Knowledge should be free

While it is important to protect some aspects of intellectual property – for example to prevent plagiarism or passing off an inferior product as a trusted brand – many believe that preventing the free exchange of knowledge and ideas is a disservice to society.

A practical application of this philosophy is that wherever possible Geof Cox makes his work freely available to all, often through The Open Social Enterprise Training Materials Bank and The Open Organisational Structures Bank, currently hosted by The Common Cause Foundation

But why should knowledge be free?

The Rally Fighter. Open source development and local manufacturing are the core ideas behind Local Motors.The Rally Fighter. Open source development and local manufacturing are the core ideas behind Local Motors

Certainly, the 'open source' movement seems to have been gaining ground everywhere. Many people in social enterprise prefer open source software to proprietary applications: for practical reasons (it is both better made and cheaper), and political considerations (it is co-operatively produced and commonly owned). The political and the pragmatic advantages of open source are in fact intimately linked. What open sourcing does is say to the software users – all or any of them - here's the code, it's owned in common, if it goes wrong, or if it doesn't do something you want it to, let us know - or you fix it, we'll incorporate your 'patch' and give you credit for it. Everybody wins! It enlists tens of thousands of creative individuals – the 'community of developers' - in the production process.

In an Observer article on the launch of Microsoft's Vista – 2 years behind schedule and lacking most of the new features originally envisaged - John Naughton commented:

Microsoft is an extremely rich, resourceful company – and yet the task of creating and shipping Vista stretched it to breaking point... while Microsoft engineers were trudging through their death march, the open source community shipped a series of major upgrades to the Linux operating system. How can hackers, scattered across the globe, working for no pay, linked only by the net and shared values, apparently outperform the smartest software company on the planet? ...It could be that purely networked enterprises like the Linux project are actually a better way of producing very complex products.1

Technical innovations change things. The development of industrial production and improved communications made 'capitalism' possible (competitive firms in a market economy). We are now moving into a 'post-industrial' world: no doubt the fundamental organisation of production and consumption is being reshaped by the growth of knowledge-based and creative industries, by the comprehensive networking of the internet and instantaneous communications. 

But where will the fundamental reorganisation we are experiencing lead? Yochai Benkler is one theorist trying to come to terms with this question. He uses Coase's analysis of the emergence of firms in a market economy to explain what's really happening in open source or, as he calls it 'peer production' - the key point about open source not being that it's free, but that it is developed and owned and used in common - the 'peer production' terminology is important to Benkler because it links open sourcing with other co-operative production systems, like the free exchange of ideas and knowledge in academic science. While acknowledging that other explanatory frameworks - such as gift-culture - might be relevant, Benkler argues that transactional costs analysis provides a sufficient explanation for the emergence of peer production, thus placing it in the same theoretical framework widely accepted as an explanation for the emergence of capitalist firms themselves.  He then explores under what conditions peer production will be cheaper than either individual exchange or organising production in firms.  His answer: if both inputs and outputs are nonrival (such as information – it doesn't get used up), communications reach enough people at near zero cost, and the key resource is individual human creativity which cannot be reliably costed, but which self-selecting individuals can easily estimate for themselves.

Human intellectual effort is highly variable and individuated. It is very difficult to standardise and specify in contracts - necessary for either market-cleared or hierarchically organised production. As human intellectual effort increases in importance as an input into a given production process, an organisation model that does not require a standard contractual specification of the effort required to participate... and allows individuals to self-identify for tasks will be better at clearing information about who should be doing what than a system that does require such specification.2

So, with the 'pervasively networked environment' of the internet, with knowledge-based products, and so on, peer production must now emerge just as firms once emerged and came to dominate the market.

Moreover, the user-participation in open source substantially dissolves the seller-buyer relation by enabling all users, if they like, to play a creative role in production.  This challenge to classic formulations of alienation (as in Marx, for instance) feels very real: when you switch to open source software you stop just being a customer and get in touch with people again.  It's something like standing in front of the dozens of coffee brands in a supermarket and choosing the fair trade label.   Part of what you're doing is supporting a just cause; at the same time you make a connection with the real origins of the coffee and the real lives of the growers normally so disguised by the colourful wrappers.  What might have been a purely economic exchange in which people are alienated from their real social life – the grower losing what they've sweated over to an anonymous market, the consumer losing touch with those very human origins of their coffee – is retrieved as a real social action.

What we see in open source therefore may not just be a better way of producing very complex products, but a new way of fundamentally reorganising society. There will of course be a struggle over this future - and huge forces are in play.  At the heart of the struggle is knowledge, and open source is the pre-eminent practical challenge to old ways of organising things: I like to think of it as the intellectual property wing of social enterprise, bringing together a set of core values – centred on the belief that knowledge should be free – with very powerful business models.

Knowledge is the new driver of economic growth in the industrialised world. The annual growth rate in the knowledge-based and creative industries in OECD countries was twice as fast as service industries overall and 4 times that of manufacturing throughout the last decade of the last century. In the UK in 2001 there were for instance 60% more professional artists than in 1991, 55% more musicians, and 400% more people working in digital media. At the same time, the American copyright and patent industries increased their output at the rate of 5.8% a year compared to 2.8% a year for other industries.3 In one year, one multinational company applied for 3,415 separate patents.4

Nobody objects if an inventor gets a patent for a new mousetrap; but many people feel troubled when a company applies for a patent for a new mouse.5

For years environmental bodies have argued that in energy generation and many other technologies, such as refrigeration, corporate research and development is distorted towards areas where discoveries can be patented, when in fact simpler but less original technology might actually give us better fridges. Such financial distortion of research resources and objectives, as well as many of the wider ethical issues, are perhaps most evident in genetic and medical research. George Monbiot comments that:

New global trade rules have... allowed big corporations to patent crop varieties and, in effect, the genes of plants, animals and human beings. This has grave implications both for food security and the accessibility of medicines.6

Some issues here were illustrated recently when multinational pharmaceutical companies challenged a South African decision to permit the manufacture and importation of generic AIDS drugs. South Africa's health minister called the high prices for lifesaving medicines 'a crime against humanity'. The companies quickly dropped their challenge when their defence of patent rights became a public relations fiasco, but the effect of the decision to allow generic drugs was that the pharmaceutical multinationals either closed their plants or withdrew investment from the country. Michael Sachs, the ANC's head of policy, asked journalist Paul Kingsnorth

How do we engage with globalisation? And if we engage with it a way that is unrealistic, that is dictated by what are probably good principles, but which don't recognise the reality of a unipolar world with the strength of finance capital which exists out there... you can't just go and redistribute things in this era... you've got to play the game... you know, you will be defeated.7

I hope Sachs is wrong – it is, literally, a matter of life and death.  Lets put Sach's question - How do we engage with globalisation? - alongside Naughton's - How can hackers, linked only by the net and shared values, apparently outperform the smartest software company on the planet?.   Maybe, just maybe, information and communications technology has already insidiously changed the balance away from 'finance capital'. The inherent inclusion and democracy of pervasive networking does not sit well alongside centralised power, and makes it hard to disguise exclusion and exploitation.

For some, social enterprise is a way of generating employment or delivering other services and benefits to people excluded form market or other opportunities, so that society in roughly its present form can continue to function. But for others it's a way of demonstrating that production and trade can now be more effectively organised without greed and exploitation, with the ultimate aim of reorganising the world economy to extend justice and freedom to all. If you take the latter view, then social enterprise is firmly aligned with the anti-globalisation and environmental movements – themselves full of examples of networked organisations – and open source is the pre-eminent business model for social enterprise. I believe its also the way all business will be done in future.

  1. John Naughton, Why Vista will mean the end of the Microsoft monolith, The Observer, 10/09/06
  2. Yochai Benkler, Coase's Penguin, or, Linux and the Nature of the Firm, Yale Law Journal, 12/1/2002, p.30
  3. John Howkins, The Creative Economy, Thomson Derwent, 2001
  4. IBM in 2003 - James Heald, Patent Insanity, LinuxPro, July 2004
  5. John Howkins, op.cit.
  6.  George Monbiot, Patent Nonsense, The Guardian, 12/03/02
  7. Paul Kingsnorth, One No, Many Yeses, The Free Press, 2003

More on this philosophy can be found in Geof Cox's paper: Social Enterprise & Intellectual Property (pdf 247kb) or follow these links: