Daniel O'Connor | Integral Ventures, LLC
Thanks to Chris Corrigan, I was reminded today of the recent article in The Economist on the The Economics of Sharing:
By now, most people who use computers have heard of the “open source” movement, even if they are not sure what it is. It is a way of making software (and increasingly, other things as well), which relies on the individual contributions of thousands of programmers. The resulting programs are owned by no one and are free for all to use. The software is copyrighted only to ensure it remains free to use and enhance. In essence, therefore, open source involves two things: putting spare capacity (geeks' surplus time and skill) into economic production; and sharing.
Economists have not always found it easy to explain why self-interested people would freely share scarce, privately owned resources. Their understanding, though, is much clearer than it was 20 or 30 years ago: co-operation, especially when repeated, can breed reciprocity and trust, to the benefit of all. In the context of open source, much has been written about why people would share technical talent, giving away something that they also sell by holding a job in the information-technology industry. The reason often seems to be that writing open-source software increases the authors' prestige among their peers or gains them experience that might help them in the job market, not to mention that they also find it fun.
I suspect that part of the challenge in developing such an economics of sharing is that the orthodox neo-classical economic paradigm begins with an impoverished view of human motivation as some mathematical derivative of a presumed market equilibrium, wherein everything of value that could have been created already has been created.
In my opinion, we could go a long way toward developing an economics of sharing if we began with an entirely different premise, first articulated by Ludwig von Mises: that the purpose of every market exchange, indeed every human action, is “to substitute a more satisfactory state of affairs for a less satisfactory one.” (Human Action, p. 97)
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