Open Source and Spontaneous Order

28 December 2007 at 12:00 pm Peter G. Klein 3 comments

| Peter Klein |

Open-source software is often cited as an example of what Hayek termed spontaneous order, the organic, bottom-up, decentralized form of organization that characterizes the market system. Giampaolo Garzarelli, in an explicitly Hayekian analyis, says open-source projects are defined by “no hierarchy, self-organization, self-regulation, and no ownership structure.” Is this an accurate characterization?

Commercial law, manifest in the medieval law merchant or lex mercatoria, is another important example of spontaneous order in the literature (see Harold Berman and Bruce Benson). Fabrizio Marrella and Christopher Yoo use the law merchant as a benchmark, asking “Is Open Source Software the New Lex Mercatoria?”They think not, arguing that focal firms, individuals, and groups play a more important role in guiding the evolution of open-source projects than is usually recognized. As a result, “[o]pen source has not achieved the type of universality or uniformity of principles envisioned by proponents of the lex mercatoria.”

Marrella and Yoo pay particular attention to the role of licences and country-specific forms of dispute resolution.

Open source software is much more dependent on national law than are transactions governed by the lex mercatoria. Open source licenses typically make no provision for arbitration of disputes. As a result, enforcement of the copyright license and substantive copyright law is left to national courts and the choice of law rules embodied in national law. Furthermore, the substance of the copyright and patent law of individual nations exert considerable influence over open source software as well.

In short, the open-source system is not fully spontaneous, universal, or independent of national law. Neither, of course is the law merchant, though this hardly invalidates the concept of decentralized law more generally (1, 2). Marrella and Yoo conclude:

The fact that many Internet scholars [Larry Lessig appears to be the main target — PK] find the vision of the lex mercatoria enticing should also come as no surprise. Internet users have long shared a desire for uniform rules for global interoperability built on a foundation of decentralized, user-defined self-governance free from governmental interference. Upon closer inspection, debates about Internet self-governance run aground on many of the same issues that characterize the debate over the lex mercatoria. . . . As enticing as the image of a spontaneous, universal, and autonomous legal order may be, the reality is that most legal systems retain, at different speeds, a number of deep interdependencies with national law and its control mechanisms. Given the controversies that have long surrounded the original debates about the lex mercatoria, that attempts to extend the same concepts into Internet governance would run afoul of the same problems should come as no surprise.

Entry filed under: - Klein -, Austrian Economics, Evolutionary Economics, Institutions.

New Papers on the Economic Analysis of Religion New Videos: Roth, Tirole

3 Comments Add your own

1. nordsieck | 28 December 2007 at 2:38 pm

Open Source projects also involve a definite ownership pattern as well. While it is true that anyone can “fork” a project, it is impossible to steal the original project’s reputation for quality and reliability. In practice, then, ownership and hierarchy exist, organized by the ability to make changes to some or all of the software, contingent on varying degrees of oversight.
2. “Software” livre, o discurso bolivariano da esquerda brasileira e nós « De Gustibus Non Est Disputandum | 29 December 2007 at 4:30 am

[…] outro comentário é do Organization and Markets, e está aqui. Como se vê, há muito mais entre o céu e a terra do que supõem nossos estúpidos políticos e […]
3. Roberto Galoppini | 29 December 2007 at 9:51 am

I personally coauthored a paper with Giampaolo Garzarelli in 2003, and we extended our common research to modularity and hierarchy studying the Debian case. Here a short excerpt that might interest you:

[. . .] a pure modular structure — that is, one lacking hierarchy, such as a market — embeds flexibility in the form of a learning mechanism, but it lacks coherence, the ability to coevolve after adapting to change (cf., e.g., Langlois 1995). Indeed, the flexibility aspect of modularity is what pushes organizational coherence out of synchrony — what misaligns expectations in the Hayekian sense. Hence, when a modular organization presents coherence (and is healthy), hierarchy, we submit, is bundled to its modularity because of flexibility.