Ganesh Prasad: The Capitalist View of Open Source (Revised)
May 18, 2001, 14:21 (67 Talkback[s])
(Other stories by Ganesh Prasad)
Re-Imagining Linux Platforms to Meet the Needs of Cloud Service Providers
The Capitalist View of Open Source
Is Open Source a form of Socialism? What would Ayn Rand have
thought of it?
By Ganesh Prasad
with editorial input from OsOpinion.com
Open Source software, especially software under the GNU General
Public License, has come under increased scrutiny for its alleged
threat to intellectual property and Capitalism itself. This article
examines the functioning of the GPL from the viewpoint of
Capitalism, drawing on the writings of one of the most hardline
capitalists of all -- Ayn Rand. It concludes that the GPL operates
along purely capitalist principles, and that the real enemies of
Capitalism are those who seek to outlaw the GPL.
This is a companion article to "Open Source-onomics" (Examining
some pseudo-economic arguments about Open Source)
- The Rights of the Producer
- Statism - the Enemy of Capitalism
- About the Author
Open Source advocates are often embarrassed at the suggestion
that their favourite type of software may be a socialistic
phenomenon. Though they protest this insinuation strongly, many
secretly fear it may be true. The sharing aspect of Open Source,
its emphasis on community and its availability free of charge
certainly sound like Socialism. And Open Source doesn't lend itself
easily to commercial exploitation. Is it anti-capitalist, then?
The recent pronouncements by Microsoft executives that there is
no value in "free" and that it is impossible to make money by
giving away the very thing that is of value, ring very true. It
would indeed be dreadful to discover that Open Source is
anti-capitalist, wouldn't it?
Many advocates of Open Source fervently hope for companies
offering Linux-related services to finally turn profits and prove
that there is a business model behind Open Source, but such a
prospect doesn't seem likely in the near term. In any case, that's
a roundabout way to establish Open Source's capitalist
The fundamental principles of Capitalism are laid out very clearly by that
hardcore ideologue, Ayn Rand, so we should be able to determine
objectively (her favourite word) whether Open Source,
especially GPL-ed software, is opposed to the capitalist system. In
each of the following sections, we will look at Rand's view on a
particular concept and see how it compares with the state of Open
Source and the GPL. That should tell us where Open Source stands
with respect to Capitalism, and establish objectively
whether it is friend or foe.
"Wealth is the result of man's ability to think
applied to the sphere of production and trade. Reason, ultimately,
is the source of all wealth."
"Fundamentally, wealth is the product of man's mind--and belongs to
each man to the extent that he created it."
"Wealth belongs to the individual who produced
Ayn Rand never wrote about software in her lifetime, but she
surely would have recognised it as wealth. Indeed, if Rand were to
write The Fountainhead today, her hero might very well be
a programmer rather than an architect. Nothing epitomises
individual human creativity as well as software, being the product
of pure mind.
It is probably also safe to assume from her writings that Rand
would have considered software to rightfully belong to the
programmers who wrote it.
"Capitalism is a social system based on the
recognition of individual rights, including property rights, in
which all property is privately owned."
Ayn Rand believed that there is no such thing as "public
property". What is commonly referred to as such is the private
property of a government.
She would probably have had no use for "public domain" software.
This is uncopyrighted software and has no owner. In contrast, Open
Source software, including all of GPL-ed software, is copyrighted
by its authors, and hence is not "public domain" but clearly
privately owned. Not only that, since the software is owned by none
other than its creators, Rand would have had no argument at all
with the property ownership aspect of Open Source.
The Rights of the Producer
"The right to dispose of one's income belongs to the
producer, and if he wishes to give it to an heir, a charity, or to
flush it down the toilet--that is the producer's right. It is not
any of your concern, and it certainly is not the concern of the
Rand clearly believed that the producer of wealth alone had the
right to determine what to do with it, and stated this in no
uncertain terms. When we say today that the author of a piece of
software gets to choose the license under which to release it, we
are echoing Rand.
A programmer may release his or her work under a commercial
license or an Open Source one such as the BSD license or the GPL.
They may even choose not to copyright it, and put it into the
public domain instead. We may all have our individual preferences
for one course or another, but as Rand admonishes, the producer
alone has the right to decide how to dispose of their creation.
Therefore, she would have had nothing to say against programmers
choosing to release their software under the GPL, of their own free
"Free competition is the freedom to produce, and the
freedom to trade what one has produced, for one's own
self-interest, i.e., in the pursuit of one's own
Rand also wrote that under Capitalism, one may obtain property
from another in only one way -- by their voluntary consent. Rand
said that by banning the initiation of physical force, Capitalism
leaves only one way for people to deal with each other, -- through
trade, which Rand called "the highest form of voluntary social
Rand was implacable in her opposition to the use of force for
any purpose but self-defence. She believed that Capitalism is based
on individual rights, free will and free choice, not force or
So how would she have looked at the GPL?
The GPL is by no means a coercive or deceptive license. It
clearly states the rights and obligations of any party who accepts
its terms. It offers access to the intellectual wealth created by a
producer, for a certain consideration. The consideration is that
any derived works that are publicly distributed must also be made
available under the same terms. This consideration may seem
strange, but stranger contracts have been known to exist, which are
legally valid and defensible.
The important thing is, there is nothing in the terms of the GPL
that is illegal, coercive or deceptive. If the terms of the GPL are
unacceptable to any party, they are completely at liberty to walk
away. However, once they agree to the license, they are bound by
its terms and cannot renege on them. Rand believed that one of the
legitimate functions of a government is to enforce contracts.
So far from Rand considering the GPL an evil socialistic
phenomenon, it seems very likely from her writings that she would
have seen nothing in it that opposed the principles of Capitalism.
With GPL-ed software, there are creators owning their creations,
deciding without coercion what to do with it, and entering into
voluntary agreements with other free individuals to use and improve
their work for mutual benefit. It is a textbook example of the
enlightened self-interest that Capitalism talks about. It is
clearly a way to increase wealth, not to destroy it, and therefore
it is objectively good.
And what about making money? Rand always talked about "wealth"
rather than money, because she realised all the different forms of
wealth that are created by the human mind for man's enjoyment. In
that, she remains years ahead of self-styled capitalists who, even
today, see Capitalism only as a system to make money.
Statism - the Enemy of
"How does capitalism differ from statism?
Statism is the opposite of capitalism.
Only capitalism declares that each and every man, may live his own
life for his own happiness, as an end to himself, not by permission
of others, but by right, and that government's sole responsibility
is to protect those rights, and never violate them, because they
Rand believed that individuals must be free to carry out trade
with other individuals based on free will. She also identified
forces that seek to prevent the functioning of such a free system
and called them "statist", because they are enemies of
Since the GPL clearly works according to principles approved of
by the Capitalist ideal, those who seek to have it outlawed are
trying to interfere with individual freedom. They are therefore
statist and the real enemies of Capitalism. When Microsoft talks
about the need to educate policy makers about the "threat" from
Open Source, it is posing a statist threat to capitalist
There are many who will not be convinced by the reasoning above.
They will argue that Open Source may use capitalistic mechanisms,
but it does so in order to undermine Capitalism and achieve
socialistic objectives. This argument is meaningless, because any
system that obeys all the principles of Capitalism is, by
definition, Capitalism. If socialists are also happy with it, then
it simply means that Open source has been able to bring to an
amicable end one of history's longest-running debates.
Supporters of Open Source need not be embarrassed if no
corporation makes money from Open Source. Capitalism does not
guarantee corporations a profit, and Open Source does not need such
petty "proof" of its capitalist credentials. What is important is
that Open Source works exactly according to the definition of
Capitalism by one of its most hardline advocates. Therefore, no
capitalist of any (milder) shade can doubt its credentials. While
many corporations may make significantly less money thanks to the
disruptive effect of Open Source, Open Source will continue to
create wealth for its creators to enjoy, and to share with everyone
of their own free will.
That is the ultimate measure of its value.
About the author
- Capitalism - The Unknown Ideal, Ayn Rand, New American Library,
- http://www.capitalism.org, a site
devoted to popularising the philosophy of Ayn Rand
Ganesh Prasad is a strong supporter of Linux and Open Source
software. He considers himself a capitalist in the broadest sense,
because he believes that wealth is potentially limitless and must
be sought to be maximised. He also believes that individual wealth
is maximised when everyone is wealthy, because of the greater
variety and abundance of things to trade, and so it is in the
long-term self-interest of everyone to work towards increased
global wealth. He sees Open Source as doing exactly this.
Copyright (c) 2001 Ganesh Prasad.
Permission is granted to copy, distribute and/or modify this document
under the terms of the GNU Free Documentation License, Version 1.1
or any later version published by the Free Software Foundation;
with no Invariant Sections, no Front-Cover Texts and no
A copy of the license is available at