Home > OS News > Some Implications of Software Commodification Some Implications of Software Commodification Eugenia Loli 2004-03-07 OS News 17 Comments This article explores the concept of commodification in a historical context while also seeking to discover lessons that might be applied to contemporary open source business efforts. I also wrote a similar editorial a few weeks ago. About The Author Eugenia Loli Ex-programmer, ex-editor in chief at OSNews.com, now a visual artist/filmmaker. Follow me on Twitter @EugeniaLoli 17 Comments 2004-03-08 12:37 am interesting read, especially for someone like me who has only a rudimentary understanding of business. The article did make me laugh tho as it’s the first one I’ve seen that combined Shakespeare, midwest slaughterhouses, and the Windows API vs. Unix API discussion LOL “Open source is about consumer demand, political process, and community involvement, rather than about software or hardware innovation.” I don’t know how much I agree with that statement, even after reading the entire thing…but does that model include room for visionaries like Torvalds, and others who envision *real* ideological and practical revolutions in computer software? Or did I miss the whole point of the article? foo 2004-03-08 1:32 am The article like most discussion of OS commodification misses the whole point. Commodities are produced for exchange on the market. Free Open Source Software is not. The reasons why FOSS is produced by open source developers has been discussed widely elsewhere but nowhere is it suggested that the motive is to produce software for sale on the market. Open source software is therefore not a commodity. Distributions might be assembled for market sale – but what is being sold is the added value from the labour of preparation of the integrated distribution not the labour of the production of the original code. Windows was originally in essence a form of commodity OS – the shrink wrap Win XP sold over the counter is a commodity and the labour involved in writing the code is the crystalized labour being sold. MS has used some of the unique features of software compared to other commodities together with ruthless business techniques to establish an artificial monopoly (as far as desktop OS’s goes). One of the key features of software that differentiates it from other commodities is that because once it has been written in can be reproduced for marginal cost. This gives MS an advantage in maintaining its monopoly against any other new commodity Operating System and Office software competitor. On the otherhand the marginal cost of reproduction of software gives FOSS an advantage against any commodity software manufacturer precisely because the production of FOSS is not commodity production. FOSS is in fact the first post-capitalist mode of production to have emerged. The mode of production in the former Soviet Union was a form of state capitalist production which in its hierachical authoritarian command model is reminiscent of how corporations such as MS operate. It was the failure of the Soviet Union to come to terms with more flexible modes of production that sealed its doom. It is the evolutionary model of FOSS (bothe DNA and computer code are ultimately replicatable strings of information) that dooms the monolithic Stalinist/Gatesist form of software production. 2004-03-08 1:44 am XP is not a commodity. For it to be a commodity there has to be low barrier to market entry. Pirate copies of XP or anyother CD is a commodity. XP in it’s legitimate form is not a commodity since there is only one vendor. It is not a perfect competitor. The Soviet Union was actually by most measures a success. It took a backwards nation and launched it into a superpower in a mere 50 years. This is not a failure. It did demise, but so did Roman and so will America. This does not mean the wither were failures. What killed irt was corruption. There are also many benefits to “Stalinist” modes of productions such as better control of resources and it prevents strangleholds on resources. After all Soviet space successes only occurred because the government could through it’s entire wait behind it. In fact the Russia was pathetic before the revolution (a French amabassador remarked about the ruling class in Russia that the Lunatics were running to the asylum) and yet still managed to be the first to send a man in space. I’m not here to defend the USSR but just generally sick of the OSS/Capitalism-panacea. I’m a fan but lets not be dellusional here. 2004-03-08 2:52 am Oh, oh, this thread has already run into the disasterous “commodification is a specialized Marxist word” versus the “commodity is a fungible labor input” collision! We need the “free as in beer”/”free as in freedom” distinction for the commodification word. “Commodity as in pork bellies” versus “Commodity as in Marxist fetish”. <running away and ducking/> 2004-03-08 7:34 am The only thing I think should remain a “commodity” is “entertainment” (i.e. content — music, movies, games, etc., etc..). Though it should all be up to the artist, of course. Then again, being a musician and actor, I may somewhat be bias here… I remember Linus was trying to make the same point in his book: That the “meaning of life is entertainment”…Linux and Open Source being the means of taking out all the obstacles to get to that end goal. And I think he’s right. I think that idea, his take on the “Linux revololution”, is just too powerful to falter, sooner or later…The “Stalinesque” way doing things will disappear. It already is disappearing as we speak. But some things are worth paying for, I say, and I hope 20 years from now people are still willing to throw their gold out at some clown for a “good laugh”, ya know? Hope I made sense..? 2004-03-08 7:44 am The only thing I think should remain a “commodity” is “entertainment” Oops..I mean “should not” remain or be a commodity. 2004-03-08 10:25 am I am not sure I understood the article. Developing software is VERY labour intensive. There is no way around that. It also requires a large amount of creativity. How can that ever be a commodity? When the software has been completed and is being sold it will only work on ONE type of processor with a highly specific environment. If there were only x86 computers in the world, all running the same OS, then MAYBE it can be a commodity, but that will never happen. Most of the software in the world runs on eight bit processors. It therefore fails the “commodity test” in that there is no interchangeability. You cannot use the software elsewhere, or for other purpses. Even MP3 stuff can ONLY be used for listening to music. What else can it be used for? I’m open to ideas. There is another aspect where software fails the commodity test: standards. Standards evolve too slowly to be useful for software as a commodity. If you don’t believe me, check out DVD burners. Is there a common standard? I bet that by the time a standard is finally set/aggreed to, it will be obsolete. One last question: how can Open Source become marginalized when it is free (choice/beer)? How is the closed source community going to crowd out Linux? Thanks, Yohn 2004-03-08 12:28 pm “I’m not here to defend the USSR but just generally sick of the OSS/Capitalism-panacea. I’m a fan but lets not be dellusional here.” CaptainPinko you miss my point, I said “FOSS is in fact the first post-capitalist mode of production to have emerged.” Capitalism is about the production of commodities by wage labour that are sold on the market. FOSS is about the free production (both free in the sense of being unwaged but also free from hierachical constraints) of use values that are available to all because of the marginal cost of their replication For Yohn who said – “Developing software is VERY labour intensive. There is no way around that. It also requires a large amount of creativity. How can that ever be a commodity? “. Developing automobiles is VERY labour intensive. There is no way around that. It also requires a large amount of creativity. How can that ever be a commodity – automobiles are commodities. Yohn you just don’t get it – commodities are produced by wage labour for sale on a market. Therefore by definition any shrink wrap software is a commodity. BTW Stray the Marxist definition commodity and the the definition as the commodity is a fungible labor input in academic capitalist economics are not fundamentally different. What is different is in Marxist economics the analysis of commodity is developed to establish the theory of surplus value and furthermore the concept of commodity fetishism is also developed. 2004-03-08 3:51 pm chemicalscum, know any links I can check out on Marxist economics, especially on “commodity fetishism”? 2004-03-08 4:25 pm “When the software has been completed and is being sold it will only work on ONE type of processor with a highly specific environment. If there were only x86 computers in the world, all running the same OS, then MAYBE it can be a commodity, but that will never happen. Most of the software in the world runs on eight bit processors. It therefore fails the “commodity test” in that there is no interchangeability. You cannot use the software elsewhere, or for other purpses. Even MP3 stuff can ONLY be used for listening to music. What else can it be used for? I’m open to ideas. ” LOL… Firstly, I think you misunderstood the meaning of commodity. Commodity does not mean free. It means cheap and expendible because there are alternatives. Apple’s are a commdity because if company A sells their apple too high, you either don’t buy it or buy it from company B. However, just because they are cheap doesn’t mean company A and company B do not make a profit. They just don’t make so much that they have $50 billion in the bank. Their product is commoditized so they have to compete. Secondly, you need to catch up to the 21st century. All the major frameworks (.NET and Java) are processor independent. Java is OS independent too and .NET can also easily be that if Microsoft wanted it to be. Also, with all the advancements in RAD tools and the OO revolution, software design and programming has become so easy that a monkey can do it. This will only improve in the future. With the major cost of software only being the initial design and code, and not much innovative software in the horizon, there is no way that software cannot become a commodity. 2004-03-08 5:18 pm Check this out for a complete discussion of the fetishism of commodities: http://www.marxists.org/archive/marx/works/1867-c1/ Kinky, kinky 2004-03-08 7:31 pm I totally agree that FOSS is the first post-capitalistic form of production. This argument is supported by the unique characteristics of FOSS: a) Global collaboration b) Volunteer effort c) The product is information/abstract thought. Note that, (a) was enabled by the Internet, a global comm. network, (c) is due to the effordable higher education. (b) is due to excess time created by the efficient economic structure. Interestingly, the physical foundations of all three are thanks to the capitalistic system: network-infrastructure, standart of living including income, education, etc. Therefore, while most of the FOSS production is in industrial countries, its usage is stronger in developing nations. Some parallels with agricultural revolution are obvious. In industrial nations, agriculture is the occupation of roughly 10% of the population. With CAD/CAM and robotics, will it be the same with physical products? Probably, yes. The question is whether capitalism will survive this new challange. Feudalism did not survive the agricultural revolution of middle ages. It boils down to how can you quantify mp3/software/any-IP with money and exchange it as if it were a good? If the solution to this question can be found within the current capitalistic economics, then capitalism may survive by evolving. However, I do not think that the current legal-economic infrastructure is up to this challange, and might resist until its replacement. 2004-03-08 7:32 pm “Ok just for the record now that that link is here : people that think that FOSS has got anything to do with marxism don’t know anything about marxism or FOSS (and are probably paranoid american types 😉 )” Just for the record those that thing Marxism has nothing to do with a discussion on Software Commodification are probably too busy consuming fetish commodities to try to understand commodity fetishism. 😉 2004-03-08 7:42 pm Ok just for the record now that that link is here : people that think that FOSS has got anything to do with marxism don’t know anything about marxism or FOSS (and are probably paranoid american types 😉 ) Well I’m not educated enough in Marxism to see if software is fully Marxist but with free compilers (e.g. gcc) a person/worker can now own the means of production as opposed to no individual would be willing to shell out the money for copy of Microsoft Visual Studio Enterprise. One of Marx’s central themes is about workers owning the tools they work with. In a sense I ‘own’ my copy of gcc and you can’t take it away from me nor tell me what to do it with. This is contrasted with an autoworker who all day long with machines the plant owns; he can’t pack up his assembly and take it elsewhere to work for another company (b/c he doesn’t own it) but I can take my gcc and go elsewhere. I own all the matierials and tools I need to make software. 2004-03-08 7:50 pm Seems like “commodification” would mean “make commonly modifiable”, assuming there is such a word. If that’s what you want, I’m all for it, even if the “commonly modifiable” software costs money in the beginning…. OTOH, I think we’re talking about “commoditization” here, no? 2004-03-08 7:54 pm To throw my capitalist-pig spin on this: I don’t think you need to go outside the bounds of capitalism to explain OSS software. Just expand the definition of “value” to include more than just monetary compensation. Consider why people work: They weigh the opportunity cost of doing one unit of work vs the value received for that work. If the opporunity cost (in free time) is greater than the value received, then they don’t do the work. Now, consider that writing software has to modes of value: first, it can generate monetary income. Second, it generates internal value in the feeling of a challenge, and goodwill generated by others. Thus, we understand why OSS developers work: the opportunity cost (in lost free time, or paid work they could be doing instead) is less than the value received for the work. Now, we can see why Open Source is one of the few things that can compete with the Microsoft monopoly. The entry cost for competing in Microsoft’s market is extremely high. Basically, you have to make a profit before your venture capital runs out. Trying to do this, of course, is foolish. Microsoft has $40bn in the bank, and you’ve got a whole lot less. Now here is the beauty of OSS software. Its already paid for! The marginal cost of creating each unit is really close to $0. That means your venture capital lasts a whole lot longer, and you can stay in the game long enough to start making a profit. 2004-03-08 11:50 pm Rayiner the “feeling of a challenge, and goodwill generated by others.” are not part of the capitalist mode of production they are it’s direct opposite. Capitalist production is based on a “disciplinary regime” as Hardt and Negri decribe in their work “Empire” (Harvard Univesity Press, 2000) it depends on ever increasing (on a global basis) recruitment of wage labour… “the new strata of intellectual proletariat everywhere all tended towards a common site of exploitation in the factory-society of the global disciplinary regime” (Hardt and Negri, ibid.) The FOSS form production marks a decisive break from this capitalist mode of production i.e the Redmond software factory. The fact that capitalist companies from the small and middle sized to the largest in the world (IBM) can leverage this product ( a set of use values) is only on the basis of value added to it – the labour involved in preparing a distribution, services and the supply of hardware. So it does not change the essentially post-capitalist mode of production of the origianal FOSS software.