Exporting Jobs

A few days ago I received an e-mail from the Libertarian party (I usually monitor their e-mail) which blamed the problem on governmental regulation rather than business missmanagement. That is, why didn't businesses export the jobs ten years ago, the wage differential was more then than now. The reason is, they say, is governmental regulation.

I cannot speak to a lot of the jobs, particularly manufacturing and blue collar jobs. However, I have been working with computers since 1968, and can speak somewhat about the lose of software jobs.

A quick review of history. Electronic computers were invented in 1938 at Iowa State University. This was copied by a prof at the University of Pennsylvania, and a lot of people (including the History Channel) mistakenly think the computer was invented there.

These computers had no software. That is, they were rewired for every program. In about 1948 Johnny von Neumann from MIT, I believe, invented the concepts that made software possible, and the word was invented cirra 1955. Since the concept had not existed before then there were no laws governing software, software was freely copied.

In the late 1970's, the Federal Government decided software needed some sort of regulation, so they extended the copyright law to apply to software. This made possible the creation of a software monopoly - Microsoft. That is, if people could freely copy Windows, then Microsoft could not exist.

Microsoft really inherited a monopoly. That is, IBM had a virtual monopoly on hardware, and were being prosecuted for that monopoly during the 1970's. IBM did not realize that software would be that important because the free flow of software that had existed prior to the copyright law didn't tend to indicate that. Therefore, when Microsoft got the contract for PC-DOS, the IBM operating system for its entry into the microcomputer marketplace, IBM did not prevent Microsoft from simply relabeling the OS as MS-DOS and selling it.

In fact, PC-DOS was a virtual copy of an existing OS, CP/M. In the 1980's I was looking at the details of the MS-DOS operating system, and I could see the basic CP/M under it all. This became a business plan for Microsoft. That is, they would allow some programmer to develop a software concept, and prove that it would sell. At that point, Microsoft would copy the software and make it a part of the Operating system so the company would loose their market.

At that time (and even now) I was afraid to write and market new software because I knew if it succeeded, then it would be copied by Microsoft, and I would get none of the advantages of having written it.

This business plan continued until the middle 90's, when Bill Gates did not think the Internet would amount to anything, so he did not start to copy the Netscape browser until Netscape was big enough to be seen. Their business plan became known, and the Justice department stepped in to stop their illegal activities.

(I recall a company that did something to annoy Microsoft. They noted that if they went to court, Microsoft would put more lawyers on the case than they had employees. Such has been the reality of software for the last twenty years.)

Meanwhile, in other developments, a guy named Robert Stallmen was a software developer for MIT. He was upset when he tried to get information about a printer, and the company refused his request. The result he set up the "Free Software Foundation" which developed the GPL (General program license). This was a copyright which a program could use which would allow a software developer to use the copyright law to prevent people from using the results of their efforts to promote secrecy in software - that is, the results of the programming effort could be shared freely as it had been prior to 1978.

In 1991 a Finnish College student was dissatisfied with the Minix Operating system he was studying, and since he was used to programming in machine language, he decided to write a new operating system for fun. In Sept, 1991 he released this operating system using the GPL under the name Linux. It wasn't very good, but almost every programmer in the world was helping out.

(I recall his biography, where it was point out that he was communicating with people from as far away as Australia when his parents didn't know he was communicating with people from out of town. In fact, I think it was shortly after he released Linux that a group of programmers got together and decided to buy him a computer.)

In about 1994, Redhat software was formed to market Linux, even though the software they were marketing was free. There were several other companies that did this as well, and now there are many - Redhat, SuSE, Lindows, Dabian, and many others. At first Microsoft ignored this, as Windows was a lot more convenient for the average person. However, the basic infrastructure of Linux is much better than Windows. (For example, Linux is based on Minix, as I have said, which is based on Unix, which was based on Multics, which is based on an operating system (I have forgotten the name) developed at MIT which was the first system to have multi-tasking. Windows finally added multi-tasking in 1995, but Linux and its predecessors had it in 1960.)

Since multi-tasking is very important when many users are on a system, Linux and Unix have a big head start on Windows when being used as an Internet server, and, in fact, there are more Linux Internet servers than there are Windows servers. There are also a great many Unix servers. I have seen statements where Microsoft claimed to have a larger number of servers than any other commercial server. Probably true, as Linux is not a commercial system, and apache, which is the software that runs more than 50? of the WEB servers is free, therefore they reason is not commercial.

The problem is that Linux is improving in quality very much faster than Windows. As one source put it, there are many times more programmers developing software for Linux than Windows. Currently I suspect most people couldn't tell the difference between, say, Fedora Linux (which is free) and Windows. (Not true. Fedora comes with many times as much software as Windows.) Therefore, Microsoft sees Linux as a threat.

They cannot use their usual procedures, because Linux is not one company. They might be able to take out Redhat, but if they did, then everyone and his brother would start to distribute the same thing legally. That is, their usual attempts to kill the competition wouldn't work because it would be like shooting a swarm of bees. They might kill one or two, but the bees would still be coming.

In another development, DVD's came out. The movie companies, etc, developed software to display DVD's for Windows, but not for Linux. Therefore, a high school student reverse engineered the code, and wrote software to run DVD's on Linux. Microsoft considered that a threat because if Linux could play DVD's then people might buy Linux rather than Windows, Linux is currently more convenient than Windows.

Therefore, under the guise of protecting the movie industry, Microsoft managed to get the practice of reverse engineering declared illegal, so Linux could not have a legal DVD player (although there are players available on the Internet from outside the U.S.).

Not being satisfied with this, congress pushed through a law (probably financed by Microsoft) allowing patents to be applied from software. Before, with copyrights one could put up as a defense in a copyright suit that the work in question was not known to the writer. However, patents mean that any time a programmer writes code he is potentially violating someones patent, even ones he doesn't know about. Most other countries do not recognize these patents, (and I question their legality because they just make developing software dangerous, they do not advance any scientific or artistic purpose, as the constitution demands.)

Therefore we find ourselves in the current situation. If a company develops software in the United States, then it risks violating some unknown patent. Or violating some export restriction (I recall when the encryption software was developed for Linux. It was developed in Australia, but the United States put export restrictions on it. Therefore, the United States would not allow the export of a piece of software that was readily available from its writers in Australia.)

I suspect that these laws have a lot more to do with the export of software jobs to India than any differences in wages, or any miss-management by companies.

The situation with Microsoft has not improved either. When Bush became president, in his zeal to undo everything that Clinton did, he let Microsoft off the hook for its business practices in the past, only requiring them to run an advertising campaigne (quite similar to the one Apple ran in the early 80's). That is, Windows could give a computers to schools, and the justice department would drop the charges.

Therefore, they continued business as usual. This week (March 17^th 2004) they lost a case in a Europian court because they are attempting to put those companies which write media players out of business by bundling a media player with Windows. The European court told them they have to sell Windows without a media player.

Similarly, the Lindows company has found a way to sell a legal DVD player for Linux. Therefore, Microsoft has brought charges against the company. In every preliminary hearing, Microsoft has lost, and I wouldn't give them any chance of winning in a court of law. (This would strip the trademark designation that Microsoft has for Windows.) Microsoft see is the same way, so they have decided to sue the Lindows company in every other country on Earth. Lindow does not have the financial resources Microsoft has, so it is quite likely Microsoft will prevail, not by following the law, but by circumventing the law, in contempt of the law.

In another development, Microsoft has used SCO to attempt to make Linux illegal. That is, at one time SCO distributed both Unix as a proprietary OS, and Linux. In all probability, SCO copied code from Linux (which is open source) to Unix. Therefore, SCO decided to claim all of Linux, and is suing IBM, and threatening everyone with a $700 per year licensing fee for Linux. Most companies ignore this, as the likelihood that SCO will win a lawsuit is so very low. A few days ago I saw references to Microsoft as supplying the money for the lawsuit.

In summary, you can see that, while the loss of software jobs to India is regrettable, it is wrong to be so shortsighted as to blame the companies that are exporting those jobs. They are only responding to pressures put on them as a result of governmental regulations, primarily pushed by the attempt by Microsoft to make Linux illegal. I have been concerned for some time (several years) that the actions of the government were in the process of destroying the software development industry in the United States. The "exporting of software development jobs" is simply a realization of that prediction.