RE: GPL & commercial software, the critical distinction (fwd)

[Jim Choate <ravage@EINSTEIN.ssz.com>]

Forwarded message:

> Date: Wed, 7 Oct 1998 23:12:58 -0400 (EDT)
> From: Ryan Anderson <ryan@michonline.com>
> Subject: RE: GPL & commercial software, the critical distinction (fwd)

> Those were monopolistic markets?  If not, you're forgetting the whole
> basis of the discussion.

I apologize for the length and range of topics, I think I got carried
away and wandered a tad...:)

At the time. Absolutely. What was happening is that the markets were going
through a growth phase. This phase was partialy defined by the conflict by
the many small wanna-be's who got weeded out quickly. As time went on the
'families' developed. Such a period is the early 1900's and also during the
Irish expatriate phase for example. The size of the potential market is seen
as valuable by all. They percieve their resource control and quantity is at
near parity so small differences in strategy can become amplified. Very
shortly (at least mathematicaly) a cylcle of halving participants (knock off
the competition) and doubling of resource control occurs if we assume
parity. Now consider a slight increase in efficiency in one strategy over
another (or it could have a significantly longer life span) and the
geometric growth of resources control that occurs as a result. Historicaly
what one sees is a sudden increase in competition (of one form or another)
and then a falling off of competition and a reduction in participants. As
soon as the remaining participants percieve a market advantage and the
belief in sufficient resource stores the cycle repeats itself all over
again. Note that I don't prohibit 'brittle' markets that because of some
process or mechanism breaks out to 1-of-n survival rates. This can be
modelled quite easily using cellular automatons and playing with the rules
that define the 'neighborhood'. Only in a market that is no where near
saturation, meaning to have all consumers supplied (see your local grocery,
all one or two of them... one of the issue with produce market saturation is
the time-to-delivery for fresh produce. This helps explain why for a given
goegraphic area you see two or perhaps three major grocery chains.), do you
see a situation where businesses grow in parallel in roughly equivalent rates
(otherwise they die out). This is where model of ecology come into play, such
as the red and brown squirrel example I used a while back. You don't even
need overt conflict to saturate the market because of limited resources and
slight variances in survival strategy expressed over many generations.

An additional result of the monopolization in the real world are some
foot-prints behaviours of corruption and abuse. Such things as reduction of
product quality, increase in price to compensate for increase R&D costs
(there are now fewer bright people involved commercialy because business
can't afford to hire critical infrastructure people and they be flighty, at
least not for long), maintenance efficiendy of systems and mechanisms
falls-off, unsafe and life-threatening behaviours such as toxic waste dump,
etc.

Now some folks will scream and holler about law and police. But this turns
our model into a(t least) slightly regulated market, an entirely different
beast. Further there is the argument that 'the word' will get around. What
has never been explained is the mechanism this will occur with when the
producers (aka media) are effected negatively by it (how do they stay in
business?...advertisement, who buys advertisement? It ain't your grandma
that's for sure.). Given that there are no police or other enforcement bodies
(perhaps because there is nothing to enforce in a pure free-market economy)
even a rare resort to violence has huge pay-offs. That's just playing right
into human nature.

My argument is thus (and I intentionaly leave the issue of what is money out
for brevity. Consider it some system of value agreed upon at least partialy
by both parties):

A free-market exists. The market consists of two, and only two, types of
parties. The parties are called suppliers and consumers. It is possible for a
supplier to be a consumer at the same time. There are many suppliers and
consumers. The intent of a supplier is to make profit, profit above all else.
This profit is expressed as money paid to the share-holders. A share-holder
is a person or party who puts up money to a supplier to use for operations in
return getting a cut of the resultant profits (or losses). The limitations
and relationships are defined or mediated by contracts. A contract is a list
of issues and resolutions which both part agree to in order to pursue some
goal. It is implicit because of the requirement of 'fair competition' in
free-market economies that the agreement by a party to a contract is without
coercion of one form or another. The parties agree to contracts according to
some percieved strategy. Given the efficiency of a strategy (ie producing
n+i money for n initial investment, and make i some honker of a function
that goes through the roof if you please). Given sufficient time, even if
fair competition is taken as a given, the difference in strategies will
produce a monopolization. Either through elimination or by subsumption, two
or more businesses mergeing operations to reduce cost, increase efficiency
(to the advantage of the business, not necessarily to the consumer), and
reduce staffing and other resource sinks. The monolithic image of the
consumer base by the business only increases potential for price inflation,
quality reduction, etc. - where else you gonna go? Start your own business,
every time you don't get your way, in a new industry? Get real. It is a rare
day in *any* market model when a consumer begins direct competition with a
supplier (except in the very initial phases of technology development - ala
those jaunty young men in their flying machines).

I hold that *any* such market will saturate. In other words the number of
long-term suppliers will reduce such that only a hand-full and in some more
ideal cases a single supplier in a given industry or market. At least some
of the issues in that process will be the total potential sales of the
product, costs of manufacturing, complexity and resource requirements of the
process or mechanism, communcations speed, geography, etc. I do not believe
that given any potential business strategy it is guaranteed to fail. That in
fact some business strategies *properly* applied will in fact sustain
themselves indefinitely. Now considering the Prisoners Delima and the
maximal stratgy (ie play along and cheat occassionaly) are implicit in human
behaviour because of our biological history any system that we develop will
as a result have involvements of those issues. Because of that bias in
behaviour, because there is no third party to arbitrate disputes that would
be acceptable to either party (in principle at least), reduction in the
quality or quantity of product for a given price level, etc. the market will
eventualy provide these long-lived strategies ample opportunity to collect
resources and experience to such a level as to effectively shut out all
potential competition.


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