > makes it resemble most other products.
> > > I don't understand your use of the word "sin" here.
> > Basically, that you're changing the definition of the "input" by
> > restricting it to "effort". That's simply playing word games.
> In the limit, it's human effort input.  I think you are also
> missing the point, which is that once software has been GPL'ed,
> it ceases to have economic potential.  Software under that
> license ceases to have a market valuation, since I can demand
> source code while giving nothing in return.

Assuming we mean the same thing by the terms, such software indeed has
zero market valuation. However, it can still have an economic
potential that justifies the funding the development. To use a classic
example, a program that allows me to accurately predict whether or not
a super- or hyper-sonic airframe will explode at speed has a potential
savings of several times the cost of building a wind tunnel capable of
determining the same thing, as the cost of rebuilding the wind tunnel
after getting a "yes" answer is most of the cost of constructing it in
the first place.

> > > Patent and copyright protection also permits the per-unit price to
> > > be raised to arbitrary multiples of the per-unit cost.
> > That should be preceeded by "both", as the issue at hand is really
> > copyright. The GPL simply prevents authors modifying GPL'ed software
> > from using the copyright monopoly to advance their goals. Then again,
> > the GPL is using the copyright monopoly to advance goals of the
> > original author.
> Actually, it's using it as an instrumentality of the GNU manifesto,
> to advance the goals of Richard Stallman, as put forth in that
> manifesto.

Only if you are foolish enough to believe that everyone who puts their
software under the GPL does so without realizing that it means the
code can no longer be sold commercially for profit. If you were
watching free software in the late 70s and early 80s, you saw a *lot*
of software come out either with licenses that said "I own this
code. You can do whatever you want with it so long as you don't make
money" or "This code is in the public domain. Not for commercial use"
(ok, anyone who does that could probably be easily duped, but they
still want what the GPL provides).

The GPL succeeds not because authors of free software are a bunch of
idiots that RMS has duped, but because it provides exactly what those
authors want with the authority of having been written by an expert on
legal matters.

Personally, I figure if I've gotten the compensation I want for a
program and am giving it away, then anyone who can use it commercially
has my blessing - so long as I get credit for it. I usually ask for a
copy of the product as lagniappe.

> > > I think the thing you are apparently refusing to factor in is that
> > > the labor itself is not based on the per-unit *value*.
> > No, I'm aware of that. It's just part of the overhead.
> You are arguing that it is impossible to build monuments with
> lasting value.  I would argue that the Internet itself is
> entirely based on code that was capable of being commercialized,
> and were it not for the fact that companies like Cisco, IBM,
> etc. were able to commercialize the code, they would have used
> different code which they _could_ commercialize, and we might
> be using XNS of IPX instead of IP.

No, I'm arguing that you can build a lasting monument without having
to have the right to sell the monument. The R&D for the code that you
named above was all done without being able to sell it at the end as a
requirement. That it could then be used as you described is certainly
an advantage.

You might also note that the existence of free competition didn't stop
any of those companies from developing a product that used the code in
question. In the case of Cisco, the code being GPL'ed might not have
meant anything to them. They sell routers, not software. The R&D for a
router includes some software that they might have to surrender to the
competition, but it's not clear that this provides any advantage to
the competition - unless they're going to install the software on
routers they bought from Cisco, in which case they're just doing
marketing for Cisco.

Cisco is a perfect example of focusing on selling solutions - in this
case, high-quality routers - instead of selling software.

> > > What this means is that a J.D. Salinger may have only 6 good
> > > Novels in him to be written in his lifetime.  The money he
> > > makes must therefore be 1/6th of the money he requires as his
> > > total lifetime income, in order to encourage him to write them.
> > 
> > This has at least three assumptions that you need to prove. One is
> > that he had no other means of income, as otherwise you've placed the
> > value to high.
> 
> I think perhaps you aren't familiar with Salinger's life.  He has
> been a professional writer throughout his adult life.  After
> leaving the army in November of 1945, he really had no other source
> of income.  Even before that, he was a prolific short story author,
> making hist first sale shortly after turning 21.

In other words, he had other income before he started wriging, so
you've placed the value to high.

> > Second is that he wouldn't have written them unless he
> > were paid for them.
> It was his _profession_.  This is the problem with the GNU
> Manifesto: it claims that people will create for the act itself,
> and that they need not be paid professionals.  In other words,
> it calls for the death of the professional software engineer.

Well, the GNU Manifesto is as wrong as anyone who claims that the only
way you get software developed professionally is if you can get a
monopoly on the sale of the software.

> > Harlan Ellison's description of the typical writer
> > discovering that you can sell your writings - "You go from writing
> > stories and stuffing the paper into the wall for insulation to writing
> > stories, selling them and stuffing the money into the wall for
> > insulation" (roughly - again, my books are pretty much all in story)
> > tends to indicate that that is false for at least some authors, so may
> > be false for this one.
> The point is that not being paid for the work, a great author
> could only dedicate a portion of their time to the creative
> act.  You are effectively claiming that everything that needs
> to be written, could be written amatuer hobbiests.

No, I'm claiming there are other ways to pay professionals authors
than by providing them a monopoly on the sale of their product. I
can't really speak to writing fiction, as I'm not familiar with the
field. Last time I checked, most software was *not* written so it
could be sold under that monopoly, but was written for use in a
product (like Cisco) or for use inhouse.

> Looking at
> the GPL'ed code in Linux and (much worse) Fetchmail, I pretty
> much have to say it's generally uninspired, and lacks professional
> consistency.  Some of these arguments can be leveled at FreeBSD
> code, as well, but a significant fraction of FreeBSD was written
> by professionals, being paid to write the code.

Gee, and then they gave the code away. What happened to giving code
away resulting in unprofessional code, or driving software authors to
penury?

> > Finally, assuming those two things are true,
> > you are assuming the only way of providing that income is via the
> > copyright monopoly.
> Actually, I believe it was Thomas Jefferson who penned that part
> of the U.S. Constitution.
> 
> The copyright and patent "monopolies" exist because they are the
> best way we have come up with so far to encourage progress in
> the useful arts and sciences.

New Zealand did a study in the mid 70s about patent issues. Their
conclusion was that patent protection did nothing to encourage
progress in the useful arts and sciences, and actually had a negative
impact on their economy. The impact was so small that the cost of
eliminating the patent protection wouldn't be recovered for centuries,
so they recommended leaving it in place anyway.

My studies of copyright issue and software indicate pretty much the
same thing, but they aren't so formal.

> If they didn't exist, the U.S. would not be the sole remaining
> superpower.

True - others countries would have been able to use that technology to
improve their own economies, in some cases resulting in countries that
are currently fourth world poverties competing with us as superpowers.

> > > > I can't argue that there are times when GPL'ed code isn't desirable.
> > > Thank you.
> > That doesn't mean that aren't times when it isn't a problem,
> > either. It exists, and any business plan that doesn't include it isn't
> > dealing with reality. Business plans that don't deal with reality have
> > a habit of failing.
> GPL'ed code is only useful for tactical problems.  Strategic
> code is the value of your business.  If you gave it away under
> the GPL, your software business would lack value.

That's only true if your business is selling software. If you are in
the business of selling solutions - which is, after all, what people
buy - then it's a strategic part of your business. Witness TiVo.

> You could argue that the software is ancillary, and that a
> company should sell widgets, with the software as an add-on.
> But down that road lies commoditization of your product,
> since a computer is a computer, and it is the software which
> makes it brilliant (or useless).

You can't make money as a software company without commoditization of
your product. If the software is the only thing in the product in
question, you also have to have a monopoly on the software.

> If I don't have a monopoly on the software, I don't have a
> monopoly on the widget business, since a competitor need only
> buy one of my widgets, and demand the software be given to them.

So long as they have to buy the widgets from you in the first place,
it doesn't matter. You're still selling widgets, and will probably be
more than happy to give them a bulk discount.

> > > This assumes that the person paying for the research is the researcher
> > > making the decision on the code base.
> > > 
> > > The researcher makes a decision based on information available
> > > at the time the decision must be made.
> > > 
> > > It is _completely unreasonable_ to expect a researcher to know
> > > all the details of the business operation, in the same way that
> > > it is _completely unreasonable_ to expect a business person to
> > > know all the details of the research operation.
> > > 
> > > You are totally ignoring the concept of seperation of roles.  A
> > > single person simply _can not_ know everything.
> > 
> > True. But the GPL isn't the only thing that can cause problems like
> > this.
> 
> Correct.  To succeed in business, you must jetison everything
> that causes problems like this; so jettisoning the GPL is
> necessary, but not sufficient.

Nobody is forcing any business to use the GPL. Of course, competing
with free software can be a problem.

> > If some business model is critical to funding the research, then
> > it becomes part of the research problem. It's the buinsess person's
> > responsibility to see that the researcher has all the information
> > relevant to solving the problem. If they fail to provide that
> > information, then they have only themselves to blame if the solution
> > provided doesn't handle that criteria.
> 
> Research needs to be portable to products, or business will not
> fund it.

Yup. Of course, being portable to products doesn't mean you need to be
able to sell the products to make a profit. If it does, then your
statement is false, as business will fund research that shows a
promise of seriously reducing the production costs.

> > > So do I.  So I weigh the costs of extending OpenOffice (really,
> > > writing the thing, since it's so inferior to the Microsoft
> > > equivalents), and I find that it costs me significantly less to
> > > just buy the Microsoft software instead.
> > Quite right. No single business model is applicable to all
> > situations. Trying to force fit one business model onto all situations
> > is an idiotic thing to do. But that's exactly what claims like
> > "Without copyright, nobody would write software because they couldn't
> > sell it" do.
> I never claimed that "nobody would write software": you would
> still have plenty of unprofessional amatuer programmers.

So you're claiming that nobody would write software professionally
because they couldn't sell it. You're still trying to force fit one
business model on all situations, which is an idiotic thing to do.

If a company has to have professional-quality software to put in their
product, they'll write it. Even if they have to give the results away
to their competition. Otherwise, they don't have a product.

> > > It has nothing to do with "the microsoft virus", as you call it:
> > > it has to do with business not operating in a vacuum.  The vast
> > > majority of the business software space is Microsoft.  If software
> > > doesn't interoperate, then it's just wasted space on the hard
> > > drive.
> > That *is* the Microsoft virus. Their software is designed to make
> > others have to buy Microsoft products. Virus may not be the
> > biologically correct phrase, but it's certainly some form of disease
> > or parasite.
> Oh well.  Whether you like it or not, most people could really
> care less about what they are running.  What they want is to be
> able to hire someone off the street, and have them immediately
> be productive with the applicaitons they are expected to use. No
> one is really trained up on "OpenOffice".  Per seat training
> costs can go as high as $2,500.

Yup - the MicroSoft virus has been *much* more successful than the
GPL.

> > I never said it was a business that was guaranteed to work. Then
> > again, if I had a business that was guaranteed to work, I wouldn't be
> > wasting time on freebsd mailling lists.
> > 
> > If you want to quibble at terminology and claim that having to give
> > away the source for the software in your pretty packaged box means you
> > aren't a software company, no problem. You now own a company that
> > generates revenue by writing and selling software products, but it
> > isn't a software company.
> That's so wrong.  Once I sell one, I can never sell another, unless
> your base assumption is that people are morons.

No, the base assumption is that people actually see value in things
like a properly printed manual, support and other things you may well
be able to put in the box besides software.
				
> > > > > > Since many of them do manage to retire as a result of the rewards
> > > > > > of their efforts, I'd say your final conclusion is false.
> > > > > "Many" != "vast majority".
> > > > Right - not everyone working under those conditions manage to retire
> > > > etc. Most startups fail, so their owners don't get to retire that way
> > > > either. Your conclusion is still false.
> > > How so?  My conclusion was that there was an exception to your
> > > conclusion, and therefore your conclusion was false.  How is it
> > > that your conclusion is still right, even after I have demonstrated
> > > a case where it isn't?
> > 
> > Because I didn't make a universal claim, you did. You effectively said
> > "you can't retire under these conditions". A single counterexample
> > invalidates that.  I provided a class of counterexamples, and hence
> > concluded "you can retire under those conditions." You've shown that
> > some members of that class don't retire under those conditions, but to
> > invalidate my claim you need to show that *no* members of the class
> > can retire under those conditions.
> How about "You can't retire to Palo Alto, California without several
> million dollars"; is that better?

I'd certainly agree to that. Last time I priced empty lots there, I
couldn't find one for less than a quarter of a million dollars. Of
course, most of the people in the US can't afford to live there
anyway, so the point is moot for them.

> Effectively, I can't retire at my current income level on anything
> less than ~$3.5 million, and if I want to support COLA and inflation
> adjustments, we are talking closer to $5M.

Building that much savings over the course of 10 to 20 years at the
income levels required to live in Palo Alto should be pretty
straightforward. When I still planned on living in the Bay Area, my
retiremenat plan was targeted at about US$4M in 20 years. All of it
based on my paltry consulting fees and my wife's wage-slave
salary. Those two together did give us a household income larger than
95% of the households in the US according to the '90 census data,
which is pretty much required to live in a five bedroom house in Palo
Alto, much less target that kind of retirement fund.

Frankly, I'd rather have that kind of retirement plan than one that
depended on creating a successful software company. While the
potential payout isn't as large, the chances of reaching my goals are
better. If you're currently living beyond your means and hoping that your
software business will rescue you - you're retirement planning pretty
much sucks. I'd rate it as slightly better than buying lottery
tickets.

> So perhaps, if everyone retired to a trailer park in the
> South-Eastern U.S., you could make your retirement claim stick.
> Perhaps we should add a desirability factor for such a retirement.

Well, my parents - with that union pension and a bit of intelligence -
do spend a lot of time in trailers, as they travel about half the
year. But they own a couple of acres as well as their house, and
generate extra retirement income by selling the right to grow various
crops on part of it or extract oil from other it.

	<mike
--
Mike Meyer <mwm@mired.org>			http://www.mired.org/home/mwm/
Independent WWW/Perforce/FreeBSD/Unix consultant, email for more information.

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