[Sussex] Re: Kylix and now PHP!

[Mark Harrison]

----- Original Message -----
From: "Steve Dobson" <SDobson at manh.com>
To: <sussex at mailman.lug.org.uk>
Sent: Friday, June 06, 2003 9:10 AM
Subject: RE: [Sussex] Re: Kylix and now PHP!
> The economies of scale that a super-sized businesses can make is
> only good for themselves and their shareholders.  For the society
> at large lots of small businesses is better.  They employ more
> people, pay more tax and generally contribute more back.  At least
> that what I've been told by an economist.

Can I make a subtle distinction...

AIUI, it's not that "lots of small businesses is better", but "lots of
_competing_ businesses is better".

Now, inevitably, if you have lots of businesses in a market space, then they
are going to be smaller than if that market space were a monopoly. However,
the logic is that competition drives innovation and efficiency (by rewarding
those who become more competitive and innovative), and thus is able to
expand the size of the market.

Example of market expansion - Sinclair Research in the early 1980s. Small
company, brought out a lightweight product (the ZX80) in a market where the
IBMs were not efficient enough to compete. I'd be willing to claim that the
ZX80 didn't take ANY market share from IBM, but did expand the market for
computers down into a new space.

However, balanced against this, you have the argument that "lots of small
businesses employing more people to do the same thing" is bad if it means
inefficiency. An example here might be the farming industry. While having
lots of smallholders with a couple of acres each producing food might be
good inasmuch as it employed more people, it wouldn't actually produce any
MORE food than small modern farms of 50-100 acres. When you have high
unemployment, you might see a benefit in more people working to produce the
same, but when you have low unemployment, you want these people OFF the
land, into areas where they can add something else to society.

While capitalism has its problems, it's hard to argue that it has proved a
very effective method of structuring society to promote efficiency and
innovation.

The next 50 years are going to be interesting however... we're seeing the
formation of communties where the medium of exchange is NOT money. Instead
it's knowledge. I refer, of course, to the OpenSource community. The
motivation to develop OpenSource is not usually financial. Instead it's that
by giving something to the community, you will get something in return -
software, peer support, assistance, etc. It's, at the moment, hard to tax
this... which will increasingly leave governments floundering as a higher
and higher proportion of "effort" (previously taxable) goes into OpenSource,
and you can't tax gifted time!

Regards,

Mark