I'll paste this same text into your Google Doc...

I don't know what your technical level is so I'll aim for college-educated with a broad understanding of technology. Apologies if I come off as condescending; I don't know what you know.

Feel free to use this in your paper. You can also snip out profanity of course (or leave it in for flavor; that's up to you).

Email: michael.o.church at gmail

[Start here]

In my opinion, the economic problem of the 21st-century is convexity. Go here for further reading: http://michaelochurch.wordpress.com/2013/04/03/gervais-macle... . I have a whole slew of posts on economic topics that I've put together over the past 2 months. The effect of convexity is a movement from low-risk commodity work to risk-intrinsic work (i.e. its value is purely in its natural uncertainty, and not discomfort as with commodity labor) that is more fun and creative, but harder to make a living from. The overarching theme of economics from 1975 to now has been the offloading of commodity work to machines, who can do it more reliably. The hard and somewhat creative stuff, like programming these machines, is what's left for humans. (Actually, there's a lot of concave grunt work in coding; the goal is to have it done by programs called compilers that, again, can do that concave/boring stuff way better than we.) So the only thing left for humans is the risk-intrinsic convex stuff. I've been studying Convexity for years and it is a big f_king social problem. Convex work has high expectancy but lots of risk and it can't put forward the mediocre, regular income that average people are used to (and could not stand to be without).

Software is the leading edge of convex economics. It's the first battlefield between the old industrial regime (everyone gets a mediocre wage for mediocre work) and Convexity. With convexity, you have a long learning period before your earning period (in which, ideally, you keep learning). During that (poorly paid or unpaid, often) learning period, you build a lot of cool stuff. Eventually, you get to a level of expertise and product-quality that people will pay for it; but it's impossible to know (until you engage directly with the market) how close you are to that point. So you end up building lots of still-quite-cool (if not professional-grade) stuff in which there's no harm in giving it away for free. As programmers, we don't really fear people "stealing our ideas"; ideas are cheap and easy; code is hard. That's part of why we pretty much unanimously hate software patents.

Convexity creates risk for workers (because it makes full employment uncommon if not untenable) but also for institutions that need to hire people. Talent discovery is a massive problem. (I'm writing on that right now.) Companies have to pay about $10,000 to hire a 1.2-level (scale here: http://michaelochurch.wordpress.com/2012/01/26/the-trajector... ) programmer (interview time/opportunity cost) and about $40,000 to hire a 1.5 (add recruiting fees, hiring bonuses, perks and more interviewing). How much does it cost to hire a 2.2+? (Sometimes you need that level of talent.) Almost a million (mostly in R&D budgets to build an autonomy culture.) The only places where 2.2+ programmers want to work are companies with extremely high levels of autonomy where they can do 2.3+ level R&D work; no managerial meddling, full autonomy over time, plenty of resources. (The 2.2+ "repay" that $500-700k by doing excellent work, of course.) The reason Valve has an open allocation culture and Google used to have one (before ~2009) is that, even if it's "expensive" to hire engineers and have them doing R&D with full autonomy, that's what you have to do if you want to hire the (rare and picky) 2.2+.

So talent discovery is a hard problem, and there's a bilateral matching problem wherein companies find it really hard to hire the people they want, and even good engineers have significant job latency. The bilateral matching problem only gets worse as you move up the skill curve. (I'm a 1.8 and have had 3-month job searches; then again, I'm really picky.)

The old way for undiscovered (usu. young) talent to gate-crash this discovery problem was to pay 50 thousand goddamn dollars per year to some institution already sitting on billions, for 4 years, and then get discovered by another billionaire corporation, climb its organizational ladder doing low-paid boring work, and eventually show (around age 35) that you're ready to do real work (after 10+ mind-numbing years of order-taking that killed your creativity). Well, that's just too inefficient to hold water (get it? convexity, holding water? bad joke. anyway...) anymore.

Traditionally, convex labor with extreme talent-discovery problems (such as Hollywood acting and scientific research, where the natural talent us rare) fell to gatekeepers (literary agents, Ivy League admissions officers, graduate departments, athletic recruiters) who were imperfect and sometimes corrupt, but did the job. The problem with software is that no one is qualified to serve this "middleman" role because only an equal or superior engineer can judge another software engineer's work. So, it's not just that it's desirable to get around these middling agents; it's that the only people who can really do the job are software engineers, who'd rather write code.

So the new way to fix the talent-discovery problem seems to be to create this giant, amazing gift economy that we call "open source" (and blogging, print-and-play games, also are part of this). You participate because (a) it's more fun to build cool stuff and give it away than to spend 75+ percent of your time selling and <25 creating, and (b) it's a great way to overcome the talent-discovery problem.

So that's why we give cool stuff away for free.