1. Free Software and Commons-Based Peer-Production _____________________________________________ _____________________________________________

2. Overview The challenge of free software Commons-Based Peer-Production Motivation Organization Economic Value Trends, Values, Implications The rise of the human economy The stakes for liberal society _____________________________________________ _____________________________________________

3. Free Software _____________________________________________ _____________________________________________ Getting harder to ignore success Apache market share 1995-09/2001 Source: Netcraft Survey Sept. 2001

4. Free Software _____________________________________________ _____________________________________________ Getting harder to ignore success Source: Netcraft Survey Sept. 2001

5. Free Software _____________________________________________ _____________________________________________ Getting harder to ignore success Current explanations of open source software Detailed description of the phenomenon Explanations of what is special about software Explanations about hacker culture

6. Free Software Proprietary software depends on exclusion Use permitted in exchange for payment “Learning” often prevented altogether to prevent copying and competition Customization usually only within controlled parameters No redistribution permitted, so as to enable collection by owner _____________________________________________ _____________________________________________

7. Free Software Proprietary software depends on exclusion Free software limits owners’ control Use for any purpose Study source code Adapt for own use Redistribute copies Make and distribute modifications Notification of changes Copyleft _____________________________________________ _____________________________________________

8. Free Software Proprietary software depends on exclusion Free software limits control Identifying characteristic is cluster of uses permitted, not absence of a price (“free speech” not “free beer”) _____________________________________________ _____________________________________________

9. Raymond, Moody One or more programmers write a program & release it on the Net Others use, modify, extend, or test it Mechanism for communicating, identifying and incorporating additions/patches into a common version (led by initiator/leader/group) Volunteers with different levels of commitment and influence focus on testing, fixing, and extending Anatomy of Free Software _____________________________________________ _____________________________________________

10. The Institutional Framework Property, open access, & copyleft Property is institutional core of market & firm-based production parameters of exclusion permit charging a price and controlling output of employees _____________________________________________ _____________________________________________

11. The Institutional Framework Property, open access, & copyleft Property is institutional core of market & hierarchical production Public domain/open access Dedication to the public domain makes software free Allows anyone to use, modify, redistribute Weakness: ease of defection/reappropriation by downstream actors may cause demoralization and ex ante non-participation by peers _____________________________________________ _____________________________________________

12. The Institutional Framework Property, open access, & copyleft Property is institutional core of market & hierarchical production Public domain/open access Copyleft is a cluster of licensing provisions that rely on the control property rights provide to make software “free” while protecting against some defections that an open-access commons approach permits _____________________________________________ _____________________________________________

13. The Institutional Framework Property, open access, & copyleft Institutional parameters of copyleft Freedom to redistribute the program, for free or for money Distribution must be in, or accompanied by, source code, so as to enable modification Means you cannot redistribute with a prohibition on recipients to redistribute Eliminates incorporation into business models designed around exclusion from the program, thereby eliminating certain incentives for defection _____________________________________________ _____________________________________________

14. The Institutional Framework Property, open access, & copyleft Institutional parameters of copyleft Freedom to redistribute the program Freedom to modify and distribute Provided distribution is under same terms as original work was licensed Prevents use of others’ efforts and failure to return one’s cumulative contribution to the common pool Clear notifications of changes and attribution (could be distribution of base plus patches) Crucial to reputation/peer-review based quality control _____________________________________________ _____________________________________________

15. The Institutional Framework Property, open access, & copyleft Institutional parameters of copyleft Freedom to redistribute the program Freedom to modify and distribute Covenants run with the program To downstream users To derivative & collective works, but not to parallel distributions Prevents failures to impose licensing conditions by recipients from allowing re- appropriation by downstream users _____________________________________________ _____________________________________________

16. The Institutional Framework Property, open access, & copyleft Institutional parameters of copyleft Freedom to redistribute the program Freedom to modify and distribute Covenants run with the program GPL & Open Source definition do not discriminate between commercial and noncommercial free software _____________________________________________ _____________________________________________

17. The Institutional Framework Property, open access, & copyleft Institutional parameters of copyleft Freedom to redistribute the program Freedom to modify and distribute Covenants run with the program Permits commercial and noncommercial Major current question: what counts as “modification” as opposed to just running an application using functionalities from a GPL program _____________________________________________ _____________________________________________

18. The Institutional Framework Property, open access, & copyleft Institutional parameters of copyleft Copyleft vs. public domain Reduces incentives to adopt a proprietary strategy Reduces opportunities for “defection” Building on work of others who contributed to a common enterprise and failing to contribute the product to the common pool Retains the integrity of contributions as part of the peer-review process _____________________________________________ _____________________________________________

19. Peer Production All Around _____________________________________________ _____________________________________________ Peer production various sized collections of individuals effectively produce information goods without price signals or managerial commands Human parallel to distributed computing? Various @home projects Gnutella, Freenet

20. Peer Production All Around _____________________________________________ _____________________________________________ Academic research The Web Content (Clickworkers, K-5, Wikipedia MMOGs) Relevance/accreditation commercial utilization--Amazon, Google volunteer--open directory project, slashdot Distribution physical--Gnutella value added--Distributed Proofreading

21. Why would anyone do it?

22. Diverse Motivations _____________________________________________ _____________________________________________ OSS economics literature maps the diverse appropriation mechanisms Intrinsic Hedonic Community ethics Extrinsic Supply-side--human capital, reputation Demand-side--service contracts, widgets

23. Diverse Motivations _____________________________________________ _____________________________________________ OSS literature Diverse motivations R = M s + H + SP p, jalt Rewards, monetary /s (satiation), hedonic, socio-psychological /p (professionalism or prostitution from M to self), / j, alt jealousy or altruism (from M to others) Except if p is positive, there are ranges where nonproprietary production draws effort that proprietary production does not

24. Diverse Motivations _____________________________________________ _____________________________________________ OSS literature Diverse motivations Initial implications Non-proprietary strategies are the sole available avenue where granularity of valuable behavior is too fine to price given transaction costs, but net value of behavior for social-psychological rewards is positive C m > V > C sp SP - C sp +H > 0

25. Diverse Motivations _____________________________________________ _____________________________________________ OSS literature Diverse motivations Initial implications Fine-grained collaboration When p is positive or neutral, activities that can combine money with social psychological rewards will in theory dominate activities with SP only Strength of the effect will depend on value of investment sought to be motivated

26. Diverse Motivations _____________________________________________ _____________________________________________ OSS literature Diverse motivations Initial implications Fine-grained collaboration p is positive combinations dominate When p negative, total rewards depend on absolute values of s and p individuals with high s and p<< 0 for the behavior will only participate in nonproprietary organizational forms low s, low p, we will see mix high negative p will likely result in socio- economic bifurcation of activity (like sex)

27. Diverse Motivations _____________________________________________ _____________________________________________ OSS literature Diverse motivations Initial implications Fine-grained collaboration p is positive combinations dominate When p negative, total rewards depend on absolute values of s and p “Managing” a peer-production enterprise involves, importantly, cultural management of the p value High negative p will make using straight- forward money steering impossible

28. Organization, not incentives _____________________________________________ _____________________________________________ Peer production limited not by total cost or complexity of project, but by modularity (how many can participate, how varied is scope of investment) granularity (minimal investment to participate) cost of integration

29. Organization, not incentives _____________________________________________ _____________________________________________ Peer production limited by modularity, granularity, integration Given a sufficiently large number of contributions, “incentives” at the macro sustainability level are trivial e.g., a few thousand “players”, a few hundred young people “on their way”, and a few or tens paid to participate for indirect appropriation will become effective

30. Organization, not incentives _____________________________________________ _____________________________________________ Peer production limited by modularity, granularity, integration Given a sufficiently large number of contributions, “incentives” at the macro sustainability level are trivial Detailed study of motivations remains important for micro- analysis, e.g. Clustering around projects--how to seed Directions projects take--steering

31. Value _____________________________________________ _____________________________________________ As capital component in information production declines, human creativity becomes salient economic good By comparison to firms and markets peer-production has information gains allocation gains

32. Value _____________________________________________ _____________________________________________ Information gains Human capital highly variable time, task, mood, context, raw information materials, project Difficult to specify completely for either market or hierarchy control In peer-production agents self-identify for, and self-define tasks Have best information about ability in time Mechanisms for correcting misperceptions necessary: e.g. “peer review”

33. Value _____________________________________________ _____________________________________________ Information gains Allocation gains Firms and markets use property & contract to reduce uncertainty of availability of agents & resources Individuals highly variable in fit to resources, projects, and each other Substantial increasing returns to size of set of agents permitted to act set of resources they may act upon set of projects they may pursue

34. A1A1 A2A2 A3A3 A4A4 A5A5 A6A6 A7A7 A8A8 A9A9 R1R1 R2R2 R3R3 R4R4 R5R5 R6R6 R7R7 R8R8 R9R9 Company A Company B Agents and resources separated into firms

35. A1A1 A2A2 A3A3 A4A4 A5A5 A6A6 A7A7 A8A8 A9A9 R1R1 R2R2 R3R3 R4R4 R5R5 R6R6 R7R7 R8R8 R9R9 Peer production community Agents and resources in common enterprise space

36. A1A1 A2A2 R1R1 R2R2 Option of A to use R Agents and resources option value when separated in bounded spaces

37. A1A1 A2A2 R1R1 R2R2 Option of A to use R Agents and resources option value when combined

38. _____________________________________________ _____________________________________________ Different kinds of commons have different solutions Information only a provisioning problem, not an allocation problem Primary concerns Defection through unilateral appropriation undermines intrinsic and extrinsic motivations Poor judgment of participants Providing the integration function The Commons Problem

39. _____________________________________________ _____________________________________________ Primary approaches to defection Formal rules, technological constraints, social norms to prevent defections (GPL, Slash, Wikipedia on objectivity) redundancy & averaging out--technical plus human (Clickworkers) Primary approaches to integration iterative peer production of integration reintroduction of market and hierarchy with low cost and no residual appropriation The Commons Problem

40. Thematic Analysis Trends, Values, and Implications _____________________________________________ _____________________________________________

41. A Moment of Opportunity Capital: 150 year trend of concentration and commercialization of information production mechanical presses & telegraph extend social reach and raise capital cost of communication to relevant community Public discourse adapts to increasingly one-way, from professional commercial producers to passive consumers Easily adapted to radio, television, etc. _____________________________________________ _____________________________________________

42. A Moment of Opportunity 150 years trend to concentrated commercial information production Organization: information economy arises to solve the control crisis of the 19 th century Economy concerned with control of material and social processes, not with cultural transmission Its cultural offshoots similarly focused on controlled demand and use _____________________________________________ _____________________________________________

43. A Moment of Opportunity 150 years trend to industrial model of information production Internet represents opportunity for radical reversal of this trend The “industrial information economy” _____________________________________________ _____________________________________________

44. The Human Economy _____________________________________________ _____________________________________________ Internet represents opportunity for radical reversal of this trend Extends reach by decentralizing the distribution function Physical capital diffuse, much of it owned by end users Routers and servers not qualitatively different from PCs as is a network broadcast station or cable head end from a television

45. The Human Economy Internet represents opportunity for radical reversal of this trend Human beings, rather than capital, become the organizing factor of our communications system and information environment _____________________________________________ _____________________________________________

46. The Human Economy Internet represents opportunity for radical reversal of this trend Human beings, rather than capital, become the organizing factor of our communications system and information environment “Post-industrial” stage relies on harnessing diverse paths for cultural transmission muted in the 20 th century by the economies of scale of the industrial information economy _____________________________________________ _____________________________________________

47. Structural Effects Shift from centralized organization to distributed collaboration Capital: concentrated investment to distributed investment Value: concentrated capture to distributed capture Human capital investment: controlled to collaborative At all layers of the information production system _____________________________________________ _____________________________________________

48. Strategic implication Shift from strict bifurcation of concentrated capital goods from distributed consumption appliances to distributed capital / consumption tools Base stations and handsets to user- controlled transceivers Broadcast stations and televisions to p2p desktops Switches and CPE to end-to-end software implemented voice over IP _____________________________________________ _____________________________________________

49. Strategic implication From strict bifurcation to distributed capital / consumption tools Goods valued for the options they make possible over time Automobile valued for autonomy it provides PC relative to dedicated appliance _____________________________________________ _____________________________________________

50. Strategic implication From strict bifurcation to distributed capital / consumption tools Goods valued for the options they make possible over time Toolmakers for distributed human capital can share this value with users through communication and collaboration tools _____________________________________________ _____________________________________________

51. The Stakes for Liberal Society _____________________________________________ _____________________________________________ social justice democracy US Europe autonomy Saudi Arabia

52. The Stakes for Liberal Society _____________________________________________ _____________________________________________ social justice democracy autonomy productivity as an efficient limit

53. If 1.Proprietary and market-based production have systematically dampening effects on democracy, autonomy, and social justice 2.Non-proprietary/commons-based and non- market production alleviate these dampening effects, AND 3.Productivity can be sustained with non- proprietary + non-market production Then The cultural economy enables an outward shift of the limits that productivity places on the political imagination The Stakes for Liberal Society _____________________________________________ _____________________________________________

54. The Stakes for Liberal Society _____________________________________________ _____________________________________________ social justice democracy autonomy productivity as an efficient limit

55. The Stakes for Liberal Society _____________________________________________ _____________________________________________ social justice democracy autonomy productivity as an efficient limit

56. If 1.Proprietary and market-based production have systematically dampening effects on democracy, autonomy, and social justice 2.Non-proprietary/commons-based and non- market production alleviate these dampening effects, AND 3.Productivity can be sustained with non- proprietary + non-market production Then The cultural economy enables an outward shift of the limits that productivity places on the political imagination A society committed to any combination of the three values must adopt robust policies to facilitate these modes of production The Stakes for Liberal Society _____________________________________________ _____________________________________________