measuring value

in a recent blog entry, andrew cowie states paraphrases someone else and says:

"[Anthony Towns] notes that the key economic driver is that once code is released, its value effectively drops to zero" (emphasis his)

it's a bit of an unfortunate turn of phrase because it implies that there is no value to open source code. well, it doesn't so much imply that, it comes right out and says it. =)

the background bias is that value is tied primarily or even solely to the amount you can sell an item for. this mindset springs from the form of capitalism made famous in the modern industrial world.

interestingly, according to this metric the air in our atmosphere is worthless. i'm sure you'd disagree with that. you probably think the air we breath is absolutely and fundamentally valuable given that it's one of the supporting pillars of life on this planet. to play the farce: if the air were to get poluted enough that we were forced to purchase clean air then suddenly it has value, right? i mean, now money is passing hands! of course, if this also causes the plants and other animals on our planet to die in the meantime that would sort of suck, and that new "value" derived from the clean air market comes at the price of economic growth elsewhere. (e.g. the fallacy of the broken window; but i'm starting to drift wildly.)

even more contrary to this "value == money" concept is that people spend lots of time, effort and money ensuring that the atmosphere remains "valueless" (as in "unmonetizable") by working to keep it clean and in the common worth.

(interesting side note: farmers in the usa tried to sue airplane companies for use of the air above their farms back when airlines first got started. the farmers lost since it was deemed they do not own the air above their land in this manner. the question of airspace ownership had not, in fact, been asked in a court of law until that point.)

preserving whales from being hunted is also similarly valueless in this "value by my personal monetization" scheme; and yes, i've actually heard policy makers suggest that the whales should all be owned by private interest so that there's an incentive, due to them now having value as property, to preserve them from hunting.

this may seem sensible enough at the start, but the flaw is that many things in life that have demonstrable value have little to no corresponding monetary value on the free market. in fact, there are some things in life that when purchased (and therefore monetized) actually decrease in actual value. this is particularly true of ephemerals and items of the common good.

in the particular case of source code, when it's released the value jumps dramatically for the consumer of that software. one might even say "infinitely" since a blob of binary goop is only good for use in the form it is delivered in at that point in time while the source code grants the opportunity to study and modify it and grants a guarantee to its future availability.

of course, i don't think this is what andrew cowie meant. what i think andrew cowie was actually saying (though i'm sure he'll correct me if i'm wrong ;) is that the price the market will bear for a body of software approaches zero when the code is released. this is completely different than it's "value". and it's important we get this stuff right or else face getting it thrown right back in our face by our competition who love the idea of proprietary software and hate the concept of sharing code, particularly since it de-values their offerings. it makes it very hard to show people the intrinsic value in free software when we ourselves say "its value is effectively zero".

other 'n that little niggle, andrew's blog entry was quite interesting and thought provoking. worth a read =)

(disclaimer: i'm not an economist or much of any other sort of -ist. i don't even play one on t.v. and yet, for better or worse, they let me have a blogger account. ;)

(the picture is of a few things t. brought me back from japan, including a shirt full of largely nonsensical english which apparently is all the rage over there.)