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The Nature of the Red Hat
#########################
:date: 2018-09-20T11:55:11
:status: draft
:category: computer
:tags: research, economics, FLOSS
Abstract
========
Article applies theory of XC`@coase:1937nature` to the
reality of the open source development communities and explains
role of Red Hat in these communities. Finds a similarity between
free market exchange and independent open source developers on
one side and firms on the other side.
Author argues, that despite obvious advantages of the open source
development model, the traditional centrally managed model of
development cannot be ignored completely, and it could be useful
to crystallize free-flowing open-source community development.
The Nature of the Firm
======================
Michael Tiemann described in
:xcite:`@michael_tiemann:2018awesome` how the open source
development model is superior to proprietary solutions because of
the lower transaction costs citing mostly
XC`@oliver_e._williamson:prize` and referring to
:xcite:`@coase_prize_nodate`
However, there is another part of the Coase’s thinking which
I believe is very relevant to the nature of larger companies in
the middle of the open source universe, which was not coverred in
the article.
VC`@coase:1990notes` describes the economical thinking of
that time in the issues related to the theory of firm as
basically following the classical theory of
XC`@smith:1993inquiry`, which was thinking mostly only about
the free market exchange of multiple independent producers and
considered that to be the efficient tool for organization of
economy. Professor Coase's thinking is (in contrast to majority
of economists even today) very strongly empirical so the first
impulse for writing the article was his observation that actually
the world doesn't work as predicted by the classical theory and
instead of majority of the economical exchange being done between
multiple small independent actors, major part of economy is
dominated by huge firms. After all, this is 1930s we are talking
about, the time of huge completely vertically integrated
companies owning everything from raw materials needed for
production to the company kindergarten for employees.
The critical insight of the article was discovery of *transaction
costs*. Coase's observation (quite commonsensical when you read
about it, but he was really the first one to focus on it) was
that transaction on free market do not cost only what's need for
procuring materials, manufacturing etc., but that there is a
quite non-negligible cost associated with finding a transaction
partners, negotiating transaction, policing performance of the
transaction, and also possible costs related to the enforcement
of the contract.
Contrasting to the transaction costs-bearing free market
contracts, organization of transactions in firms carries just
relatively negligible transaction costs. Superior just orders his
employee to do something and that's it. No transaction needs to
be organized. And although the transaction costs is certianly
never zero, it is quite smaller than what's required by the
contractual arrangements.
That is not to say, that firms are always the ideal solution
(otherwise, our economy would cosists only from employees and
their relatively few employers).
XC`@parkinson:1968parkinsons` shown as persuasively that the
cost of running firm is far from zero and quite often quite
non-negligible (the same thing has been described obviously by
many many others, we can start with XC`@weber:1966max` and
his concept of “routinization of charisma”).
Therefore, Coase continues, there is no silver-bullet for
business organization (which is what we see in reality), but
decision on which part of economy is organized based on open
market principles and which is run by firms is made based on many
factors described in the article.
.. Analyze exactly what the original article says, don't rely on Wikipedia!!!
Free software community development
===================================
I understand that this article will be read by people who know
about free software style community development more than I do,
but let me state here just an outline of what I think are the
most important components of such development style, so that we
know where I am coming from (and as a security for those few
non-technical readers I hope in my endless optimism to reach).
In this article I want to talk about the free software community
development as a style of software devleopment, without
questioning other possible understandings of it. Looking from
this point of view, this style of the software development grown
up as a reaction against the proprietary centralized
top-down-controlled style of the software development
stereotypically attached to the development in large commercial
software companies like Microsoft, IBM, or Oracle. Again, I don't
argue about other differences between free software and
proprietary software (especially concerning copyright law
issues), but they are not relevant for the point of this article.
The classical description of what I understand free software
community development is in XC`@raymond:1999cathedral`, but
I would argue that more important difference than between closed
and open style of development is the one between design-driven
and “anarchic? patch drive? bottom-up”.
.. *******************************************
no problems to organize a lot of resources, problem to do non-fun
work (cleanup of the code -- although LibreOffice seems to make
it work, why???; QA, testing, documentation).
it's difficult to do large design (even in the rare cases when it
is needed)
it is almost impossible to rationalize code (e.g.,
CryptoConsolidation; rewrites of small libraries to remove
dependencies on unmaintained code)
Organizational role of companies in the open source universe
============================================================
XC`@whitehurst:2011how`
Most of the advocates of the free software point out obvious
advantages of the development model in the manner very similar to
what are obvious advantages (at least to somebody who experienced
other arrangements of market) of the self-controlling free
market. EXAMPLES
.. bibliography::
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