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 <title>Free World Notes
 - GNU Project - Free Software Foundation</title>
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 <h2>Free World Notes</h2>
 
 <address class="byline">by Tom Hull <a
 id="hull-rev" href="#hull"><sup>[*]</sup></a></address>
 
 <div class="infobox">
 <p>This page contains supplemental notes to the manifesto &ldquo;<a
 href="/philosophy/free-world.html">Only the Free World Can Stand Up to
 Microsoft</a>.&rdquo;</p>
 </div>
 <hr class="thin" />
 
 <p>
 In general, this critique reflects a more general line of thought,
 which is based on the recognition that the inefficiencies and ulterior
 motives in our current modes of production require much unnecessary
 work to produce products and services of often dubious merit for
 grossly inflated prices, effects which diminish the quality of our
 lives and the worth of our work. Nonetheless, my proposal here is not
 especially radical: it does not challenge the precepts of intellectual
 property; it requires no political action (not even the application of
 antitrust law); it can be initiated by a small group of people, and to
 some extent simply builds on work already done by various individuals
 and groups.</p>
 
 <p>
 Some paragraph notes:</p>
 
 <ol>
 <li>Commercial software companies typically divide their costs into
 several sectors: development; manufacturing; marketing/sales;
 service; general and administrative. Development costs are usually
 less than 20% of revenues. By far the largest cost is
 marketing/sales, so most of what the customer is actually paying for is the
 persuasion to convince the customer to pay so much for something
 that costs so little to develop, and practically nothing to
 reproduce and deliver.</li>
 
 <li>More expensive software often includes after-the-sale service,
 which should be considered a marketing/sales cost, since it props
 up an extravagant price structure. Service should be considered a
 separate cost, independent of development. Free software is always
 delivered with no service, and customers who need service can
 obtain help independently, since the inner workings of the software
 are public knowledge.</li>
 
 <li>Media companies have comparable cash flows, but necessarily work
 within the technical standards of their media. Consuming their
 products does not in any way prevent or even disincline one from
 consuming competitive products.</li>
 
 <li>Microsoft likes to expand its operating system to eliminate the
 market for add-on software, such as for disk compression and
 networking. Microsoft's claim that IE is part of the operating
 system is spectacularly spurious.</li>
 
 <li>Microsoft's dominance is at least partly due to the lack of any
 significant challengers. Apple and IBM used their operating systems
 to lock customers into their hardware, and would at any rate have
 been rejected by the rest of the PC industry, which at least with
 Microsoft got access to the same product. Unix vendors have stuck
 steadfastly to higher priced markets, avoiding direct competition,
 even though NT is aimed directly at destroying Unix. The longer
 Microsoft goes without serious competition, the harder it gets to
 mount any such competition.</li>
 
 <li>The last sentence is a slight exaggeration. Many capitalists do in
 fact realize that they will never be in the position to wield the
 sort of power that Microsoft commands, and as such have no use for
 the megalomania that goes with such power.</li>
 
 <li>The main point, however, is that under current circumstances no
 sane investor will directly challenge Microsoft. The cases in
 other industries where challenges are made to dominant companies
 depend on the discovery of some significant cost advantage (e.g.,
 MCI's challenge to AT&amp;T), but cost advantages are essentially
 impossible in software, unless you're willing to forego all your
 margin, a position no investor will take.</li>
 
 <li>Antitrust laws work more for the protection of other businesses
 than to protect consumer interests, although consumers generally
 do benefit from increased, more even handed competition, at least
 in the long run. In the short run consumers may benefit more from
 crippling price competition. Netscape, for example, having gained
 a dominant market share in its niche, still cannot raise its prices
 because of Microsoft's competition, which is a windfall of sorts
 for customers.</li>
 
 <li>We talk much about the advantages of &ldquo;letting the market
 decide,&rdquo; but most business activity is oriented toward rigging
 the market.  Look at any business plan and the key section will be
 something like &ldquo;Barriers to Competition,&rdquo; because
 competition kills profits, and successful companies are the ones that
 avoid competition, or at least are able to dictate its terms.</li>
 
 <li><p>The key thing here is that the free software must have at least the
 same level of quality and utility as the commercial software that
 it challenges, which means that it must be professionally designed
 and developed, tested and supported. Which means that free software
 must move well beyond its current niche as an academic hobby, to a
 point where it is supported by well-financed organizations that can
 attract and support quality workers.</p>
 
 <p>Of course, Microsoft (and all other commercial software companies
 so threatened) will do their best to compete with free software,
 and can be expected to do so as desperately as they compete with
 everything else. There will be many arguments floated as to why
 commercial software is better than free software. Many of these
 arguments are variations on the master salesman's boast that he can
 sell more $10 bills for $20 than a less convincing huckster can
 give away. Such arguments can be defeated by establishing that free
 software is quality software and makes sound economic sense. Some
 arguments are more substantial: commercial software companies have
 a huge head start; some such companies have convinced many users to
 trust their brands; the true costs of software include the time
 that it takes to learn and use, so no software is really cost-free;
 the investment that users and companies have in commercial software
 can make switching painful; many people still regard commercial
 software as something of a bargain.</p>
 
 <p>
 One issue that needs to be recognized and understood is the notion
 that free software, openly published in source form and freely
 inspected by anyone who has an interest or desire to do so, is
 worthy of far greater trust than closed, proprietary, secretive
 software. I for one found the installation of Microsoft's Internet
 Explorer to be a very scary experience: the computer running
 totally out of my control, reconfiguring itself, plugging into
 Microsoft's own web sites, setting up preferences and defaults
 according to Microsoft's business machinations.</p>
 
 <p>
 Sometimes I wonder whether Microsoft's underlying goal isn't simply
 to make the world safe for computer viruses. I'm not an especially
 paranoid person, but how can you ever know?</p></li>
 
 <li><p>Consumers nowadays are so often (and so effectively) fleeced that
 there is much resistance to paying for something you can get away
 with not paying for, so this will be an uphill educational battle.
 There is a game theory problem here: Who should I commit to paying
 for a development which I can get for nothing if only I wait for
 someone else to pay for it? But if everyone waits, no one benefits.</p>
 <p>
 There are other ways to handle this level of funding, such as
 imposing taxes on computer hardware (sort of like the gas tax is
 used to build roads) or even on commercial software (sort of like
 using cigarette taxes for public health). Developing countries, in
 particular, should support free software development, since the
 notion of intellectual property must appear to them as one more
 form of tribute to the rich. These approaches require political
 efforts that are sure to be contested and hamstrung. I'm inclined
 to start small, start voluntarily, and see how far reason and
 civility takes us.</p>
 <p>
 It should also be emphasized that there is at present a substantial
 amount of free software already written and available, and that
 there are many organizations and individuals that have contributed
 to the development and dissemination and support of free software.
 What is missing is a systematic approach to funding development,
 and a strong and consistent system for user feedback and
 direction.</p></li>
 
 <li>I would estimate that free software can be developed to quality
 standards that meet/exceed commercial software for less than 25% of
 the price of equivalent commercial software. This estimate is based
 on common R&amp;D expenditure levels plus a generous amount for those
 organizations which coordinate development and promote use. Given
 that free software is not compelled to become obsolescent (it can
 continue to be used as long as it is useful, whereas commercial
 software must obsolete old product to promote the sales of new),
 the costs for free software will decline over time, sharply except
 for the cases where new needs arise.</li>
 
 <li><p>Much of this work is already being done. What's missing is not so
 much the people or even the organization as a coherent sense of the
 economic imperatives. To date, free software has largely been
 driven by political sensibilities and the traditions of academic
 freedom, which have led it into a hodge podge of areas, many of
 which have very little impact on common needs and usages. (Some,
 such as the Web, have had major impact, and as such have attracted
 enormous commercial attention.) However, the driving force behind
 free software must be economics: why do we spend so much money
 propping up empires when all we really want are clean, simple
 programs that do our work? And why do software professions have to
 work for commercial companies when their skills and work are more
 immediately needed by users?</p>
 <p>
 The argument that large companies (government, any organization
 that spends serious money on software) should routinely support
 free software development is strong and well focused. Even if such
 an organization never directly used free software, its existence
 would provide a damper on prices and a strong bargaining point with
 commercial software vendors. It is a win/win bet: free software,
 cheaper software, more options, more competition.</p>
 <p>
 It is completely obvious that free software organizations must be
 international in scope. It seems likely that most of the support
 for free software will come from outside the US, perhaps by an
 overwhelming margin.</p>
 <p>
 This proposal does not dispute the rights of intellectual property
 owners. Under this proposal it should be possible to buy or license
 technology where appropriate, and inventors should consider the
 possibility of selling their inventions to the free world. Whether
 intellectual property rights in fact encourage innovation in any
 useful way can be debated separately.</p>
 <p>
 Another aspect of this proposal is that it does not try to kill off
 the profit motive in software development. As I envision it, most
 of the free software work would be done by small companies bidding
 on contract proposals, presumably with the intent of making a
 profit. (The companies are likely to be small because they won't
 need to float a large marketing/sales organization, which is the
 main advantage big software companies have over small ones. Also
 because the free software networking organizations should work for
 providing sharable resources, such as capital and services, saving
 small companies from having to overextend themselves.)</p>
 <p>
 My proposal is that free software will start out aiming to produce the
 most basic and most broadly used software: it will in effect harvest
 the &ldquo;cash cows&rdquo; of the commercial software industry,
 rather than attempt to innovate at the fringes of development. (Of
 course, innovators are more than welcome to contribute.) Beyond free
 software there will still be shareware and commercial products, which
 will to some extent compete with free software and to a larger extent
 open up new niches where free software is not yet available. The free
 software industry will provide a damper on the sort of prices that can
 be charged. It will also help lower the costs of all software
 development, and may eventually provide a salvage market for
 discontinued commercial software. Shareware may be a fruitful ground
 for speculative software development, with the goal being to develop
 and popularize a new product that can be sold off to the free
 market.</p>
 <p>
 Finally, I believe that no restrictions should be placed on the use
 of free software: that it can be repackaged, sold, incorporated
 into commercial products. Free software will reduce the development
 costs of commercial software, which will help make commercial
 software cheaper, better, more competitive: all good things. The
 goal after all is better, cheaper, more usable and useful software:
 victory is not measured in bankruptcies. The impulse to segregate
 free software from commercial software is doomed, as is the impulse
 to isolate free software from commerce. We live in a jungle of
 commerce, which no one can truly flee from, regardless of how
 offensive it may seem. The proposal here is to start to take short,
 deliberate, sensible steps toward reclaiming parts of that jungle
 for everyone's use and betterment.</p></li>
 </ol>
 
 <p>This implies, of course, that (following the Reagan demonology)
 Microsoft et al. are &ldquo;The Evil Empire.&rdquo; That's a joke, of
 course, but if it didn't harbor a shred of truth it wouldn't be
 funny.</p>
 
 <div class="infobox extra" role="complementary">
 <hr />
 <p><a id="hull" href="#hull-rev">[*]</a> You may contact Tom Hull at <a
 href="mailto:ftwalk@contex.com">&lt;ftwalk@contex.com&gt;</a>. He is
 also the author of the Ftwalk programming language, a script
 programming language, which is free software available for Unix
 systems.</p>
 </div>
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 <p>
 Please send questions and comments regarding this specific page to Tom
 Hull <a href="mailto:ftwalk@contex.com">&lt;ftwalk@contex.com&gt;</a>.
 </p>
 
 <p>Please send general FSF &amp; GNU inquiries to
 <a href="mailto:gnu@gnu.org">&lt;gnu@gnu.org&gt;</a>.
 There are also <a href="/contact/">other ways to contact</a>
 the FSF.  Broken links and other corrections or suggestions can be sent
 to <a href="mailto:webmasters@gnu.org">&lt;webmasters@gnu.org&gt;</a>.</p>
 
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 <p>Copyright &copy; 1997 Tom Hull</p>
 
 <p>You may link to this document and/or redistribute it
 electronically.</p>
 
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 <p class="unprintable">Updated:
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 $Date: 2021/09/09 19:56:08 $
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