IP in an Open Source Society; who is paying who?

Kebede Mergia from the University of Art and Design Helsinki asks me the question, who is paying who in the Open Source society?

Unfortunately
it’s impossible for me to answer this open question in the length it
deserves, but I can point to a few resources on which I build my own
understanding of the topic. This is also good reading for anyone who wants to understand the larger picture related to intellectual property in an Free and Open Source Society.

What is your list? If you can recommend some additional sources, please comment below.

Intellectualy property and the societal concept of Open Source.

To understand the societal implications of Open Source, you need to understand the difference of Free Software and Open Source.

Free
Software, the concept put forward by Richard Stallman long before the
term Open Source was invented, tackles the freedom aspect. This is well
documented in the book by Mr. Stallman, entitled “Free as in Freedom”, available online.

To
understand intellectual property, there is probably no better source to
turn into other than Lawrence Lessig. In the roots of the philosophy of
Free Software there is the requirement to understand the importance of
free culture, how it’s preserved and how it develops further based on
earlier generations. IP can be an enabling or disabling factor
depending of how it’s used. This is further examined in Lawrence
Lessig’s book, “Free Culture”, available online.

While
Free Software is about freedom, Open Source is about practical use
value of the source code and the shared production model. It was also
invented to satisfy as a term the business use of free software, as FS
was politically very colorful until 1998 (when the term Open Source was launched), almost like a religion and as
such not very suitable for business types. The practical use value and
the birth of Open Source is well documented in the book by Eric S.
Raymond, “Cathedral and the Bazaar”, available online.

The financial flows, in other words, who pays who.Yochai
Benkler coined the term commons-based peer production, which examines
the economics behind Open Source development model. He analyses this
concept in his paper, “Coase’s Penguin and the Nature of the Firm”, available online. This concept is furter investigated in his book, “Wealth of Networks”, also available online.

He
gives much credit to Ronald Coase, who invented the transaction costs
theory. Anyone who wants to understand the transaction costs in any
business, should look in the work done by Ronald Coase, later improved by Oliver Williamson.

The
absolutely central thing to understand here is that production logic of
the industrial era is changing from centralized (central IP control,
centralized production, controlled distribution, few developers) to
decentralized (decentralized production, distributed costs, lots of
developers, IP in the commons). The driver here is that as you benefit
from the commons, you are likely to contribute something back to the
commons. This is technically enabled by the licensing, which often requires that
you give the next person the same rights you received in the first
hand. It’s a gift economy, but driven by economical benefits. It
supports free markets by creating an open market, rather than a closed
market. Bruce Perens, the author of Open Source Definition has also written about the economics of Open Source.

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