Hi,
Larry McVoy wrote:
Somehow I tried to stay out of this, but I simply can't leave this
uncommented. Another long rant, better don't read this if you want to
keep your limitless optimism.
> The problem with your point of view is that you are assuming that somehow
> progress will continue to be made once you have that freedom. Let's just
> look at that for a minute and see if that makes sense.
>
> [...]
>
> We can argue about this until the cows come up but it's simple economics.
> If there is no barrier to entry and a supplier is charging more it
> costs, a cheaper supplier will enter the market and force the price down.
> Even the most green MBA understands this and I don't think I need to tell
> you that the VC's all understand this. For the sake of discussion, let's
> assume that you agree with that statement (if you don't, don't bother
> to argue with me, I'll ignore you, I'm not here to teach basic economics).
>
> So we've established that in an all free world, even though some money
> will change hands, it can't be significantly more than what it costs
> to perform whatever service is being provided. In other words, there
> is no extra money.
>
> Is that a problem? I think so. If you look at the history of the free
> software movement, it has been a history of imitation rather than one of
> innovation (sorry to sound like Bill Gates but he has a point here).
You really shouldn't use economics to argue against free software, you
will only lose badly.
You make it sound as if imitation would be a bad thing, but without
imitation there would be no competition and without competition there
would be no incentive to innovate. Your remaining argumentation
basically says, that we should give up a little bit of our freedom to
sell it for money. Will it work? Maybe, the question is just for how
long.
To stay competitive there are basically only two ways, either you
destroy the competition or you offer better conditions than your
competition. It should be more or less obvious, why the first is a bad
idea. The constant force to undercut the competition has driven
innovation, but this is more and more becoming a curse. The innovation
cycles are becoming shorter and shorter, which makes it more and more
difficult to get the investments back. So the need to make money will
soon rather cause stagnation. Why is VC needed in first place and why is
it not possible to grow slowly anymore? Development costs? Not really,
it's mainly because you have to occupy a market as quickly as possible
to still make any money at all. Afterwards you want to protect your
market share and so any revolution will turn conservative.
You can blame whoever you want, but it's unavoidable that it's soon not
possible anymore to finance innovation, all you can do is to slow down
the development, but it's just a matter of time. Already now a lot of
companies are still busy to get their investments back, banks are
sitting on a lot of bad credits and at some point they want their money
back. Are they really interested in new competition? The last years we
lived vastly beyond our possibilities and we have become very dependent
on growth to pay our past debts. This slowly doesn't work anymore,
globalization is over, there will be no significant growth anymore, all
what is left is a cruel fight over market shares.
The problem with your point of view is that you are assuming that the
current system will somehow continue forever and it's the current system
that makes less and less sense. It's very possible that in a few years
you will be thankful to have that freedom that you're now so willing to
give up. It's indeed all basic economics, you just have to put aside the
blind faith in money for a moment.
bye, Roman
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This archive was generated by hypermail 2b29 : Tue Jan 07 2003 - 22:00:26 EST