Collaboration vs. Competition: why our Future is Open Source

Fig. 135Two Neanderthals need a bow and some arrows. Grrmt can build a bow in 5 hours and arrows in 4 hours. Aaaargl can build a bow in 2 hours and arrows in 3 hours. Thus, in order to build what they need, Grrmt will take 5+ 4 = 9 hours, and Aaaargl will take 2 + 3 = 5  hours. 14 hours total will be spent by the both of them.

Now what happens if our primitive friends talk to each other, specialize in what they do best, and trade? Something extraordinary. Aaaargl should have no interest doing that, as he's faster than Grrmt in everything, right? Right?

Wrong. If they each specialize on what they do best, Grrmt will have to build two sets of arrows in 8 hours, and Aaaargl will have to build two bows in 4 hours. Grrmt and Aaaargl both saved one hour. Both of them, even "faster at everything" Grrmt, because he was allowed to focus on what he's fastest at being faster.

If they compete, Grrmt and Aaaargl both lose. If they collaborate with each other, they both win. Competition can be detrimental to everyone? Who would have known? And this is without even taking into account that by specializing, one naturally gets better, and one can industrialize processes.

Of course, competition comes with its own dynamics of supply and demand that we've all been taught. But is competition really beneficial and stable? The supplier's interest is in the prices being as high as possible. He can achieve that by organizing scarcity. But how does he organize scarcity if he's competing in a free market? Why, by eliminating competition and becoming a monopoly of course... In other words, we have one agent in each transaction whose best interest is to eliminate competition, and the other whose interest is to maximize competition but that has practically no means of doing that, except for the collective control of governmental anti-trust laws. If left to evolve on its own, a competitive system spontaneously decays into the elimination of competition.

Every single year that I've attended the Microsoft company meeting, I've seen Ballmer jumping around the stage and getting borderline hysterical about being number one of this, becoming number one of that, and generally poo-poo-ing the competition. It's only natural: suppliers want to become monopolies, they want to control the market so that they can impose their prices.

Now look at a farmer's market. Do the cheese sellers there want to crush each other and dominate the world market of Gouda? Most of them don't, but they still do fine because they act locally, without excessive greed and in a collaborative environment. In this sense, it's not between the cathedral and the bazaar that there is a contention, it's between the bazaar and Wal-Mart.

One often talks about "competitive advantage". But there is also a collaborative advantage! Competition makes losers, that's inevitable, but collaboration makes it possible for everybody to win.

Open Source, by its very nature, is the ultimate collaborative mechanism. It eliminates competition, not by crushing it, but by replacing it with sharing and emulation. It makes sure that there is always a way out of monopolistic situations. It replaces the advantage of exclusive assets with the advantage of know-how.

Above all, it replaces top-down innovation with network innovation. What we are finding out is that many connected small structures are often better at innovating than a few big ones.

If Apple comes up with something brilliantly designed (as it often does), Microsoft's first reaction is fear, and then it is to move a few hundred engineers to the project of reproducing and improving on the idea, which usually takes at least two years, and gives mixed results. This is a reactive, sluggish and inefficient approach to innovation.

In Open Source, when a new innovation appears, it's never met with fear but rather with enthusiasm. Reactions vary from "wow, that's neat, and it solves my problem exactly, I'll just use it" to "wait a minute, that gives me a great idea". When an improvement is made, it's contributed back, and everybody wins. It's a much saner, productive and efficient way to innovate.

Of course, Open Source has its lot of problems, but it's nothing that good engineers can't work with.

It started with software, but it's spreading fast. The Maker and Open Source Hardware movement are another step, but we also see forms of crowd sourcing appearing everywhere in society: health, news, literature, encyclopedias, science have already jumped on that train. but I think there is another domain where this wind of freedom and collaboration must spread, and that is democracy. I don't expect that to appear first in the old Western democracies, but rather in all those countries that are awakening from the deep nightmare of dictatorship, and where everything remains to be invented.

Tags: Technology, Democracy

Saturday, October 8, 2011 10:35:39 PM

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  • Ludovic said

    Great post.

    It just seems to me you're jumping from the tale of Grrmt and Aaargl to open-source and crowdsourcing a bit fast. The only thing that tale showed me was that staying focused on your core business is more productive than trying to sell all kinds of products. But it didn't say anything about the 2 Neanderthals sharing any knowledge.

  • herzmeister said

    I'm a dreamer and I prefer collaboration too, but it's a far away utopia to change our whole economy like this because humans have to overcome their selfishness, their greed, their fears, their shadows first...

    The argument with the monopolies is wrong however. Of course corporations _strive_ to become monopolies, but in a perfect world they can't, because a truly free market will always self-regulate - http://www.youtube.com/watch?v=tdLBzfFGFQU - It's always lobbying and the resulting governmental misregulations that create monopolies.

  • bleroy said

    @herzmeister: the thing is, it's already changing, and it's viable because it *works*. It already does.
    I don't buy the dogma that a "truly free" market will always self-regulate. I think it's absurd today to argue that it's governments that create monopolies. Quite the reverse, it's the natural tendency a free market will follow. Friedman in that video is wrong as is apparent when he talks about domestic monopolies and how they would be overcome by the rest of the world in a free market. We have global monopolies today that prove him wrong. Then he takes a few examples of monopolies of the time, and they have all been obsoleted. Today's monopolies owe nothing to government intervention. Note that the two examples he gives of monopolies that are maintaining themselves without government intervention still exist today whereas all his other examples of government-supported monopolies have fallen. He thus showed inadvertently how the reverse of his thesis would be true in the long run. Quite remarkable actually, thanks for the clip... It's not as if Libertarians have an example of a "truly free market" to prove their assertions in the first place, they are just pontificating on ideal hypotheses that will never exist, and constantly moving the goalpost. It's the economics of the gaps. Every time something contradicts their theories, they point at some government intervention as the culprit, no matter how absurd the claim is. It's a cult.

  • herzmeister said

    The economics of gaps surely would work. When a monopolist starts discriminating and raises prices, of course there will be plenty of opportunity for competition.

    The problem is also that we have a whole lot of governmental and legal infrastructure in place that favors consolidation and monopolization, e.g. social security overhead and patent laws.

    That aside, I agree with you, I always found it a waste of talent and resources when engineers at BMW and Mercedes breed separately over the same problems in secrecy.

    But sadly, collaboration yet only works for some open source software projects. There's much more to it when it should be applied to a whole economy. Some will outcry it'll be socialism then. Not that socialism is bad per se. Socialists claim that there never was "true" socialism in place (much like the libertarians about true capitalism).

    But what history seems to show about why socialism doesn't work is because people are different. Some *want* and *need* competition and outsmart others in order to excel, and make valuable contributions to society that way. Maybe it's merely a human weakness. But we can't coerce them unless we want a totalitarian regime. So it's hard to find a political and economic system where resources won't be wasted, everyone will fit in and be happy with it.


  • bleroy said

    But a monopoly has the means to destroy any competition, that is the whole point of building one. The opportunity exists, yes, but the monopoly won't let it be seized. We have plenty of recent examples of that. Microsoft comes to mind: without strong government intervention, the company would have happily continued its intimidation practices and would have continued to crush the competition, large or small. It still does, to an extent. I for one would have been happy to see the company split, and I would bet it would have actually done better but that's another debate.
    I forcefully disagree that a collaborative system would lead to socialism (whatever that word means, as it has many different meanings around the world). First, it's not a dogmatic system that I'm advocating for here. Quite the reverse. I am not saying that collaborative open source systems will wipe out competitive systems. What I would say is that during the last two centuries or so, the system of capitalism has tried very hard to become the exclusive, and to an extent totalitarian model of economy. This is a relatively new thing by the way. I think there is ample room for another model that is actually already showing that it works better, at least for some things (I've cited near the end of the post some examples in other disciplines than software). Again, it will not replace capitalism, because, agreed, that works for some. What I'm saying is that this alternative model will take more importance and will permeate many currently competitive organizations. Not to the point where it will be the only game in town, but to the point where the system is more open, harmonious and open to new ideas.
    The system that I'm calling for could be called "whateverworksism", a system where we are willing to try anything reasonable and see what sticks. Certainly not one where we enforce what we foolishly think is the universal answer to everything, be it The Holy Free Market or Totalitarian Communism. Diversity, openness. Notice how well open source fits with that idea.
    Don't get me started on patents. No wonder monopolies love them.

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