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Ganesh Prasad: The Capitalist View of Open Source (Revised)

May 18, 2001, 14:21 (67 Talkback[s])
(Other stories by Ganesh Prasad)

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) (http://linuxtoday.com/news_story.php3?ltsn=2001-04-12-006-20-OP-BZ-CY)

  • Introduction
  • Wealth
  • Property
  • The Rights of the Producer
  • Trade
  • Statism - the Enemy of Capitalism
  • Conclusion
  • References
  • 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 credentials.

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 it."

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 government."

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 will.


"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 happiness."

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 cooperation."

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 fraud.

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 Capitalism

"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 are inalienable."

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 progress.

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 values.


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.

  1. Capitalism - The Unknown Ideal, Ayn Rand, New American Library, 1967
  2. http://www.capitalism.org, a site devoted to popularising the philosophy of Ayn Rand
About the author

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.
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