Theory and Practice
Economics research is about creating theories which describe how the economy
works. The ultimate goal of the research process must be to provide guidance
for making good decisions in economic matters.
Why restrict software copying?
Copyright law allows the authors of computer programs to have, for a limited
period of time, monopoly rights to copying and distributing the program. This
allows a business to invest into the development of a computer program and then
to recover the investment and make a profit by selling copies of the program.
At first sight, this seems to make perfect sense. Certainly it is only fair
that those who put in the effort of developing a useful program should also be
able to reap economic benefits from their efforts. However if our intuition of
economics and business ethics has been trained by thinking about material goods
(fruits such as apples, oranges and lemons are often used as examples for
explaining the basic principles of economics), we should not be surprised if
this intuition leads to bad results when applied to information products such
as computer programs. Information products are different because making copies
is generally easy and inexpensive. Only when artificial restrictions on
copying are imposed will it be possible to turn copies of computer
programs into a scarce resource, so that such copies can be sold at a
price.
This consideration shows that the proprietary software approach of
restricting copying and distribution of computer programs is necessary if we
want to apply to copies of computer programs the economic principles that are
valid for material goods.
I would consider these restrictions on copying and redistribution of software
a neccessary evil if they were indeed neccessary to make software development
economically feasible. However, as the remarkable success of the Free Software
movement shows, this is not always the case.
In today's market situation where proprietary software is starting to get
serious competition from Free Software it is also no longer true to say that
it is much easier to earn money by selling proprietary
software than with Free Software - nowadays, earning money through selling
software is difficult no matter which approach you choose.
I would say that since today there are no longer any compelling reasons for
choosing a proprietary software strategy, there is no longer any valid reason
to not let ethical considerations guide you in
making the key business strategy decision between the three alternatives of
- proprietary software (programs which belong to a person or company which
holds a monopoly on selling the program, and on creating new versions),
- Free Software (programs which the users can freely modify and redistribute
in original or modified form),
- non-free, non-monopolistic software (this is how I refer to the grey area
between Free and proprietary software).
I expect that Free Software will become dominant for most kinds of computer
programs as soon a good number of IT companies gain a good understanding
of Free Software business strategy.
Free Software will win over proprietary software because monopolistic lock-in
to a software vendor is contrary to the users' business interests. Also,
Free Software will generally win over other non-monopolistic forms of software
licensing because of the economic benefits of the open source process.
Coaching
You know how in the world of sports, every athlete works with a coach to become
really successful. Similar techniques work very well when the goal is business
success. Business coaching is a specialized form of consulting with
benefits for the client which depends both on how well the coach understands
the client's business challenges, and on how well the coach has mastered the
craft of coaching.
I offer coaching services (via telephone) to information technology
businesses which avoid monopolistic business
practices.
You are invited to request more information.
