[Excerpt from The World Is Flat, Chapter 2, "The Ten Forces That Flattened the World", p. 96 ff.]

. . . If everyone contributes his or her intellectual capital for free, where will the resources for new innovation come from? And won't we end up in endless legal wrangles over which part of any innovation was made by the community for free, and meant to stay that way, and which part was added on by some company for profit and has to be paid for so that the company can make money to dive further innovation? These questions are all triggered by the other increasingly popular form of self-organized collaboration - the free software movement. . .

The free software movement, however, was and remains inspired by the ethical ideal that software should be free and available to all, and it relies on open-source collaboration to help produce the best software possible to be distributed for free. This is a bit different from the approach of the intellectual commons folks, like Apache. They saw open-sourcing as a technically superior means of creating software and other innovations, and while Apache was made available to all for free, it had no problem with commercial software being built on top of it. The Apache group allowed anyone who created a derivative work to own it himself, provided he acknowledge the Apache contribution.

The primary goal of the free software movement, however, is to get as many people as possible writing, improving, and distributing software for free, out of a conviction that this will empower everyone and free individuals from the grip of global corporations. Generally speaking the free software movement structures its licenses so that if your commercial software draws directly from their free software copyright, they want your software to be free too . . .

In 1991, a student at the University of Helsinki named Linus Torvalds . . . posted his Linux operating system to compete with the Microsoft Windows operating system and invited other engineers and geeks online to try to improve it - for free. Since Torvalds's initial post, programmers all over the world have manipulated, added to, expanded, patched, and improved the GNU/Linux operating system, whose license says anyone can download the source code and improve upon it but then must make the upgraded version freely available to everybody else. Torvalds insists that Linux must always be free. Companies that sell software improvements that enhance Linux or adapt it to certain functions have to be very careful not to touch its copyright in their commercial products . . .

The free software movement has become a serious challenge to Microsoft and some other big global software players . . .

It will come as no surprise that Microsoft officials are not believers in the viability or virtues of the free software form of open-source . . .

Microsoft's first point is, How do you push innovation forward if everyone is working for free and giving away their work? . . .

"Microsoft would admit that there are a number of aspects of the open-source movement that are intriguing, particularly around the scale, community collaboration, and communications aspects," said Craig Mundie, the Microsoft chief technology officer. "But we fundamentally believe in a commercial software industry, and some variants of the open-source model attack the economic model that allows companies to build businesses in software. The virtuous cycle of innovation, reward, reinvestment, and more innovation is what has driven all big breakthroughs in our industry. The software business as we have known it is a scale economic business. You spend a ton of money up front to develop a software product, and then the marginal cost of producing each one is very small, but if you sell a lot of them, you make back your investment and then plow profits back into developing the next generation. But when you insist that you cannot charge for software, you can only give it away, you take the software business away from being a scale economic business." . . .

My bottom line is this: Open-source is an important flattener because it makes available for free many tools, from software to encyclopedias, that millions of people around the world would have had to buy in order to use, and because open-source network associations - with their open borders and come-one-come-all approach - can challenge hierarchical structures with a horizontal model of innovation that is clearly working in a growing number of areas. Apache and Linux have each helped to drive down costs of computing and Internet usage in ways that are profoundly flattening. This movement is not going way. Indeed, it may just be getting started - with a huge, growing appetite that could apply to many industries. As The Economist mused (June 10, 2004), "some zealots even argue that the open-source approach represents a new, post-capitalist model of production."

That may prove true. But if it does, then we have some huge global governance issues to sort out over who owns what and how individuals and companies will profit from their creations.