Truck and Barter: A Little Piracy Goes a Long Way

July 07, 2004

A Little Piracy Goes a Long Way

By Ian

As I've mentioned before, the developing world might be a perfect place for open-source software to get a foothold. While the benefits of open-source products are numerous, the only one that really matters in the very short-term view of most places that are barely able to scrape together the money for one or two computers is the price. And, in the developed world, price has been one of the things open-source software has been able to compete on.

But what happens when the advantage is taken away? It turns out that, in Iraq at least, a good name will get you pretty far.

Reports from inside [Iraq] say curious citizens are keeping Internet cafes filled to capacity, that eager students are returning to universities to learn how to program and that high-end computer workstations can be bought for as little as $150 in city marketplaces.
But even with all the growth, there is still one aspect of technology that has yet to penetrate the country's borders: open-source software. With software piracy so rampant that a CD copy of almost any program can be bought for just 2,000 dinars, or $1, the demand for free software just isn't there yet, according to Ashraf Tariq and Hasanen Nawfal.

{...}

"Most of them just heard about Linux but are afraid of trying it. For home users things are worse -- for them, a computer equals Windows, and vice versa."

Just how hard do you think Microsoft will push to fight piracy in this case? "Path dependence" as an economic argument for resulting equilibria situationas is often a sort of last resort argument, an admission that for whatever reason, "things happened in such a way as to get us here, and now too many people cosider it too costly to shift to something different." One of the problems with it is that the starting point down a certain road is often hard to identify. Seems to me, though, that we might be able to pick this out as the starting point for the growth of Microsoft in Iraq.

Add to the argument certain biases in trade policy:

Though the United States has eased several restrictions governing the export of goods and technologies to Iraq over the past year, "publicly available" software, like Linux, remains caught in limbo because it implements certain security standards -- namely, strong encryption.
Linux developers say strong encryption is necessary to protect the security of businesses and Internet users. American policy makers believe it's a tool that terrorists may use to hide their communications from law enforcement officials. In light of the current war on terrorism, the latter argument has so far prevailed -- meaning anyone wishing to send a copy of Linux to Iraq must first obtain permission from the Department of Commerce.

Meanwhile, the Department of Commerce has classified Microsoft Windows and Sun Solaris as "mass-market encryption products," meaning that the vendors can ship them to Iraq without a license, according to Don Marti, president of the Silicon Valley Linux User Group and editor of the Linux Journal.

Simply because there are more Windows products available now, it's easier to sell them elsewhere. Economies of scale at its finest. The distinction, you'll no doubt have noticed, is rediculous. "Mass-market" is being defined here by volume rather than by sales outlet. Windows is "mass-market" because it is available more places, whereas Linux -- though sold through the same stores -- is not because of limited availability.

For reference, here is the relevant section of the Code of Federal Regulations for dealing with encrypted/encryption products.

Get the country hooked now, and they'll be more likely to come begging for more later. (You know, the similarities between software and illegal drug industries are so close, I don't understand why someone doesn't attempt to use insight from the latter to help explain the patterns of the former. Why do people shell out such high prices for such bad software? Why do they keep going back to the same provider when they can be hurt so badly by viruses? )

Posted at July 7, 2004 10:31 AM

Comments

As per my recent link, there is a Linux users group in Baghdad, and they are distributing Mandrake CDs.

Comment by triticale at July 7, 2004 06:00 PM | Permalink

Thanks for the pointer. The article I cited mentiones the LUG, though it seems that the group is populated overwhelmingly by non-Iraqis with good intentions. Of course, as with most path-dependent arguments, the longer MS is allowed to dominate, the more costly it will eventually be to attempt to change, or for an individual to not go along. Now's the time, I suppose.

Comment by Ian at July 7, 2004 08:08 PM | Permalink