Competition is good for us, part 2

In part 1 I explained why competition is good for us because it makes things better, cheaper and more diverse. But one question remains: What the people who loose their jobs because of competition? At least competition is bad for them, right?

And of course, in the short term that’s true. They would, without competition, still have their jobs. But when looking at it in the long term, things look completely different. When one company has to close down because another company made something that was better or cheaper then they did, this is just a temporary setback. Because the money that are saved buy buying the cheaper product does not just disappear. They get used somewhere else, and more jobs are created in that sector instead. The people that lost their jobs may have to change their type of work, but competition has not made the available jobs fewer. And this works even across borders.

With cheaper clothes and toys thanks to imports from China, families with kids get more money over. Which they spend on buying other things, for example buy going to the movies more often. This expands the entertainment industry, which is largely american. So now we have the same amounts of jobs in the US, but many more jobs in China. This makes China richer, so Chinese people are now buying more goods from other countries, including the US. Although mostly they buy from Europe. Which makes Europe richer. So we buy more things from the US. In the end of this circle, all countries are richer than before. Because of competition.

So the losers are the corporations who go bust. It is then worth reminding ourselves who the open society is supposed to benefit. The open society is not supposed to benefit politicians or corporations. It is supposed to benefit the people. This is often forgotten. A good example of this is the so called browser-wars. Netscape Navigator was the biggest browser around until Microsoft came with their own browser, Internet Explorer. I remember this, and I also remember switching to Internet Explorer very quickly. It was simply much better than Navigator. It was also free. And the last blow to Netscape came when Microsoft started shipping Internet Explorer included with Windows. Many see this as unethical behaviour from Microsoft, as unfair competition. And of course it was bad for the company Netscape. But for everyone else it was good, because we got a browser that was not only better, we didn’t have to pay for it. Microsofts competition was bad for the company Netscape, but good for the people.

There were many other browsers out there too, like Opera, that was better than Internet Explorer, but you had to pay for. Nobody was very interested. The competition wasn’t good enough. And what happened without good competition? Well, Microsoft stopped improving Internet Explorer. It stayed on version 6 for years. Not until Firefox came around and we got a browser that was better, but also free, and open source to boot, did Microsoft wake up. Because they saw that their share was shrinking, rapidly, and they had to improve Explorer to make it better. This is a classic example of how improvement and invention stops if you don’t have enough competition. It also shows that in an open society, when that stop happens, this opens up for others to compete again.

Today, and this is what ultimately made me write these posts, Google announced a new browser, Chrome. It has a lot of improvements compared to Firefox, and even more compared to Internet Explorer. It also has a big name behind it, Google. It will be competition for both Internet Explorer and Firefox. But what ultimately will happen depends on how good it is. Will it be better than Firefox? Will Firefox be able to keep up? Will people who trust Microsoft, but doesn’t trust Firefox trust Google? We don’t know what will happen in the end, which of these browsers that will prevail. Some have expressed concern that this will spell doom for Firefox. That is possible, but that will only happen if Chrome is a much better browser.So yet again, competition turns out to be good.

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Competition is good for us, part 1

Something that can be hard to accept with an open society is that it always contains competition. This comes as a direct result of the openness. Since everybody can thread the path forward that they deem best, instead of being forced from the top by people who have little clue, this inevitably means that several groups of people will work on the same thing separately, at the same time. This lack of cooperation might start because they don’t know of each other, or because they don’t like each other, or because one group things it can do it better than the other. Sometimes groups merge, sometimes they split.

But the end effect of this is that the groups end up competing. Sometimes it’s for fun, sometimes for glory and quite often it’s for money. After all, we need to produce to survive. This competition is often seen as something bad. First of all it can seem wasteful that two groups are working on doing the same thing. Wouldn’t it be more efficient if they cooperated? It sure seems so. Secondly quite often something happens that make one group actually win the competition. In friendly competitions this seems OK, but when you compete for money, it often means some people will lose their incomes. And that is definitely not good.

So shouldn’t we try to avoid competition, at least about money? The answer is no.

When two groups compete, they never do exactly the same thing. There is always a difference. Which one is best? Well, that decision is then with the people who use it. We get to choose from various options, and decide which one is best for us. We choose for ourselves without necessarily forcing that decision on others. It’s the sort of ultimate democracy that the open society is full of.

This ability to choose is beneficial for society in various ways. In the most basic and boring way, it’s good economically. Because one of the most common ways that the produce differs is in price. So when products are similar, we tend to go for the cheapest one. This lowers prices, and lower prices makes people richer, because they get money over to buy other things.

But it’s not just the price that is important, but also quality. Do we want cheap and cheerful or expensive and exquisite? Well, often we want both, but at different times. If you are a bit hungry you might snatch up a chocolate bar and gobble it down, but when you have a nice relaxing evening with your significant other you might prefer a box of luscious expensive chocolates. And when we want cheap, we want as cheap as possible. So when buying gas for the car, we go for price. And when we go for quality, we want the best we can afford. None of these choices are available unless we have many producers competing with different products at different prices and different qualities. If we don’t have competition, you have to choose the single producer there is, no matter what the quality and price is. And that provides very little need for the producer to make something that is cheap or good, and we tend to end up with expensive and bad.

But competition is not only good for price and quality, which is what most people tend to focus on. We often forget something important when it comes to competition, and that is that it generates diversity. This can be a bit surprising. After all, if you look around todays highly competitive western world, you today mostly see McDonald’s and Starbuck’s, Hollywood blockbusters and books about wizards and witches. It might not look very diverse at first glance. But if you look a bit closer, you’ll between the big chains see loads of small restaurants run by people who love food. And these comes in all sizes, shapes and forms. There is Indian, Chinese, Lebanese, Thai, Vietnamese, Australian, South African, Kosher, Halal, Vegetarian, and even Swedish restaurants to go to. You can go for pizzas in small mostly take-away shops with plastic seats, or you can go to expensive ecological Italian gourmet pizzas in cozy atmospheres and subdues lighting. And although kids books (and movies) about magic is highly popular now, everyone wants on on the Harry Potter train, there is such an amazing abundance of fantastic and weird literature out there that it’s completely mind boggling. This vacation, the last five weeks, I’ve read thought-provoking science-fiction, and entertaining science fiction, some useless book about politics (complete crap, don’t read it), and a highly interesting book about politics. I’ve read a shallow but funny book about gods, and a deep and funny book about gods. I’ve read a thin and quick read about how people works, and am now currently reading a very heavy and slow read about how science works, and one or two more books. Notice how you probably haven’t read most of those books, in fact you probably haven’t even heard of them. Even though they all except three are well known enough to have their own Wikipedia pages. Competition creates diversity, and the result is that there today is more books out there that are important enough that you should read them, then is likely that you ever going to have time to read. Not all of the books above are blockbusters that made their authors rich, but some of them are.

In short: Competition is good. But, you say, what about those getting out-competed? The people loosing their jobs. I’ll tak about that in part 2. This post is already way too long. Sorry about the blabbering.

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The benefits of openness, a modern example

In the last post I talked about how the information exchange that trade and the printing press allowed started off the modern society. But this revolution is not the only information revolution in history. In fact, the first one probably was the inventing of writing. It wasn’t as big or sudden as the invention of the printing press, and neither was a third revolution that came with the inventions of the telegraph, telephone, and radio.

But the fourth one is as big as the printing press. In fact, it might be bigger, and it’s happening now. It’s called the internet.

The internet started out improving information exchange by making information more readily available. In a radio you only have the information when it’s being transmitted, but the benefit of the radio is that it can transmit information fast. The information of books is available any time, but you’ll have to go to the library. The internet is like having a gigantic library in your home, and it spreads information just as fast as radio.

The easy accessibility to information also means it’s very hard to censor information. This is of course the reason that totalitarian countries try to restrict internet access, or in extreme cases forbid people to own computers outright. But even in countries like China that filters internet content for it’s citizens, everybody with computers now have access to information about democracy and human rights. And this means that slowly, slowly, the government has to ease up on the oppression.

If it had stopped there, it would only have been a minor revolution, but it didn’t. Because the internet also means easy information sharing. Wikipedia is now the worlds largest collection of information. The reliability of the information varies, but it’s a great starting point almost for anything you want to know. The biggest and best encyclopedia ever. And, it’s made by having an enourmous amount of people all contributing a little bit.

Wikipedia is surely the best example of an open society in function you could have. Big enough to warrant it’s own article in the future.

And while Wikipedia concentrates on encyclopedia and facts, the blogging revolution has made sharing opinions and news available to everyone. Blogs started shaking the world when some American news was broken by bloggers a couple of years ago. This year, the Swedish political landscape was changed when a massive protest against a new law swept the Swedish blogosphere, while the traditional media was ignoring the issue.

Internet is not only giving people access to more information, faster, but are letting people share information, and collaborate on a scale never before imagined.

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Interesting conference: Mission Future

Via Clarification I found out about a very interesting conference in September. It’s called Mission Future and is about open source and future economy and other things related to open societies.

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The benefits of openess, an historical example

It may be easier to explain why we need an open society so badly if we look at some examples of how societies have opened up and what has happened as a result of this. And as a starting point we’ll go back to what is often called the Dark Ages; the early medieval Europe.

Many historians are fond of claiming that the Dark Ages wasn’t dark at all, pointing at the wonderful paintings and illuminated manuscripts, and the amazing Gothic architecture, and also pointing out that peoples lives weren’t much worse than before or after, really. This is of course true, but when you read something like history of philosophy, you see that intellectually this time was, if not dark, so at least rather murky. Sure, there were some important development in theology, but mostly nothing much useful happened intellectually. No great discoveries of science, and most philosophers spent their time mostly trying to come up with arguments for why God existed and why you should do what the church told you to. Notable exception like Roger Bacon and William of Ockham of course exists, but they are just a few during a period stretching almost a thousand years from which we have many philosophical writings preserved. Compare that to the few preserved writings of Greek philosophers during the thousand years before that, and the number of philosophers and important concepts that appeared there. No, the dark ages was truly dark from an intellectual standpoint.

And why was this? Well, it becomes apparent when we look at the decline of darkness that started around 1300. It started in the city states of Italy. States which had at this time more freedom than most places in the world, and also was trade centres, and therefore had contact with many parts of the world. The result was that you in places like Florence came into contact with more ideas than you would anywhere else, and you also had the freedom to share these ideas. The result was the Renaissance, a renewed interest in the classical literature and philosophy, this time regained via contact with Muslim cultures, who had not had any Dark Age, and instead produced a string of philosophers called Al. It quickly becomes obvious that the cause of the Dark Ages was the monopoly of intellectualism that the church had during these times.

The Renaissance didn’t get really up to speed until a bit later, though, when printing in it’s modern form was invented, mostly by Johannes Gutenberg. This now meant that the ideas you had or received from other places now could be spread ever more widely. In the beginning the church loved the printing press, because one problem up to now was that each Bible, being hand-made, was different. Sure, there was a sort of standard approved version, but it was hard to enforce this standard when all people did was copy each others non-standard Bibles. The printing press would change that, thought the church, by letting them print proper Bibles centrally and distribute them to the churches. They were right, of course, but what they didn’t see that printing would make books so cheap that almost anybody that was anybody could afford them. This lead to an explosion of information distribution, and soon everybody could compare different ideas for themselves, and the great ideas battled the not so great in a head to head fisticuffs. And of course, slowly great ideas prevailed and the church finally had to admit that OK, the earth was not the centre of the universe and actually, whatever you do you can’t prove that God exists.

Rationalism and science had prevailed in a way it never could have done without the open information exchange the renaissance and the printing press made possible. Society opened up during the renaissance, and as a result we got science, the industrial revolution and the modern world.

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Open source and the third world

It is ironic that those who best could benefit from open source tend to shun it. The third world has little money for software, but plenty of labor and manpower to improve and develop software. This means that the model of open source, where you pay forward by helping improving the software or the documentation or help support it, is ideal for the third world.

Yet open source is seen with suspicions in the third world. Microsoft software rules Africa’s IT-sector, to great cost. Many countries refused to be a part of the ground breaking OLPC project unless you could run Windows on the machines, thereby completely defeating a lot of the benefit of the project. (Read about the amazing impact the OLPC had in a small village in Peru). Of course, piracy is widespread in poorer countries so they don’t actually spend that much money on the software, but that also means that there is no support available when needed. You can’t call Microsoft’s hot lines when you neither can afford the software nor the call charges. So they can neither use manpower to improve the software and adapt it to their needs, nor get help when they need it.

The unwillingness to use open source in the third world seems to originate in a deep seated fear of sharing information. Of course, knowledge is power. This is true everywhere, and no more so than where the monetary forms of power are less readily available. But what is also true is that sharing knowledge does not diminish the power. This is somewhat counter-intuitive. You would think that the more people having the same knowledge as you do, the less your power would be, but that is not the case. Yes, giving information will increase the power of others. But you still have the same information and the same power. And by sharing information to others, they will also be more likely to share information to you. Together we can therefore raise our knowledge and our power to unheard of heights, if we just share information and our knowledge. And the more people share, the more power we will get, and the greater the opportunities in front of us.

The poorer countries in the world could easily propel themselves to the forefront of information technology in ten years, if they adopted open source and a culture of information sharing. But changing attitudes is often difficult and will probably take much longer than the ten years needed once the attitudes have changed.

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Open source: Free as in beer!

The word free in English means both free as is free speech, and free as in free beer. The confusion between the meanings of the word is one reason that talking about open source has become more popular lately than the closely related concept of Free Software. It’s often repeated that Free Software is free as in speech, not free as in beer. But on fact, it’s often free as in beer as well.

If you go out with your friends to a pub, and drink the free beer they buy for you all evening, without ever buying rounds back, and you’ll see that sooner or later they’ll stop calling you for the Fridays pub round. Free beer is free only for leeches. For friends it is free in times of need, but you need then to buy beer for your friend in times of their need. Open source works like this. You can download the free software and use it, but it is assumed that you somehow will help out. Even if you can not help develop the software, you can help write documentation, of help others out when they have problems, or at the very least, help spread the word about the wonderful software.

Open source software is a communal effort. The users are the ones who stand behind the software, creating it, document it and tell people about it. Open source communities are a limited example of open societies, working today.

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