Why Open Source is Unsustainable

Richard Epstein of the Financial Times has a serious-minded trouble-making piece on open source in today’s paper. He starts with a diversion, arguing that the submarine aspect of the GPL — incorporating open-source code into your proprietary app will make it open source — and the problem of unknowing use of of open source both mitigate against viral notions of open source propagation.

The preceding are fair points, but they are really only interesting to Richard Stallman and his over-orthodox anti-IP acolytes out there. The more interesting Epstein argument is this:

The open source movement shares many features with a workers’ commune, and is likely to fail for the same reason: it cannot scale up to meet its own successes. To see the long-term difficulty, imagine a commune entirely owned by its original workers who share pro rata in its increases in value. The system might work well in the early days when the workforce remains fixed. But what happens when a given worker wants to quit? Does that worker receive in cash or kind his share of the gain in value during the period of his employment? If not, then the run-up in value during his period of employment will be gobbled up by his successor – a recipe for immense resentment. Yet that danger can be ducked only by creating a capital structure that gives present employees separable interests in either debt or equity in exchange for their contributions to the company. But once that is done, then the worker commune is converted into a traditional company whose shareholders and creditors contain a large fraction of its present and former employers.

Basically, he is arguing that people can’t cash out of open source. It is true, they can’t — you can’t particpate in some Sourceforge project, stop, and then sell your interest — but I’m not convinced people care. Many people working on truly open source projects do it out of interest, out of a need to working on interesting problems, and, this is a dirty truth, because it is good for their CV to have worked on neat stuff.

Related posts:

  1. Is the end of Netscape the end of open source?
  2. The Open Platforms Paradox
  3. Do Execs Open Email Attachments?
  4. Brad Silverberg: Microsoft’s Price Problem
  5. Reed Elsevier, Open Publishing, and Investment Shorts


  1. jeet says:

    but you do get value out of open source. If I am running a website or putting together some sort of small device modifing the source code to fit my needs is cheaper and eaiser than in-licensing some third party OS. Plus I now can fork the software and even though my competitors can see / use the code I retain control of the direction of the fork.
    anyways I should be worried about making money with the overall service/ device and I can layer a proprietary version of whatever software I want over the open source version.
    those are the gains of open source, you add to the project and get to use the results for free and immediately. no need to wait for some sort of “cash-out.”