« Optimal size of firms | Main | Beware the poisoned link »

Free, as in beer - the marginal cost of software

I don't think Economists think enough about software. I have never seen a professional economist discuss microeconomics of software production. Many businessmen fail to understand the nature of software, assuming that it can be produced in the same way that production line workers produce refrigerators, or building contractors produce tower blocks, or, possibly film producers produce films.

Two blog entries discuss the marginal cost of production of software (an new line of code?) here, and here, the second by the excellent geek Ben Laurie, the first reached through reading the comments on Ben's post.

I am not 100% sure I agree with each (which particularly look at the Open Source movement, rather than software development in general), but they are certainly not far from the correct analysis. As Baudel states, rather eloquently: "Software distinguishes itself from other works of the mind, such as music, in that its originality is by no means a part of its value or utility.".

What is certain is that to create software is to respond to a noble calling.

TrackBack

TrackBack URL for this entry:
http://www.stevehemingway.com/cgi-sys/cgiwrap/hemings/managed-mt/mt-tb.cgi/128

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

   

About

This page contains a single entry from the blog posted on February 4, 2008 7:29 PM.

The previous post in this blog was Optimal size of firms.

The next post in this blog is Beware the poisoned link.

Many more can be found on the main index page or by looking through the archives.

Creative Commons License
This weblog is licensed under a Creative Commons License.
China Sourcing
Powered by
Movable Type Pro 4.21-en Bookmark and Share