Several responses: first, there is no stopping open source without restricting freedom of speech in a way I don't think any rational person could support, so its sort of a moot point.

Second, at least if you're a believer in a free market, nobody has a right to make a profit by their industry. They have to compete. Microsoft is working very hard to compete with the idea of free (as long as thermodynamics works, of course, nothing in this universe is truly free), in some ways I consider ethical, in others I don't. Economies change as technologies change and that's just the way it goes.

Third, people will always need capable programmers to make computers do what they want them to do. One could argue Microsoft primarily succeeded by getting the lock on the more or less universal business operating system, giving them a functional monopoly on the most common business software products and a good portion of the personal market to boot. One could argue this amounts to basically having a patent on the recipe for concrete and using it to be the only contracter in town. One could also argue that they frequently abused this position. In fact this has been sucessfully argued in several prominent court cases.

If open source software ends up being a better deal then that is just the way it is. But you get what you pay for: there is a reason why I fork over 20-60 bucks for a video game rather than just play some free clone of tetris: nobody has the resources or the wherewithal to make state of the art games and distribute them for free. Hackers are willing to invest their time freely on create open source OS development because they are building a foundation they believe will give them more powerful options in computing. Some are ideologues, some just like to hack.

I guess I'm going to have to disagree with a lot of the things you've said here. Just for the record, I think MS is a great company, but I see things quite differently. Let me explain.

First of all, the primary function of a company should be to "create value" in society. This is a basic tenet of capitalism. Often this is analagous to making lots of money, however it is not always the case. In the case of MS, which we can call a pseudo-monopolyw the great profit that is made is not necessarily the best thing for the society/economy as a whole.

If, hypothetically, there were, say, 4 other companies like MS competing vigorously, then this oligopolistic situation would create more value for the consumer and also, very importantly, drive innovation. As it is, MS does a good job innovating because there is a threat.

Right now, MS's biggest threat is open source software. I think that this is a form of duopoly that's vastly better than having a monopoly in the area, especially due to the lack of regulation.

Secondly, in looking at international trade, it is
common economic theory that countries with comparative advantage" in any one product SHOULD produce that product barring any strategic advantage that's necessary. So, looking purely at the numbers game, we're better off if India builds operating systems. The only thing is, we like the strategic advantage especially because we're such an information and services based economic power -- and we're moving in that direction more every day.

Thirdly, I haven't looked at the numbers, but I find it impossible to believe that the benefit to society of MS outweighs the benefit to society of other companies being able to reduce cost and increase quality by using open source. This is especially true due to MS's poor management of their money. Finance theory will tell us that there is absolutely NO benefit to society by holding $10billion in the bank. If anything, this helps to stall the economy. This is why many types of corporations (not the C-Corp) are actually prohibited from doing that.

Also, note that if MS makes lots of money, that's not necessarily good for the economy. It's good for Microsoft stakeholders (but not as good as it could be due to their mismanaging of funds), and it's good for Microsoft employees, but it's not passed on to the consumer. This is probably the one biggest complaint
people against Microsoft. Competition is usually what will spur a company to pass on that value, and when they don't the government will step in and force them
to as is done with electric companies.

Fourthly, the open source movement allows economies that frankly can't afford to buy Windows, or whatever expensive peice of software is in question, to at least operate and begin to advance their high-tech sector. This will: a) help in communacations around the word, b) help to advance smaller and weaker economies, c) help to increase education and bolster institutions in such economies... to start the list.

So basically, what you're talking about Trevor is economic protectionism. It turns out that with super-top-secret stuff and really high-tech stuff, that makes a lot of sense strategically. But in today's world, where everyone and their brother knows how to write an operating system, shouldn't this (OS's) finally become a commodity?

In conclusion, any company must have a viable value
proposition. The countries that tend away from MS and simply that they get more for their money by using open-source, then so be it. Companies and products have natural life-spans and to force them to perform the way they have done in the past is unnatural and wrong. They must continually re-invent themselves. In doing so, they will continue to live. I seriously doubt that open-source software will ever get to the point that it's competing on the technological forefront, and so companies like MS will be safe as long as they stay ahead of that curve. In the mean time, it's about time that the consumer is not ripped off for old technology so that MS's bank acount can grow fatter without sharing the wealth with the consumer.

Well, I also agree with a lot of what you say. MS needs competition to stay honest, to continue to innovate, etc., and if it can't compete, it probably should go away.

But my beef is more with the people who write linux (for free) than with anyone else. I would much rather see these people work as a company, bringing in money and adding to GDP than see them giving it away for free. If a company took advantage of collaborative open-source development to develop something like linux and sell it, compensating its developers properly, I would be thrilled to see that product displace windows. That's real competition.

But giving it away for free just makes it harder for _anyone_ to make a living writing software. See, the ultimate effect of this is a market where we take advantage of everyone's free time to create software for free. Then, most software is free, so there's tremendous downward pricing pressure, pushing everyone else out of the market. Probably the only thing holding MS up now is the fact that windows is a standard, and that MS is still innovating. If half the people were using linux, and half using windows, and linux were free, what do you think would happen?

The ultimate effect of this, theoretically, would be a near monopoly of free software. People would use it because it's free, as long as it's good enough... The problem is that in this world, no one would ever study computer science. We would end up stuck in a rut, just using free stuff because it's free.

Isn't this similar to 'dumping' problems we have in international trade?

I'm not really talking about protectionism (well, maybe a little). The feeling I get is that people are giving up the know-how we have here for nothing. Giving it away for free. And this is going to leave us much worse-off in the end.

Hmmm. I'll post more later.

Another couple of thoughts:

Is it really in our interest to 'bring up' less-developed economies if we don't get anything in exchange? Some think (maybe you) that once China is more developed, we'll be better off because we'll have a bigger market for our products... But at the same time, they may be displacing our products with their own if they gain access to our know-how. If we can't then take advantage of that market, it hasn't done us any good to give them all the benefit of free technology...

Here's a simplified model I've been thinking about. Let's say there are only two products, Windows and Quicken. The windows guy writes free financial software at night, for fun. The quicken guy writes a free OS at night for fun. Eventually, what's going to happen? Well, you can't really compete with free. The companies go away...

Here's what I think is happening now. The windows guy is spending time living his life when he goes home at night. The quicken guy is writing linux for fun at night. The Chinese are going to decide to use linux instead of windows now, and the windows guy is out of a job. All the Chinese money that had been coming in to MS just _stops_. Sure, they're sitting on a lot of it, but it's at least coming in to a U.S. company... I just don't think this is a good development for us. Sure, the Chinese could have developed an alternative themselves, but wouldn't it have been better if they had chosen an alternative from a U.S. company, or even developed it themselves, rather than being given it for free by us?

Now, you mention games and I think that's an important point. No one has the time to devote to writing a game without doing it for pay in a company. There are a couple of niche areas of software that seem to be like this, but not too many, IMHO. I guess my gut feeling is that if people continue to write free software, a lot of software companies are going to go away. But it wouldn't have to be this way if people just formed distributed companies and sold the product for something instead...

To hit the jobs perspective: I know it seems harsh, but one reason the US economy has grown to be as powerful as it has is due to a flexible work-force. If programmers are no longer needed in this economy, then that is because the economy itself has found a way to do without them. If we protect programmers, as we have done with steel for instance, then we'll stall the economy -- again, unless it's "strategic".

But I think much concern for this isn't warranted. Even if Microsoft goes away tomorrow, there will still be extremely high demand for computer programmers. Even if everyone used Linux, and open-source everything, companies would need to employ armies of customize and fix their own problems. Let's not forget that part of the problem was due to too much supply in the 90's. I think a lot of what we're feeling, and a lot of the sentiment out there has to do with people feeling like they were fooled by the market's over-exhuberance.

Also, let's not forget that open-source programmers are hardly catering to a market per se. Take the whole OpenBEOS project, that I was a part of for a short time... where's the demand for that!? There really isn't one, so it's more of a misguided approach to filling social needs. Companies do a much better job of providing what's needed based on demand. That's why they'll always have a place. Also, there will never be open source solutions for most programming problems, which are custom. Take a look at these fields: robotics, micro-control (missiles, DVD players, cell phones), embedded processing, web-related, games, industrial control, nuclear attack submarines, etc... It's only the commoditized parts that really can be OSS'd. Anyway, my point is, that the portion of software out there that potentially can (or shall we say should) be open-sourced is really a drop in the bucket of all software that needs to be written and maintained in the world, and in this economy.

Now, let's look at your simplified model. Who's going to support the software? If you were a common user (meaning not particularly skilled), would you trust or know how to use that software? I use GnuCash. But I would never, ever, tell my Father to. He has to, and should, pay to get a better piece of software, with support. Until there's open source support, I don't think this model will actually spread.

Let me extend the rest of your model. The quicken guy writes linux for fun at night. The Chinese decide to use linux and instead of _paying for_ Windows, and their costs get lower. That money stops going into the US company (MS), but all the rest of the companies in the US also have lower costs. Due to the competition between the US and China, the costs are not absorbed by the respective companies and the extra value is passed on to the consumers, in China and in the US. This sounds great for all parties.

Lastly, about the less-developed economies in question. I'm not really talking about China. I consider there's to be a very developed economy. It doesn't work as smooth as the US's does, but more privatization is taking more and more of the mony allocation away from the "big 4" and they're on the road towards building a true economic super-power. I was talking about places like Poland, Tunesia, and Afghanistan... for instance.

Again, I think that what it's really about, is the overarching needs of society as a whole, not about jobs. That's secondary and political. Once it becomes so bad that it comes to the forefront in politics, then that's how it's solved. It's one of the good bad things about the US. Nations that don't have such flexible work forces run into problems constantly and are simply not able to extract the total amount of value out of any particular economic situation due to this lack of response.

Open source creates more social benefit by reducing cost, and therefore creates more value for the consumer assuming some level of competition, for the many companies that use it than would be created by the positive benefit of revenue generated and concentrated at one company.

... IMHO