I said that intellectual-property-respecting societies can have both "free" software and proprietary software, while those that don't respect intellectual property can only use the free (or "trade secret"/Omerta) model.
In a society employing both mechanisms, the free/open model must compete against the closed/proprietary model. The latter has better prospects of reward, so it seems probable that this results in much less free/open software being produced than would otherwise be the case, since capital is diverted to the pursuit which has the strongest reward possibilities.
They (the IP-non-respecting society) would certainly come up with a Microsoft Word-equivalent, but do so later and with less refinement on difficult features. As time has value, the later arrival of word processing software comes at a cost.
The question that follows is whether the cost of not being able to use the software without paying for it (and other costs such as the security holes and asymmetry of information caused by lack of access to source code) outweighs the cost of having to wait longer for the end-user-optimal tool to be produced.
Personally I am more concerned about the entrenchment of bad (e.g. restrictively licensed or poorly designed) technology than slowness of the addition of new features.
The basic problem is that the fact that something is proprietary and closed source means that its net value to the society is lower (due to providing a route to entrenchment of bad technology, restrictions on redistribution, etc.), despite the individual value to the customer (the end-user experience, available features, etc.) being approximately the same or better.
No, it doesn't, for much the same reason that exclusively-communal production methods are suboptimal: non-monetary mechanisms can motivate some kinds of production but not others, while "private property" societies still provide a meta-context in which communal production models can be used.
Exclusive use of free software does not entirely exclude the use of monetary incentives; as I have said, one can donate money to the creation of free software. You may be confused by the use of the term "free" which in english can refer to lack of restrictions or lack of monetary compensation. Software that is not protected by IP laws/norms can still trigger compensation, provided enough recipients are willing to cooperate.
Also note that providing support and customized upgrades for software is a successful business model for many companies who otherwise do not restrict the redistribution of their software.
I could discuss the large scale effects of piracy (copyright infringement) for days! From a game-theoretical/utilitarian -, ethical - or any other perspective. I have a set of views and suggestions for topics that could be interesting to break down and address, but instead of writing a long post addressing many different topics, Ill start with the first one in my mind.
Just a thought:
For a subset of activities you could map the question of the ethical status of illegal downloading of a software p (preferred choice) to the existence of a certain kind of element a in a set S, which I'll call the set of alternatives (assuming the risk of getting caught is very small).
Lets say that you for some reason need a graphics editor and your preferred choice is Photoshop CS5. You could either:
In the case you have chosen to illegally download a copy of the software, some people would compare that to stealing (certainly the folks at Adobe). Would that really be fair to say? At least in my opinion that depends on whether or not you would have bought a copy in the absence of the 'download' alternative. Your preferred choice is indeed Photoshop CS5, but that is one among many choices, the rest being in the set of alternatives S. Most users with illegal copies wouldn't pay the 650$ when there are free alternatives. Those alternatives may be much less attractive with less features but many of them would still do the job.
So if there exist an a in S, such that you would prefer a over p in the absence of alternative 2, then in a game between you and Adobe, the choice a would not be Pareto optimal. Your utility is maximized by choosing p (downloading Photoshop), Adobes utility left unchanged. --> Maximizing total utility (ignoring potential side-effects, such as effects overall attitude towards piracy and so on)
Today there exists an S for almost anything.
Whats your opinion on this in regards to utility maximization (utility of society). Can we really break it down like this looking at the individual case?