Writing Eula’s Name and Numbers
Classical economic theory, from Smith and Ricardo, holds that the amount of labor used to produce a commodity is the determinant of its price; neoclassical economists reject this, arguing rather that supply and demand — as constructed by preferences and productivity — are what determine prices. In the computer age, digital reproducibility in particular foregrounds the role preferences play in determining price. However, I think the phenomenon of open-source and freely distributed software — while certainly digitally reproducible — gives all economic models (classical, neo-classical, or Marxian) fits. In fact, I wonder whether economists would even call such software a part of the economy, or whether they would name it as an externality, or a product of a non-class process.
But that’s just the start, here. Let’s add another complicating factor, and talk about the place of depreciation on a balance sheet. We understand that the depreciation of a business asset — its loss in value over time — can be written off, in the U.S., as a tax loss. (This tax writeoff is what makes certain REIT mutual funds potentially solid investments.) When Darla the Wal-Mart greeter decides to start her own small Web design business on the side, the $1000 computer she buys will lose value (and not just due to Moore’s Law) over time, and she can deduct that loss from the taxes that her business pays. So one question I have would be, if Darla gets a big client and needs to invest in a $699 copy of LIFT NN/g Pro, will that software depreciate in the same way (for tax purposes) that her computer does? (Anybody with business experience have insights to offer here?)
I wrote recently about possible ways in which university administrators might view computers as capital, generating return on investment; a better way to put it for that model might be to call them “business assets.” However, Charlie reminded me yesterday that the state university, unlike a for-profit corporation, doesn’t pay taxes, and so computers can’t be written off as depreciation. So I need to keep in mind that, as much as American culture’s understanding of economics seems dominated by the neoclassical ideology, I need to be careful when trying to understand the university through such a lens: capital may do strange things in not-for-profit environments.
But see, I’ve also been looking at how writing circulates as a product in the classroom, and whether education itself can be understood as a product. These questions also become more difficult when coupled to the contexts of the university and open-source software.
Read more
Recent Comments