Bill Gates for Broken Windows

Slashdot is running a story today headlined Gates: Open Source Kills Jobs, riffing on a Gates speech given in Malaysia. Asia Computer Weekly has this quote from the speech:

If you don’t want to create jobs or intellectual property, then there is a tendency to develop open source. It is not something you do as a day job. If you want to give it away, you work on it at night.

Does Gates have a reasonable point? No. He’s retelling the parable of the broken windows (how appropos!), also known as the broken window fallacy.

In a nutshell, the fallacy says that breaking windows is good for the economy, as it creates the need for replacements, and thus “creates jobs.” This is of course nuts. At the end of the replacement process, we’re worse off by having consumed whatever resources it takes to produce a window and we can’t use those resources for whatever we would’ve used them for had the window remained intact. Presumably spending resources on windows isn’t our first choice, so we’re also worse off by whatever the “utility” difference between our first choice and windows.

Bill Gates is essentially making the same fallacious argument — if we didn’t have open source software we’d be better off, because we’d have to pay Microsoft to develop equivalents, and they’d hire people. That’s no different from saying we’d be better off with broken windows, because someone would get work creating replacements. If Gates’ fallacious argument is true, let’s destroy open source, and why not all software written in the past ten years. That’ll create a lot of jobs for programmers, right? (Actually, no it won’t.) Windows 3.1 wasn’t that bad. Let’s do it for the jobs!

One reason people sometimes buy the broken window fallacy is that they confuse the purpose of economic activity, which is to fulfill needs, i.e., to create wealth, not to create work. Software is wealth, and open source software is wealth available to anyone, to use, build upon, and learn from. If open source does put some Microsofties out of work, fine, we’d be better off with them doing something else anyway.

7 Responses

  1. The same fallacy is repeated in the preference for exports over imports, as if consumption were not the purpose of production.

  2. […] The Response. I enjoy calling out Gates’ idiocies as much as the next person, though much of the response I’ve seen has been a tad ebullient. Microsoft fans don’t create fascist art knockoffs when that company’s detractors incorrectly call it fascist. Glenn Otis Brown has the best response I’ve seen, posted on the Creative Commons weblog. […]

  3. […] Tim Lee points out a couple more cases where critics of open source use fallacious broken windows arguments. […]

  4. Alan says:

    Well, I guess Bill Gates knows plenty about broken windows – he’s produced plenty of broken software by that name.

    Some of the economic arguments are a little over my head (but I did do A-level Economics, albeit a long time ago, here in the UK), but I certainly would like to defend Open Source – I use a lot of it – Firefox, WordPress, Thunderbird and Nvu to name but a few.

  5. The Create Wealth From Home Guy says:

    The argument sounds spurious to me. But then again, bill will always see the world throught “Microsoft eyes”. The critical point is made that people do use their productive working hours to make stuff just to give it away. There is always an agenda, perhaps an upsell if you will.

    At the end of the day, we need both the open source to spur development as well as the pay per use stuff for those who just need to get the job done.


  6. […] Bill Gates for Broken Windows assumes Gates spoke of global welfare rather than from the perspective of an entrepreneur. The latter is both more charitable and more probable given Gates’ history. If one wants to run a business which holds intellectual property and employs people, open source is not the most obvious path, and that was much more true in 2004 than now. I also extrapolated from Gates’ assumed global welfare statement to an assumed ridiculous scenario in which we’d be better off if all software created in the previous 10 years disappeared. Disregarding the fantastic nature of the scenario, it could be that forced obsolescence of software, such as that encouraged by proprietary product cycles and business failings, is for the long-term good — so that we are not stuck with old, crufty software only used because everyone else is using it. If Gates were making a long-term global welfare claim, he just may have been correct, at least for software — and I won’t even bother to criticize my criticism based on criticism of the broken windows fallacy criticism. […]

  7. […] Microsoft CEO Bill Gates even went as far as to claim that open source responsible for the loss of jobs. He argued that people were basically […]

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