Would it be possible for a community of small groups and/or a plethora of individuals within an open source economy to decisively outcompete the dominant global system? I’m pretty sure the answer to that question is an unqualified yes. An open source economy, a place where ideas are free from ownership, would gain a decisive competitive advantage over a traditional economy very quickly.

In my three laws of asymmetric competition, a standard slide in my presentation, I claim that the open source business model outflanks pure for-profit plays for a number of reasons.

John Robb applies the same idea to the whole economy, and explains why the new system of open source economies necessarily outcooperates its rivals:

Open source economies would have a rate of innovation far in excess of traditional economies due to the speed at which innovation percolates through the system. With each successive cycle, innovation upon innovation, the process accelerates until dominance is achieved.

Let’s use an extreme and idealized example of a near term future to demonstrate the point. There are one million people in the open source economy. Each person has a desktop manufacturing device and a high speed connection to everyone else in the community. A couple people develop an idea , or more specifically a design, for a simple set of devices (circuit boards + housing + wireless comms) that intelligently manages a home’s electricity usage for a savings of 25%. In the open source economy, that idea is freely shared. It is then copied, in a growing cascade, by nearly everyone that can use it. They all print the device and deploy it into their home. Within weeks/months of the idea’s release nearly all 1 million homes of the economy’s network are saving 25% off of their electricity bill for only the cost of the smattering of materials required to build it. Within a month or two of that initial release, another innovation on the innovation arrives, that shaves 35% off of the cost of the electricity. The wave continues, on and on. Each step results in full societal benefit, since the full savings for each member that installs it can be applied to other activities (all boats rise).”