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Value of software (was: Re: [ox-en] New pages in the introduction)



Hi Graham and all!

2 weeks (20 days) ago Graham Seaman wrote:
Oh dear, here we go... another long argument discussion
 ;-)

But that's why we're here, aren't we?

On Mon, 13 May 2002, Stefan Meretz wrote:
whow, that's a quite important topic you brought up, which not had been
discussed on ox IIRC. It was discussed on another list (called "joint")
before having ox, Stefan Mn, do you remenber? Long time ago...

Vaguely.

I remember, that Graham brought that issue up sometime ago in a paper
he asked me to comment. But I didn't see it published anywhere :-( .

Am Freitag, 10. Mai 2002 00:08 schrieb Graham Seaman:
Commercial software is not a commodity, and has no value. It has no
value in the sense that it has no price (you cannot buy software, and
eg. Microsoft's EULAs always say 'you have not bought this software').

I'm not so sure, whether this is the whole truth. Isn't there software
which *is* actually sold to customers? It won't be software with a
wide use of course, because then scarcity would be a problem. However,
in niche markets you may actually sell (all the rights on) a software
you have written to your customer. BTW usually a customer in a niche
market won't be interested that competitors also get "their" software
which they can enforce by buying all the rights at the software.

M$ on the other hand is another case. They are selling (the rights to
use) software which everyone can use and most people don't give a shit
whether others can use the same software. However, M$ being actually
kind of greedy, is trying to create a M$ tax - which is kind of evil
even in a capitalist sense.

It has negligeable value in the classical and Marxist economist's sense
of labour value, since the costs of creating the original are a fixed
cost, like the design of physical objects, and the labour involved in
reproduction of software is almost (not quite) zero. It has no value in
the neoclassical sense that the marginal cost is zero in the limit.
However you look at it, it has no value. So, it is also not a
commodity, at least not in the Marxist sense in which it's used on the
'blotter' page, any more than free software is.

IIRC "commodity" is defined as follows:
- a good which is made by independent _private_ producers
- the good has only a value if it is _exchanged_: no exchange, no value
This means:
- the value of the good appears as exchange value
- "value" is comparison of amount of labor of exchanged products
- not single products are compared, but a product with a "mean product"
- "value" and "commodity" are notions of societal mean

Applied to software this means that all labor necessary for development
and production is distributed on all specimen successfully exchanged on
market. It is more or less the same situation as in "normal" products.

No, software is not exchanged - at least not with consumers. I don't see
why the situation is different from TV programs: there is a market among
TV companies for programs, and they sell them to one another. But they do
not sell them to the people who watch them.

Sure they do. The more clear form is pay TV (which at the moment flops
greatly in Germany ;-) ) and the other form is that the consumers
"pay" by accepting being harassed by ads.

However, of course (only?) in Europe you have a rather big set of more
or less state controlled or other public TV stations.

[Note: the above statement isn't entirely true - it is possible to have
a market for program copies based on their real value; you can see it in
Russian street markets, for example. This value is derived from the value
of the CD, depreciation of the CD copier, labour of the person running the
copiers, etc. But that isn't the kind of market we're talking about here]

But it is an interesting example of a situation where actually (only)
the labor put into the copying software is paid.

The only difference is: The development expense goes to 1 and production
expense to 0, while in normal products you have, say 0.5 to 0.5 or 0.7 to
0.3 - neclecting all other "expenses" (which could very, very high: ads,
lawyer etc.).
How can development expense go to 1? If you take a single product, then
its development cost goes to zero as soon as you look at marginal costs
(by the definition of differentiation). I think the only way to salvage
your argument is to say that software necessarily requires continuous
upgrades, so development cost is not a constant. But my counter-argument
would be that continuous development (eg Word->Word97->Word2000->...)
is necessary only to keep people paying repeatedly..

Ah, I guess I understand what you're saying. Once an information good
has been developed all of its development costs are paid and in all
eternity there will be mostly costs for copying it. The bible comes to
mind which has been "developed" ages ago and since then only copied
and translated.

Therefore, my counter argument is: Because "commodity", "value" etc is a
societal notion, you cannot compare a single specimen of "software" and a
single specimen of "car". In general and concerning the question of being
a commodity the situation in software is only quantitatively different
from other products.
Counter: because 'value' is a societal notion (linked with the idea that
you have to pay for things because other people work to make them),
and people are perfectly that software has no value, people have no
inhibitions about copying software, taping TV programs etc. It is not
stealing, as taking things with value would be.

All the same, I agree it's 'only' quantitatively different. There's
nothing magic about software itself. But the quantitative difference
between the costs of copying software, or of copying a TV program,
and of copying a chair, is so big that saying 'only' quantitative
makes the difference sound less than it is. When we have home fabbers
that difference will disappear ;-)

Good point. So in a sense (home) fabbers may be thought of as the CD
burners of the future.

If I'm right, saying 'free software is not a commodity' does not
distinguish it from commercial software, which is also 'worthless as
the air we breathe'. One possible conclusion from that is that all
software should be free, as should all formulae for medicine, all
genetic knowledge, etc. etc. (as opposed to having to create an
equivalent, special 'free' version of all the existing commodity
knowledge).

Well, what keep us off from saying: Human activities are "worthless as the
air we breathe"? For me setting some commodities "free" can only be the
first step. I cannot see, that anybody will be more convinced, if you
argue, that 'software is not a commodity' - by "nature" or what is your
ground? All was societal made...

My ground is also social. If something takes very little work to copy, it
is impossible to make it into a real commodity. It is possible to pretend
it is a commodity (put a CD in a big empty box), but it is still not
really a commodity, since commodities are based on work to produce things
for exchange in a market. This is a social fact, not a natural one.

Well, I'd question that this is much more social than other sort of
property. Property is something formal which always explicitly needs
to be enforced - so it's not natural in any case. You can see that
well in South America where landless farm workers occupy private
property not used by their owners. There are of course countless
examples.

So what *exactly* is the special thing given by the option of digital
copy? In a way it seems to me that it is even more unclear that by a
pirate copy you are actually stealing something. But isn't this only a
question of how a certain ethic has developed?

And
if the core activities of society are not based on commodities, but on a
kind of rent, then this is a big problem for capitalism as a system, which
it will only be able to patch over by more and more unpleasant laws,
destroying more and more of our freedom. Rent is compatible with
capitalism, but can't be the basis for the whole system without the
system becoming something else.

That's a good point!

Another difference: most medicines can be produced very cheaply (the value
of a bottle of pills is mostly very close to the value of a CD of
software), and prices are kept artifically high by IP law.

Yes, the medicine sector is an interesting example. Do you know
exactly how much the "copying" of a medicine costs? Is it really that
cheap?

Medicine should
be free (not necessarily as in beer, and not without legal controls over
manufacture and testing, but without restrictions caused by IP law). The
countries asking for the right to make their own AIDS medicines at their
true value are doing so on the same grounds as people who say software
should be free. But if you say software/medicine have value because of an
increased immaterial part, it is harder to see such common ground.

Actually I thought about having this issue on the Oekonux conference,
but I don't have the slightest idea whom to invite and for what exact
issue.

An oekonux argument might be: 'They have value, so it's normal to produce
them as commodities. Unless there are groups of chemists designing new
medicines without pay, there is no non-commodity alternative to the
current system'. Maybe that's unfair to oekonux, but it sounds a logical
consequence to me - oder nicht?

May be that's the practical basis of all steps towards a GPL society:
That knowledge workers of all disciplines in their Free time start to
develop Free goods. Here the question of the ownership of means of
productions comes into play, which is for sure different between Free
Software (PC) and a medical drug (a research laboratory which lots of
expensive equipment - I guess). However, gene technology seems to be
pretty cheap :-)-: .


						Mit Freien Grüßen

						Stefan


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http://www.oekonux.org/



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