Richard Epstein’s open source leavings

Richard Epstein has an absolutely terrible column in the October 21 Financial Times: Why open source is unsustainable. Epstein begins with the oh-so-original observation that

Intellectual property often creates strange bedfellows on the left and the right sides of the political spectrum.

Left and right may not be the proper characterizations for those referred to, and the alliance isn’t at all strange — it reoccurs often when personal freedom, civil liberty, what have you is threatened. The war on drugs and war in general are two prime threats that motivate reasonable people to become “strange bedfellows.” Open source is perhaps slightly odd in that it is a uniting opportunity, rather than a threat.

On the left, many socialists oppose private property in all its forms.

Many? Possibly some Maoists or similar retreads, but then I’m not very familiar with hard core communist ideology, and those types aren’t very common these days. As far as I know most syndicalists or anti-market anarchists admit to some personal property. Run of the mill socialists certainly do not oppose private property in all its forms.

On the right, some libertarians, such as Tom Bell of Chapman Law School,

Right, schmight. Anyway, links to Tom W. Bell and his copyright writings. Also see Tom G. Palmer and Stephan Kinsella.

are deeply suspicious of the use of intellectual property to block the right of other individuals to think and speak as they choose. While they regard private property as acceptable for physical resources that cannot be used by everyone at once, they draw the line at intellectual property, which can be copied at close to zero cost.

Amazing common sense. Intellectual property (I prefer one of “intangible goods” or “intellectual protectionism”) is a taking of the rights of owners of tangible property, who are denied any use of their real property that infringes on the rights of IP owners.

All this anti-IP rhetoric begs one question: how do we produce IP in the first place?

A question sidestepped by Epstein for the remainder of the article. Aside: perhaps any issue that demands (or rather, for which some demand) government attention in some form — regulation, subsidy, prohibition, etc. — can be thought of as a public goods problem. However, just because something is a public good doesn’t mean that it is not also a private good — production of open source software being just one example. Lynne Kiesling has some musings along these lines, starting with electricity network reliability.

The middle part of Epstein’s column is a morass of classic fear, uncertainty, and doubt regarding open source software, all terribly uninformed. A few counters:

  • Open source does produce excellent non-server software. If you aren’t reading this in Mozilla Firefox chances are you’re missing out big time. Also see OpenOffice, the GIMP, the GNOME Desktop, Inkscape, Scribus, Eclipse and many more.
  • Individual hackers have been and always will be incredibly important and productive in ways Epstein and DeLong probably just don’t get, but open source is now integral to many of the largest for-profit software concerns (e.g., IBM and Oracle) and software consumers (e.g., Wall Street).
  • Even if they did hold water, a serious anti-open source commentator would not use anti-GPL arguments as the linchpin of their anti-open source argument. Three open source applications stand above all others in terms of market share: BIND, Sendmail, and Apache . None of these are GPL’d.

This quote from Epstein is good for a chuckle:

But how do the insiders, such as Linus Torvalds, cash out of the business that they built? And in the interim, how do they attract capital and personnel needed to expand the business? Traditional companies have evolved their capital structures for good reason.

Torvalds didn’t build a business, not that we have to worry about him eating. Rather than speculating in the abstract, Epstein should study how successful open source companies have actually expanded their businesses. And how and why traditional companies have seen it in their best interest to pay developers to work on open source.

So what does Epstein really want? That comes at the very end of his column:

But suppose this analysis is wrong. One clear policy implication remains: this novel form of business association should succeed or fail on its own merits. The do-or-die question is whether open source offers a low cost solution to particular problems. Ordinary companies will make just those calculations, but government agencies may be swayed to take a different tack, as has been suggested by a number of EU studies. That temptation should be avoided. Governments are bad at forcing technology by playing favourites. If open source is less effective than proprietary software, that gap should not be ignored by positing some positive network externalities that come from giving it a larger base. Proprietary systems also show positive network effects from increased users, as software designers are always attracted by a larger installed base. It’s a tough world out there, in which no one should be exempted from the general competitive pressures of the marketplace. The fiduciary duties of government to all citizens demand no less.

I love Epstein’s subtle abuse of the word implication.

I strongly agree that government is terrible at picking technology winners. That’s why I’ll probably vote against California’s stem cell research bond, despite being strongly in favor of any and all uses of fetal stem cells.

However, to the extent government is a technology consumer, it ought to be an intelligent consumer. Julian Sanchez made an excellent argument for open source in government — especially in government — two years ago in a column titled Open Source and Its Enemies:

With proprietary software, government’s potentially standard-setting procurement choices give it the role of market kingmaker.

A certain recipe for inefficient rent seeking behavior.

7 Responses

  1. […] In 2004 the above quote cries out for a response of “professor, what about open source?” However, I suspect that Olson thoroughly underestimates in general the extent to which private efforts motivated by private returns produce positive externalities, thus reducing the need for coercion. As I previously mentioned in an aside, the extent of private and public good co-production(?) is a crucial if unstated aspect of nearly any policy debate. […]

  2. Thanks for the link–but it’s Stephan not Stephen. SK

  3. Stephan,

    As it says in your domain name. Stupid mistake, corrected. Thanks.


  4. Karl Fogel says:

    Mike, for some bizarre reason, this post of yours just came up for me in a Google Alert today. Go figure. But seeing it, I thought you might enjoy my response to Epstein, which, pleasingly, the Financial Times selected as a reader response on their web site, linked to from the original article:


  5. Karl Fogel says:

    Heh, seems the FT is claiming copyright over my letter responding to Epstein, and that the link above might block some readers out. So I’ll cut and paste the response below, in part because I now want it to live somewhere other than the FT site — the FT is obviously not fit to be a good steward. For entertainment value, I’ll leave in place the bogus (and misdated) copyright notice FT put at the end, with its futile concluding plea. Perhaps I should retain Epstein to reestablish my copyright to my own letter?

    Free software makes social sense

    Published: November 10 2004 12:18 | Last updated: November 10 2004 12:18

    From Mr Karl Fogel.

    Sir, Richard Epstein (“Why open source is unsustainable”, October 21) writes as someone who has noticed the open source movement but not yet really understood it. He claims that “open source software relies on the very private property regime” that its supporters disdain, and that a popular open source licence supplies “an all-enveloping ownership structure in which a central committee decides whether to incorporate changes into the basic public program.”

    Leaving aside the loaded language (presumably meant to make readers think of Communist central committees), his claim is simply false. A basic tenet of all open source licences is that there is no centralised control over distribution: no central committee, no ownership in any meaningful sense of the word, no restrictions on sharing. Anyone, including Professor Epstein, is free to take any open source program and start distributing it with whatever improvements he chooses. He is free to become his own “central committee”, and others are free to choose his distribution over someone else’s. This arrangement completely avoids the usual monopolistic structure of intellectual property, an important point that Prof Epstein seems not to notice.

    Prof Epstein cautions governments against preferring open source software, yet neglects to address one of the principal reasons why they should prefer it. Much has been made (by Microsoft especially) of the concept of Total Cost of Ownership: the idea that, even if the software is free, there are hidden costs in training, maintenance and interoperability, and that these costs are lower with traditional proprietary software than with free software. But the question governments and businesses are increasingly asking themselves is not about Total Cost of Ownership, but about the Cost of Total Ownership: how much is it costing them to be totally owned by their software vendors? The problem is not just that they are asked to pay an upgrade tax to Bill Gates every few years; it’s also that they are locked into vendor-controlled data formats, so that users are forced to purchase particular pieces of software simply to communicate with each other. For governments, who must treat all their citizens equally, free software makes social sense: it allows everyone to use computer networks without giving one company or another undue influence over the very infrastructure of civic life.

    Prof Epstein is right that open source “should succeed or fail on its own merits”, and it will. But he must recognise those merits before he can analyse the movement and its future.

    Karl Fogel,

    Author, “Open Source Development with CVS” (Coriolis Press, 1999; Paraglyph Press 2003); “Producing Free Software: How to Manage Open Source Projects” (O’Reilly Media, forthcoming in 2005)

    Chicago, IL 60637,


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  6. […] Richard Epstein’s open source leavings weakly countered a column Why open source is unsustainable which ought to have been instead titled Why open source is non-scalable. Some open source software is produced, and even plays a significant role in industry — but where it has, is not novel — standards, consortia, and other inter-firm cooperation has been important since before computers existed. All ought be deeply skeptical of a methodology which demands universal application based on mere existence proof. Families, unions, and cooperatives do not support implementation of universal communism, nor do GNU/Linux, Apache, and TuxPaint support universal software freedom. There can be no doubt, excepting extreme critiques of all technology, that software has greatly improved human lives, and most of that software is proprietary. As for my claim that government is a kingmaker in technology markets, and therefore should mandate open source so as to avoid rent seeking — Epstein would surely say that the problem is too big government: fix that rather than adding yet another to its list of favored industries. […]

  7. […] interesting. I’ve mentioned before in passing that many political problems can be thought of as public goods […]

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