Eric Doviak
Doviak.net 
Economics and Public Policy Analysis
 
The Alternative to Anarchy
 
While reading Richard M. Stallman's Free Software, Free Society, I paused to think about the number of times I have seen friends burn an installation CD. On most of these occasions, a professor required proprietary statistical software for a course he/she was teaching and students responded by sharing the software.
 
What my friends did was illegal and they knew it was illegal when they did it.
 
I guess one could argue that the software companies weren't harmed. After all, students become addicted to the software and
(after graduation) beg their employers to purchase licenses for it. Notice however that that argument is a justification for breaking the law.
 
If we loosely define anarchy as "a state of lawlessness" or "non-recognition of authority and order," then proprietary software fosters anarchy. Proprietary software breeds an environment, in which people do not feel guilty about breaking the law. That's not a society that I want to live in!
 
Fortunately, there is an alternative: Free Software. 
 
In Stallman's formulation, "Free Software" is a matter of liberty, not price. Think of "free" as in "free speech," not "free beer." Free Software comes with four freedoms:
To ensure that the software remains free, the GNU General Public License (GPL) requires that -- if you distribute copies or modified versions of the software -- you must pass along the same freedoms to the recipients of the software.
 
For the freedom to study the source code to be meaningful however, you must pass along the source code in order to pass along the freedom.  
 
Critics of the GPL object to passing along the source code. They would prefer to keep the source code a secret and sell their own modified versions for profit.
 
I have no objection to someone making a profit, but I do object to someone violating license agreements. After all, if a proprietary software company expects society to respect its license agreements, then that proprietary software company must also respect the GPL.
 
More importantly however, there's a lot of money to be made by distributing Free Software.
 
The GPL expressly encourages you to sell the software for as much as they're willing to pay. In practice however, the freedoms to use, modify and distribute GPL software enforce competition in software development and the competition drives the price of the software to zero.
 
So how do Free Software developers make money?

 
Many developers make their money by selling complementary goods: support, installations, customizations and training. For examples, take a look at SourceForge's Marketplace or consider the fact that corporations write most of the code for GNU/Linux. They're not doing it for charity. They're doing it to sell product!
 
I won't argue that Free Software is more profitable than proprietary software. All else equal, a monopoly provides a higher rate of return to its shareholders than a firm in a competitive industry. Nonetheless, one can make a profit by distributing Free Software.
  
Finally, there are very few things you can do with proprietary software that you cannot do with free software. In fact, Free Software is often better than proprietary software because so many people (and corporations) contribute code to Free Software products and because the Free Software market is so competitive.
 
In summary, Free Software fosters competition among software developers (enabling us to create a high-tech future), it provides a return to shareholders and it prevents our society from sliding into anarchy.