The Key to Open Source Economics

The key is balance.

Your goal is to maximize total economic value.

Open source -- a shared commons which everyone can build on -- creates greater value than a proprietary model.

You can go too far, reducing inventives. But we've already gone way too far the other way. And our leaders, in an ideological frenzy that is Stalinist in its intensity -- just want to go further.

It is not true that selling off everything we have in common is going to maximize economic growth and value. We see that in the electromagnetic spectrum. Most of it is empty, most of the time. The unlicensed frequencies of the commons are an exception. They are exceptionally busy -- running voice calls, moving data around, opening garage doors.

Hertz for hertz, unlicensed frequencies generate more economic activity than licensed ones.

Software and spectrum offer a model for the future. This is where our technology comes from, and where the growth we need to address our problems will come from.

We need more knowledge in common, more inventions in common, more data freely available via the Internet in order to maximize economic value for everyone.

What's amazing is that this idea is at all controversial. It is emblematic of just how much excess ideology we have that what I've written above will be rejected by most Americans, and nearly all American decisionmakers.

But these are information age economic principles, tested and proven in the technology markets I've covered my entire career.

In the proprietary model there is no commons. Spectrum is all sold to the highest bidder. All words and ideas are "intellectual property," either aggressively sold by their owners or, in the form of "orphan works," still kept unavailable. The public lands are to be sold to whoever will exploit them for the greatest profit.

The result of this is a feudal system. That's what we're moving toward. A tiny elite with inherited power, untaxed and untouchable, with a mass of so-called Americans acting as their serfs.

The time has come to turn this around. And the way to understand what needs to happen is through the ideas (and ideals) of open source economics.

It's a balance sheet approach, not an income statement:

• A bigger idea commons.
• Faster access to that commons through free, open, real competition.
• Open spectrum.
• Balanced copyright and patent law, aimed first at creating more ideas and less at paying the grandchildren of old ideas' owners.
• Stewardship of land, water, and air.

These are basic principles. They will yield more growth for more people, and more wealth in total, than the proprietary model.