Furthermore, von Engelhardt and Maurer (2010) provide an important clue to choosing this mix. They point out that the existence of CSS code increases OSS output and vice versa. To see why, consider an all-OSS world in which each company offers consumers exactly the same shared code as every other company. By definition no company can then compete by writing more OSS code than its rivals. This lack of competition suppresses code production for the same reason that cartels suppress output.
[PJ: This statement reflects misinformation. Their premise, contrary to real-world facts, is that if everyone uses the same code, it’s a cartel, and no one will write new code. The assumption is that large companies are writing the code, in a kind of joint work. But in reality, Linus doesn’t work for IBM or Sony or any company, and Linux wasn’t ever under the control of any company or group of companies, and it still isn’t. Plus Linux is just the kernel of GNU/Linux systems, and on top of the kernel there are thousands of applications, which vary widely from distribution to distribution. Even the kernel can vary. In fact, a recent war over what applications should be put on Ubuntu’s live CD happened precisely because there are so many applications in OSS that are not identical but do more or less the same thing, it’s actually hard to narrow down to just a few.
So that premise is simply factually wrong. Perhaps they’ve never actually used Open Source? But anyone in the FOSS community knows that new code gets written for the simple reason that people want their software to do exactly what *they* want it to do, and look the way they want it do, and that results in enormous variety because people are a varied lot. And the licenses allow anyone in the world to write, modify and share. That, historically, results in faster innovation. How could it not? Never in the history of FOSS has there ever been stagnation in development. Any government tempted to listen to contrary advice would do well to try out the top 20 or so distributions, and you will see what I mean. Perhaps it would be best if governments didn’t try to set policies until they at least get their facts right. And may I inquire why there should be a quest for “balance” between FOSS and closed, proprietary, locked-in systems? Why shouldn’t governments just use what they find most meets their needs? I know Microsoft argues for a kind of “balance”, but they make money from such a pitch. Instead, the authors suggest this: “Detailed analysis suggests that the best solution would be to tax OSS firms and use the funds to provide tax breaks for CSS firms.” They suggest that taxpayers subsidize firms like Microsoft? Are they kidding?] -— Should governments promote open source software? | vox - Research-based policy analysis and commentary from leading economists - article with comment from PJ - read carefully, this is very significant for IP.