Who Pays for Eben Moglen’s First Loaf of Bread?
Eben Moglen, lawyer with the Free Software Foundation, gave an amazing and inspiring keynote address at the October 2006 Plone conference in Seattle. For those of us not fortunate enough to witness it, it’s been posted on YouTube and was transcribed by Geof Glass.
It’s a tremendous speech, well worth your time, with many themes, but I’ve been obsessing over one in particular. Here’s an excerpt from the middle:
This is incredibly compelling – compelling enough to bring tears to my eyes. And all too relevant – it not only speaks to the world of software (and the dire issues faced by small nonprofits who can’t afford the software that they need to do their critical work), but the world of content. If the marginal cost of distributing, say, reviews of nonprofit software are zero, how can you justify charging for them?
But there’s a key logistical question implicit here: Who pays for the first loaf of bread- i.e. the software application, or the software reviews? If it costs $20,000 in time or money for the first loaf (or way more, in the case of a software application) but nothing for every copy thereafter, how do we answer our moral imperative to give it away to those who need it and can’t pay, while still allowing those baking the bread to earn a living and continue to make better and different kinds of bread?
I know that smarter people than I have thought this through (like Eben Moglen, for instance), but I can’t find anything that feels satisfactory to me for the reality in which I live. Yochai Benkler’s The Wealth of Networks is often referred to here, which offers:
Okay. Hmmm. So there is no question that there are some acts that people are willing to perform without money, but are there enough acts to fuel all the software and content (and everything else) that might be needed? In the realm of nonprofit software, I would argue that there clearly is not. People have as good intentions (or better) as anyone, but the needs are too specific to too small a group, and the people involved are too strapped for resources (both time and money) to make this model successful – to allow enough bread bakers to get the job done. Some alternate revenue models are possible – say, consulting or support for free software – but the nonprofit audience is so limited and so revenue strapped themselves that I have a hard time seeing this work.
In addition, there is also a key divide between the bakers and those eating the bread in the nonprofit sector. The free software movement’s greatest successes (Firefox, Linux, Apache…) have been in the realms in which the developers are creating software which they themselves need. This is underscored by Benkler’s inclusion of instrumental value. But in the nonprofit sector, we have too few bakers and need too many different kinds of bread to make this work. We could likely do better than we are, through more collaboration and rationalizing of true needs, but I don’t believe that we can effectively address nonprofit sector needs by relying on developers to build what they themselves need.
And truthfully, I’m just not comfortable with a model that puts the sole burden on the developers – the bakers. It forces us to find intrinsic satisfaction or crazy alternate revenue schemes for the bakers, and bypasses an audience that has, to my mind, a greater moral imperative: those who receive value from the bread. Those who receive value have a responsibility to contribute to its creation, each according to their means and the amount of value they gain.
But there’s a catch-22 here. Unfortunately, people aren’t very good at assessing the value received and their own means, and will all too frequently opt to pay nothing if that’s an option. So trying to get people to pay according to their means in the real word often requires enforcement. And as enforcement isn’t free, the marginal cost of the bread is no longer zero. Instead we’ve added costs in icky ways: trying to collect fair contributions from those who receive value. This, um, sounds like copyrights and proprietary software, huh?
So we’ve come full circle. There are a lot of people out there who would like to bake the bread and give it away for what those who need it can pay, but can’t figure out how to make a living while doing so. How can we sort this out? Who pays for those first loaves of bread?
It’s a tremendous speech, well worth your time, with many themes, but I’ve been obsessing over one in particular. Here’s an excerpt from the middle:
If you could make as many loaves of bread as it took to feed the world, by baking one loaf and pressing a button, how could you justify charging more for bread than the poorest people could afford to pay? If the marginal cost of bread is zero, then the competitive market price should be zero too. But leaving aside any question of microeconomic theory, the moral question, “What should be the price of what keeps someone else alive if it costs you nothing to provide it to them”, has only one unique answer. There is no moral justification for charging more for bread that costs nothing than the starving can pay. Every death from too little bread under those circumstances is murder.
This is incredibly compelling – compelling enough to bring tears to my eyes. And all too relevant – it not only speaks to the world of software (and the dire issues faced by small nonprofits who can’t afford the software that they need to do their critical work), but the world of content. If the marginal cost of distributing, say, reviews of nonprofit software are zero, how can you justify charging for them?
But there’s a key logistical question implicit here: Who pays for the first loaf of bread- i.e. the software application, or the software reviews? If it costs $20,000 in time or money for the first loaf (or way more, in the case of a software application) but nothing for every copy thereafter, how do we answer our moral imperative to give it away to those who need it and can’t pay, while still allowing those baking the bread to earn a living and continue to make better and different kinds of bread?
I know that smarter people than I have thought this through (like Eben Moglen, for instance), but I can’t find anything that feels satisfactory to me for the reality in which I live. Yochai Benkler’s The Wealth of Networks is often referred to here, which offers:
For any given culture, there will be some acts that a person would prefer to perform not for money, but for social standing, recognition, and probably, ultimately, instrumental value obtainable only if that person has performed the action through a social, rather than a market, transaction.
Okay. Hmmm. So there is no question that there are some acts that people are willing to perform without money, but are there enough acts to fuel all the software and content (and everything else) that might be needed? In the realm of nonprofit software, I would argue that there clearly is not. People have as good intentions (or better) as anyone, but the needs are too specific to too small a group, and the people involved are too strapped for resources (both time and money) to make this model successful – to allow enough bread bakers to get the job done. Some alternate revenue models are possible – say, consulting or support for free software – but the nonprofit audience is so limited and so revenue strapped themselves that I have a hard time seeing this work.
In addition, there is also a key divide between the bakers and those eating the bread in the nonprofit sector. The free software movement’s greatest successes (Firefox, Linux, Apache…) have been in the realms in which the developers are creating software which they themselves need. This is underscored by Benkler’s inclusion of instrumental value. But in the nonprofit sector, we have too few bakers and need too many different kinds of bread to make this work. We could likely do better than we are, through more collaboration and rationalizing of true needs, but I don’t believe that we can effectively address nonprofit sector needs by relying on developers to build what they themselves need.
And truthfully, I’m just not comfortable with a model that puts the sole burden on the developers – the bakers. It forces us to find intrinsic satisfaction or crazy alternate revenue schemes for the bakers, and bypasses an audience that has, to my mind, a greater moral imperative: those who receive value from the bread. Those who receive value have a responsibility to contribute to its creation, each according to their means and the amount of value they gain.
But there’s a catch-22 here. Unfortunately, people aren’t very good at assessing the value received and their own means, and will all too frequently opt to pay nothing if that’s an option. So trying to get people to pay according to their means in the real word often requires enforcement. And as enforcement isn’t free, the marginal cost of the bread is no longer zero. Instead we’ve added costs in icky ways: trying to collect fair contributions from those who receive value. This, um, sounds like copyrights and proprietary software, huh?
So we’ve come full circle. There are a lot of people out there who would like to bake the bread and give it away for what those who need it can pay, but can’t figure out how to make a living while doing so. How can we sort this out? Who pays for those first loaves of bread?
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3 Comments:
The absurdity of open source in the nonprofit sector is that we have institutions whose mission can be considered to pay for the first loaf of bread-- government, private foundations, major donors, etc.
We have intermediaries whose mission can be considered distributing the resulting flood of bread-- intermediaries, etc.
But in our sector there are few things with a true marginal cost of zero. And fewer institutions that (1) understand the economics and potential of open source software, reviews, etc. and (2) understand the complex ecologies required to sustainably create measurable outcomes.
People are still locked into the idea that paying for the first loaf of bread is about paying Idealware to do a review. I would propose it is paying a set of actors to implement an ecology that generates a sustainable stream of reviews. If money is generated in the creation and not the distribution of reviews, you have lots of zero marginal cost loaves of bread.
Hear, hear, David. I agree that in practice, even if the creation and distribution is sustainable in the long term, it's very difficult to figure out a way in the nonprofit sector to fund that very first loaf of bread that can get everything rolling.
I'm intrigued by your comment about generating money in the creation rather than the distribution of the reviews. Can you elaborate on that? What would be an example of generating money in the creation process?
The metaphor of bread is powerful, but it is in some ways misleading. Software differs from bread in important ways. Until a loaf of bread is baked, it is of little use; once it has been baked, it is complete. Software, in contrast, can be developed in small increments, and it continues to change over time. These are critical differences in addressing the collective action problem you point out. (They also differentiate software from reviews.)
I think David captures the essential point when he talks about "ecologies" - which is awfully close to Moglen's emphasis on production happening in communities. Commons production is a community enterprise. Your problem, I think, can be solved not by open source developers in general, but by the community of nonprofits for whom the software has instrumental value.
How can nonprofits produce the software they need when individual nonprofits have an incentive to free-ride? They could choose to use proprietary market relations to govern software production, but that entails inefficiency (transaction costs for enforcing copyright etc.), potential exploitation (once the break-even point has been reached, the benefit of zero-cost duplication all accrues to the copyright holder), and lack of control. This approach can can be worthwhile if a wider base of consumers is also subsidizing production, but that would not be the case for software uniquely valuable to nonprofits.
A collective action problem can be solved if a single actor has sufficient incentive to do so. So if software already exists that is close enough to what is needed, improving it may be worth the cost to an individual nonprofit regardless of whether any others agree to participate. Improvement is incremental, so that minimal commitments are needed for participation (I believe Benkler examines this). Once the improvement is made, sharing the result is not only free (as in Moglen's example of free bread), it can actually increase the value of software to its creator. Stephen Weber (in The Success of Open Source) calls this anti-rivalry: if software is useful to its creator, sharing it can result in others improving it, debugging it, documenting it, and so forth. If this happens repeatedly, it becomes a community practice.
Thus the challenge is obtaining an initial piece of software that's good enough to start using and improving. The first loaf isn't the final product: it is the point at which commons production kicks in. The wider open source community may have already produced just such software. As David says, this may be the mission of the nonprofits. Otherwise, the problem is coordinating the nonprofits to create the seed product. Paying is one reasonable option.
Unfortunately, the argument does not appear to be as strong for reviews. They don't strike me as incremental, and the anti-rival feedback effect doesn't apply (or at least not to the same degree: sharing can still increase the value of a review, just as word of mouth and interpretation can increase the value of a film). I think to understand how commons production might work here, reviews would have to be seen not as discreet entities, but as part of an ongoing process or creation (e.g. a collection of reviews) undertaken by a community.
Finally, the bread analogy is stronger in the context of Moglen's discussion of education. The metaphor works because duplication of existing books does not suffer significantly from the "first loaf" problem. Bringing education (and thus economic growth and bread) to the poor of the world is primarily dependent upon the use of existing knowledge in existing books. Furthermore, new books can be paid for so long as it is clear who can pay and who cannot. As I see it, the argument parallels that for patent-exempt AIDS medication in Africa.
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