The Economic Paradox of Open Source Software: How Free Libraries Power a Billion-Dollar Industry
By
Andrew Nesbitt
Summary
This article examines the economic paradox of open source software libraries, which defy traditional economic models by being non-excludable, free, and produced mostly by single maintainers with massive free-riding by consumers. Despite this seemingly unstable arrangement, open source libraries power the commercial software industry, with tools like npm delivering hundreds of these "impossible goods" in seconds. The article explores the tension between open source production and market economics, highlighting the sustainability challenges faced by maintainers who support infrastructure used by millions.
Source
bskyThe Economic Paradox of Open Source Software: How Free Libraries Power a Billion-Dollar Industrynesbitt.ioKey quotes
· 3 pulledIf you handed an economics undergraduate a description of how open source libraries are produced, without saying what it was, and asked them to predict the outcome, they would tell you it doesn't add up.
Non-excludable goods with no price, no contracts, no liability, a median producer headcount of one, and near-total free riding by consumers: there is no model in the textbook under which that arrangement produces anything stable.
Then you run npm install and a few hundred of these impossible goods arrive in seconds, and the commercial software industry sits almost entirely on top of them.
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