The growth of the Free Software movement and the response of
competitors such as Microsoft are an instructive illustration of
the major flaw in the theory of economic rationalism — the driver
of much economic policy around the world today. It is economically
rational in theory to lie, steal and cheat provided the reward
outweighs the potential cost. Trust and cooperation on the other
hand do not enter the equation. The growth of the Free Software
Movement, and one day perhaps the demise of Microsoft, illustrates
the economic stupidity of this.
With apologies to Francis Fukuyama and his book Trust, the
Social Virtues and the Creation of Prosperity, wealth is
created by people working together. Trusting, cooperating
communities are rich communities and vice versa. It is not possible
to create and distribute the level of wealth enjoyed by developed
nations without embracing the associated social and cultural
practices necessary for trust and cooperation between individuals
outside the family, clan or tribe. This is why some resource poor
countries are rich and resource rich countries are poor. The
independent variable is the level of trust and cooperation.
Why? Because the transaction costs of dealing with or living in
a community of people who can’t be trusted often outweigh the
benefits of a rationalist policy approach. To put it another way,
it is very expensive, if not impossible to deal, let alone work,
with people you believe you cannot trust.
The development of the Free Software movement is a perfect
example of people working together to create something of real
value for other than purely economic rationalist reasons. Sure,
some people expect or at least hope to get paid for providing Linux
distributions and services sometime in the future, but Linus is not
handing out weekly paychecks. People code for satisfaction and
recognition, two terms not part of the economic rationalist
lexicon. But this is only made possible by the incredible levels of
trust and cooperation between members of the growing Free Software
community, most of whom have never met except across the
internet.
This is the part that Microsoft, steeped in the old economic
theory just doesn’t get. Why would anyone work for free? In their
world, this shouldn’t happen. It ain’t rational. But according to
the DOJ and others suing Microsoft, lying, stealing and cheating is
part of their economically rational business plan. But even more
stupidly, Microsoft is untrustworthy and untrusting. I think I read
some testimony somewhere that Mr. Gates laughed with his minions
and called another company fools for trusting Microsoft! Does
Microsoft trust anyone outside the corporation? Does it even trust
its employees? Does Microsoft expose the finer points of its
forthcoming kernal designs to news groups for peer review? No
way!
When Francis Fukuyama wrote in 1995 about the values of trust
and cooperation in building community wealth, I’m sure he’d never
heard of Linux let alone knew what it was, he was probably not
aware of Microsoft’s alleged business behaviour either. I am sure
however that he would make the following observations:
Microsoft is going to find it increasingly difficult and more
expensive to do business. The reason? They cannot be trusted.
Period. Ultimately, they must become trustworthy or they will
shrivel up and blow away. Linux on the other hand will continue its
explosive growth to the desktop and beyond as long as the Free
Software movement continues to demonstrate the trust, cooperation
and community spirit that is now its hallmark. If it does, it will
deliver benefits to the world community that make Microsoft’s total
contribution to date and its total assets look like small
change.
World domination? Maybe…