[ox-en] Above average profit and Red Hat
- From: johan soderberg <soderbergjohan yahoo.com>
- Date: Wed, 17 Sep 2003 12:53:59 -0700 (PDT)
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Hi!
I have tried to figure out a Marxist respons, to the blind belief that business models based on free software are predetemined, in Shumpeterian creative destruction, to overtake IP monopolies as a dominant form of capitalist production. Comments anyone?
Concept of ?falling rate of profit? and above average profit is helpful. Labour is the only source for creating surplus value. It is possible, however, in some circumstances, for the capitalist to acquire more surplus value than he employs labourers. Sometimes, the capitalist manages to position his venture, so that surplus value produced by labours employed by other capitalists, will flow to his pockets. Primarily, extra-profits are harnessed when a capitalist introduces new process technologies (fixed capital). By rationalising and automating a production line, the expense for producing a unit falls below the social average paid by other capitalists for making the same unit. The ?bonus profit? is only temporal, as other capitalists will catch up with the same technological advancement. When most capitalists have adopted the superior way of doing things, the average production cost will even out at the new, lower level, and the extra-profit vanishes for the individual capit!
alist.
Point is, surplus value is transferred to the degree it is a deviation to the norm.
The success of Red Hat could be looked upon as a variation on this theme. Companies like Red Hat and Cygnus hire labourers, to develop source code, to provide supportive services, and to brand the company. These activities generate some surplus value. However, the input of waged labour contributed by the company is marginal to the vast mountain of gratis, collective labour that constitutes the core of the software. In this way, the price for a free software product is cut far below the social average for an equivalent product made within the intellectual property regime. In the case of free software-based companies, extra-profits derive not from the ability to reduce work staff by means of technological innovation, but by emigrating paid labour to un-paid labouring communities by means of organisational innovations. It is an open question whether the IP-dependent section of the capitalist class (Microsoft, Hollywood) can follow suit and close the gap in production costs, wit!
hout
disbanding their own social existence in the process. Microsoft?s ?shared source? policy, where selected customers are given restricted access to Microsoft source code, is an attempt to close in on the distance in costs between propertarian and free software coding. However, the desire to stay in control will probably cripple such efforts. I?m inclined to believe that they cannot appropriate the free software model and sustain a high profit level. In that case, Cygnus/Red Hat extra-profit business model will continue to thrive for a long time, living from the differential level of IP-high cost production. But, obviously, it is therefore a false reliance to believe, that free/open source business ventures could, in a process of ?creative destruction?, supersede and replace IP-monopolies as the dominant form of organising capitalist immaterial production. Their profitability only realise itself in relation to the high social production cost of IP-monopolies. In the end, they !
are just
as dependent as Bill Gates are on a legislation that increases the average production cost for immaterial labour.
/Johan
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