The Success of Open Source

Summary of: The Success of Open Source

Author(s) / Editor(s)

Open source software, a form of social organization that configures intellectual property around the right to distribute, not the right to include, is a political economy and production system process, enabled by the Internet, that makes possible voluntary, distributed innovation and collective creation of complex public goods with neither the bureaucratic structure of the firm as we know it or the financial incentives of the market as we know them.

Publication Reference

Published in/by
Harvard University Press


  • The GPL (General Public License) uses copyright law to configure property around the right to distribute rather than the right to exclude. The GPL, by preventing any users from adding restrictions that could deny these rights to others, extends the freedom to run programs, to study how they work, to modify them, to redistribute copies gratis or for fee, to change and improve them and to redistribute modifications. This "shifts the fundamental optic of intellectual property rights away from protecting the prerogatives of an author toward protecting the prerogatives of generations of users."
  • Together with the Internet as a coordinating medium and a shared set of norms that constitute a community, the GPL creates a system of value creation and a set of governance mechanisms that enable the distributed production, maintenance, and development of highly complex software code.
  • The motivations of highly talented programmers to voluntarily contribute include the opportunity to learn the programming craft, the pleasure of working on high quality code, reputation capital, and contribution to a battle against Microsoft and proprietary software in general.
  • As important as the code is the process by which it is built. The open source community's organizing principles include "criteria for entering and leaving, leadership roles, power relations, distributional issues, education and socialization paths, and all the other characteristics that describe a nascent culture and community structure."
  • "The open source process has generalizable characteristics, it is a generic production process, and it can and will spread to other kinds of production. The question becomes, are there knowledge domains that are structured similarly to the software problem?" "The key concepts of the argument – user-driven innovation that takes place in a parallel distributed setting, distinct forms and mechanisms of cooperative behavior regulated by norms and governance structures, and the economic logic of "antirival" goods that recasts the "problem" of free riding – are generic enough to suggest that software is not the only place where the open source process could flourish.
  • "The key element of the open source process, as an ideal type, is voluntary participation and voluntary selection of tasks." Coordination costs are dramatically lowered by self-election: each contributor chooses what to work on, when to start, and when to quit.
  • "Eight general principles that capture the essence of what people do in the open source process: Make it interesting and make sure it happens; scratch an itch (link private contributions to a public good); minimize how many times you have to reinvent the wheel; solve problems through parallel work processes whenever possible; leverage the law of large numbers; document what you do; release early and release often; talk a lot.
  • Open source production is social because it is a product of voluntary collective collaboration, political because structures and organizations allocate resources and manage conflicts, technical because the final product is software code that must work, and economic in a fundamental sense of understanding the way individual choices about what to do with limited time and energy aggregate to a macrolevel.
  • Motivations for contributing include the fun of programming, the opportunity to learn the craft of programming, an urge to contribute to the open source community, ego-boosting (but not bragging – the norm is that the work brags for you), and reputation. A simple but fundamental shared belief is "the notion that personal efficacy not only benefits from, but positively requires, a set of cooperative relationships with others."
  • Rishab Aiyer Ghosh reframed the collective action problem of contributing to open source software by using the image of a vast tribal cooking pot into which one person puts a chicken, another puts in onions, and they each take out a bowl of stew; ordinarily, stews are vulnerable to free-riders who take out but don't contribute, but the Internet makes digital products like software "magically" non-rival: "If a sufficient number of people put in free goods, the cooking pot clones them for everyone so that everyone gets far more value than was put in.
  • The system at a whole benefits from riders, who help invoke network effects by growing the user base; further, if even a small number of free-riders who use but don't create code report the existence of a bug or ask for a needed feature, the effectiveness of the production system increases.
  • Coordination is mediated by social norms: ownership customs enshrined in the GPL; decision-making and support ownership customs; and the technical rationality of "let the code decide."
  • "End-to-end innovation goes a step beyond simply reduced transaction costs. It enables parallel processing of a complex task in a way that is not only geographically dispersed but also functionally dispersed. End-to-end architecture takes away the central decision-maker in the sense that no one is telling anyone what to do or what not to do. This is the essence of distributed innovation, not just a division of labor. There are no weak links in this chain because there is, in a real sense, no chain. Innovation is incentivized and emerges at the edges,; it enters the network independently,; and it gets incorporated into more complex systems when and if it improves the performance of the whole."
  • Four organizational principles needed for distributed innovation: "Empower people to experiment." "Enable bits of information to find each other." "Structure information so it can recombine with other pieces of information." "Create a governance system that sustains this process."
  • "The notion of open-sourcing as a strategic organizational decision can be seen as an efficiency choice around distributed innovation, just as outsourcing was an efficiency choice around transaction costs."
  • Hierarchies and networks exist in a dynamic relationship over time; one form may come dominate, or each can coexist in appropriate niches. "Most interesting will be the new forms of organization that emerge to manage the interface between them, and the process by which those boundary spanners influence the internal structure and function of the networks and the hierarchies that they link together." Future turmoil at this interface will be political as well as economic.
  • Open source process most likely to work effectively when potential contributors can judge the viability of the evolving product, have the information they need to make informed bets that contributions will add up to something useful for all, are driven motives beyond simple economic gain and have a relatively long "shadow of the future," learn by doing and gain personally valuable knowledge, share a positive norm about the value of contributing to the process.

The Internet and a decentralized means of social organization around a production goal make possible "distributed innovation" that radically reduces both transaction and coordination costs, making possible the collective creation of public goods. Although open source software production is the most successful example of this process, it is not the only one. Self-interest combines with a norm of sharing a public good that benefits all; learning, reputation capital, and solving a problem one already needs to solve ("scratching an itch") are individual motivating factors. Self-election eliminates the cost of hierarchical management – individuals decide what to work on. Free-riders contribute to positive network effects by increasing the size of the user base, and aggregate infinitesmal contributions into significant efficiency gains by occasionally reporting a rare bug or complaining about a missing feature.