Forwarded message:
Date: Wed, 7 Oct 1998 23:12:58 -0400 (EDT) From: Ryan Anderson <ryan@michonline.com> Subject: RE: GPL & commercial software, the critical distinction (fwd)
Those were monopolistic markets? If not, you're forgetting the whole basis of the discussion.
I apologize for the length and range of topics, I think I got carried away and wandered a tad...:) At the time. Absolutely. What was happening is that the markets were going through a growth phase. This phase was partialy defined by the conflict by the many small wanna-be's who got weeded out quickly. As time went on the 'families' developed. Such a period is the early 1900's and also during the Irish expatriate phase for example. The size of the potential market is seen as valuable by all. They percieve their resource control and quantity is at near parity so small differences in strategy can become amplified. Very shortly (at least mathematicaly) a cylcle of halving participants (knock off the competition) and doubling of resource control occurs if we assume parity. Now consider a slight increase in efficiency in one strategy over another (or it could have a significantly longer life span) and the geometric growth of resources control that occurs as a result. Historicaly what one sees is a sudden increase in competition (of one form or another) and then a falling off of competition and a reduction in participants. As soon as the remaining participants percieve a market advantage and the belief in sufficient resource stores the cycle repeats itself all over again. Note that I don't prohibit 'brittle' markets that because of some process or mechanism breaks out to 1-of-n survival rates. This can be modelled quite easily using cellular automatons and playing with the rules that define the 'neighborhood'. Only in a market that is no where near saturation, meaning to have all consumers supplied (see your local grocery, all one or two of them... one of the issue with produce market saturation is the time-to-delivery for fresh produce. This helps explain why for a given goegraphic area you see two or perhaps three major grocery chains.), do you see a situation where businesses grow in parallel in roughly equivalent rates (otherwise they die out). This is where model of ecology come into play, such as the red and brown squirrel example I used a while back. You don't even need overt conflict to saturate the market because of limited resources and slight variances in survival strategy expressed over many generations. An additional result of the monopolization in the real world are some foot-prints behaviours of corruption and abuse. Such things as reduction of product quality, increase in price to compensate for increase R&D costs (there are now fewer bright people involved commercialy because business can't afford to hire critical infrastructure people and they be flighty, at least not for long), maintenance efficiendy of systems and mechanisms falls-off, unsafe and life-threatening behaviours such as toxic waste dump, etc. Now some folks will scream and holler about law and police. But this turns our model into a(t least) slightly regulated market, an entirely different beast. Further there is the argument that 'the word' will get around. What has never been explained is the mechanism this will occur with when the producers (aka media) are effected negatively by it (how do they stay in business?...advertisement, who buys advertisement? It ain't your grandma that's for sure.). Given that there are no police or other enforcement bodies (perhaps because there is nothing to enforce in a pure free-market economy) even a rare resort to violence has huge pay-offs. That's just playing right into human nature. My argument is thus (and I intentionaly leave the issue of what is money out for brevity. Consider it some system of value agreed upon at least partialy by both parties): A free-market exists. The market consists of two, and only two, types of parties. The parties are called suppliers and consumers. It is possible for a supplier to be a consumer at the same time. There are many suppliers and consumers. The intent of a supplier is to make profit, profit above all else. This profit is expressed as money paid to the share-holders. A share-holder is a person or party who puts up money to a supplier to use for operations in return getting a cut of the resultant profits (or losses). The limitations and relationships are defined or mediated by contracts. A contract is a list of issues and resolutions which both part agree to in order to pursue some goal. It is implicit because of the requirement of 'fair competition' in free-market economies that the agreement by a party to a contract is without coercion of one form or another. The parties agree to contracts according to some percieved strategy. Given the efficiency of a strategy (ie producing n+i money for n initial investment, and make i some honker of a function that goes through the roof if you please). Given sufficient time, even if fair competition is taken as a given, the difference in strategies will produce a monopolization. Either through elimination or by subsumption, two or more businesses mergeing operations to reduce cost, increase efficiency (to the advantage of the business, not necessarily to the consumer), and reduce staffing and other resource sinks. The monolithic image of the consumer base by the business only increases potential for price inflation, quality reduction, etc. - where else you gonna go? Start your own business, every time you don't get your way, in a new industry? Get real. It is a rare day in *any* market model when a consumer begins direct competition with a supplier (except in the very initial phases of technology development - ala those jaunty young men in their flying machines). I hold that *any* such market will saturate. In other words the number of long-term suppliers will reduce such that only a hand-full and in some more ideal cases a single supplier in a given industry or market. At least some of the issues in that process will be the total potential sales of the product, costs of manufacturing, complexity and resource requirements of the process or mechanism, communcations speed, geography, etc. I do not believe that given any potential business strategy it is guaranteed to fail. That in fact some business strategies *properly* applied will in fact sustain themselves indefinitely. Now considering the Prisoners Delima and the maximal stratgy (ie play along and cheat occassionaly) are implicit in human behaviour because of our biological history any system that we develop will as a result have involvements of those issues. Because of that bias in behaviour, because there is no third party to arbitrate disputes that would be acceptable to either party (in principle at least), reduction in the quality or quantity of product for a given price level, etc. the market will eventualy provide these long-lived strategies ample opportunity to collect resources and experience to such a level as to effectively shut out all potential competition. ____________________________________________________________________ The seeker is a finder. Ancient Persian Proverb The Armadillo Group ,::////;::-. James Choate Austin, Tx /:'///// ``::>/|/ ravage@ssz.com www.ssz.com .', |||| `/( e\ 512-451-7087 -====~~mm-'`-```-mm --'- --------------------------------------------------------------------