Alexander Chislenko November 12 1995 --------------------------------------------------------------- I just read a few usenet messages under a flashy if not very meaningful title "Information wants to be free", with a proposal to employ a software tax (on hardware sales, income or whatever) to fund software development, and then let people use the software for free. If I understand it right, the proposal aims to achieve maximal utilization of existing software, support small developers, allow faster evolution of the market and have other economic benefits. Looks like the authors finally found the area of economic activity where the communist principles would really work. I have a few little questions regarding implementation of this proposal, that I think are typical for any communist undertaking, and one suggestion on how to try this and similar experiments in practice without coercion. IMPLEMENTATION DETAILS First of all, how do we share the tax money among the software developers? Method 1: Give each programmer the same amount of money. -------- Then all citizens will declare themselves software developers, and share the money equally. No good. Or do we certify programmers, and give money to only those who satisfy minimal requirements? Should we create a federal agency that will judge the competence of each applicant in all skills that may be necessary to write software? How do we make sure that people will be motivated to continuously develop their skills? - Continuous graduated certification, and *different* salaries to back it up? How do we make sure that we do not get into a situation where everybody writes things that are simple of fun, and nobody writes device drivers? Or do you tell people what they should write to get paid? Do we also certify project managers, QA people, receptionists, janitors and beta-testers? How do we determine how many of them are needed for each project? - Enough here. Method 2. Reward people for efforts --------- This is so difficult to do that I can't even think of questions to ask. Just one remark: effort is the thing that sane economy is supposed to *minimize*. Method 3. Reward people for results. -------- Looks promising. All we have to do is to measure the results. So how do we do it? Measure program size? This would stimulate people to write monsters. Market penetration? Again, gives advantage to those big companies, and offers incentives to write lots of little calculator programs. Measure actual usage time? Everybody will write clock programs or VERY slow utilities. Measure user satisfaction? You mean numerically? How do we compare moderate mass satisfaction of people using a simple toolbar widget with extreme joy of an advanced DOOM player, or with the potential grief of people if the nuclear power station software failed? What about the programs that people are always unhappy to use - like tax preparation packages (except when people pay the software tax that is ;-) ) -------------------------------------------------------- OK, enough questions. By now I must have revealed myself as one of those incompetent skeptics who just do not want to embrace the benefits of this idea. Still, it may make sense for the defenders of this idea to try it in practice. For that, I have a little PROPOSAL on how to implement software communism without sharing its benefits with the skeptics - and without coercing them. The proposal is to have two different software distribution channels. One of them "capitalist" - the way market works now. (There are a bunch of methods here actually.) The other is "virtual communist": participating consumers pay voluntary tax, and participating producers of software divide the money and give up their software for free. This is more or less the same scheme as having each market in it own country, except that the boundaries between the markets are functional rather than territorial. The opportunity of having functional boundaries is granted by the high liquidity of software, which makes it different from most other goods. If the communist distribution of software has any benefits over the capitalist one at least in some market segments, then those segments and necessary methods and levels of voluntary taxation will quickly reveal themselves and the communism will take over where it works best. If it doesn't work anywhere, we'll still have completed a valuable - and completely voluntary - economic experiment in which the losers will have nobody to blame but themselves. ------------------------------------------------------------------ Here is a reply from Roland Schroeder and my answers: > >I don't think this to be a fair judgement. It's not only communists who >agree about the following: Goods that can be used without marginal cost >by another user should be priced zero to provide an efficient allocation. > >I don't think all the economists who wrote about public goods are communists... > I did not say that the people are communist - just the methods; the same people may also apply other methods to other cases. > >Have a look to a wonderful article by Coase, R. (1946): The Marginal Cost >Controversy; Economica 13, pp. 169 > Thanks - I wish I had time... I'd be happy to share it with others though. > >However, the other problem you mentioned, how to distribute the raised taxes >among the developers in an incentive compatible way, remains still unsolved, I >agree with you. > If the system can't get people to produce anything, all suggestions of how to raise money to compensate them is kind of pointless, isn't it? I agree, efficient distribution of goods with zero marginal cost is an interesting theoretical subject. There is a variety of mixed approaches I can think of here. Some are used - shareware, public domain software funded by voluntary contributions. Some are proposed - e.g. reverse Software contract auction - the public declares what it needs, and people keep pledging money until somebody decides that they can deliver the product for this money. At this point, the pledges are collected. the rest of the public uses the product for free. Some I could suggest myself - e.g. software rights modeled after patent rights - with expiration date. This can also be done voluntarily. If enough people believe in this model, a commercial program that includes a promise to be free after N months will have a competitive advantage over the one without such a promise - at least, among these customers. These, and other opportunities seem well worth exploring and experimenting with. Then we can develop a variety of funding and distribution systems that with time will occupy their niches in the economy and help us develop better theories. Fortunately it seems that voluntary approach is economically superior to coercive methods. The idea of taxation under a threat of prison if I avoid paying the tax - and death if I try to escape from prison - just doesn't appeal to me. Especially since I am already paying money I desperately need for important work, to pay taxes for lots of stupid things designed by people with less education but more coercive power than myself. What I really do not like in this, is that some people are proposing to implement this coercive taxation system in practice *now*, without even an idea of how to make it work. This seems scientifically irresponsible and morally wrong.