Dean Baker on Open Source Software Development Funding

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By economist Dean Baker [1]:



“President Obama could not find any economists who were able to see the housing bubble for his economic team. Fortunately, he indicated that he would be willing to listen to those of us who did in designing his stimulus package.

In response to his request for ideas on how to make his economic recovery package more effective, I have put together the following list of seven proposals.”

Publicly Funded Clinical Trials

“Start a system of publicly funded clinical trials. The point would be to take the conduct of trials out of the control of the drug industry so that doctors and researchers would have immediate and full access to all research findings.

As a quid pro quo for paying for the trials, the government would get control of the licensing of the patent. The drugs developed through this system would all be sold as generics costing somewhere near $4 apiece at Wal-Mart. The payback from this would be enormous, instead of spending $330 billion a year on prescription drugs in 2012, we might spend closer to $30 billion. We’ll be paying $30 billion a year or so for clinical trials, and maybe close to that much in licensing fees, and getting much better medicine.

And, as a side benefit, people in developing countries would get cheap drugs too. We could put an end to “free-trade” agreements that try to jack up drug prices in poor countries through stronger patent protections. Total cost: $30 billion a year.”

Funding for Writers/Artists/Creative Workers

“In the New Deal there was both a federal arts project and a federal writers project. These programs employed thousands of young artists and writers. A creative stimulus package can extend this idea for the Internet Age. Suppose that President Obama made $10 billion a year available for state and local governments to support various types of creative and artistic work. This could include music, movies, writing books, even journalism. The one condition for support is that all material be made freely available in the public domain. (Better yet, it could have copyleft protection.)

This funding would be sufficient to employ 200,000 people a year at an average of $50,000 each. This would put an enormous amount of creative work in the public domain that people all over the world could download at zero cost. In the first year or two, we could have this program administered through public agencies, but in later years we can have people choose for themselves which work they want to support through a tax credit. The cost would be approximately $10 billion a year.”

Funding for the Development of Open Software

“In the same vein, the government can spend $2 billion a year to develop open source software. This money can be used to further develop and simplify open source operating systems such as Linux, as well other forms of free software. The payoffs from this spending would be enormous. Imagine that every computer buyer in the world would be able to get a computer for which the operating system was free, as was almost all the software that they would ever use.

This would surely save consumers an average of at least $200 per computer. With sales at close to 20 million a year, the savings in the United States alone could easily exceed the cost of supporting software development. Adding in the benefits (and presumably some contributions) from the rest of the world, we will be way ahead by going the route of publicly funded open software open software. The cost would be $2 billion a year.” (

More Information

  1. Obama Policy Watch