At the Open Source Business Conference in San Francisco this week, technology entrepreneurs gathered to discuss "open source capitalism." This conference theme demonstrates how the Open Source (OS) community is beginning to replace its corporate-hating mindset with a profit-loving meme, aiming to create jobs and value.

Open Source Software (OSS) products are usually free of charge and created and altered by many different individuals. The Firefox browser, which can be used instead of Microsoft's (Nasdaq: MSFT) Internet Explorer, is an example of an open-source product.

But while OS is open and available for all to see, there's money to be made through service and support packages, as well as through some OS licenses that allow complimentary propriety products to be created and sold.

Profit Motive

With well-established firms like Sun Microsystems (Nasdaq: SUNW) Microsoft, Novell (Nasdaq: NOVL) , Oracle (Nasdaq: ORCL) Intel (Nasdaq: INTC), and Dell (Nasdaq: DELL) sponsoring the event, it was perhaps not surprising that the number of suited participants equaled or outnumbered those sporting jeans and tattoos.

A movement that began with computer programmer Richard Stallman's ideology of socialized software is growing up and taking the competitive -- and profit enhancing -- advantages of OS seriously. Indeed, even Microsoft, long resistant to the idea of open source, dispatched a representative to outline the lessons that can be drawn from OS software.

Jason Matusow, Director of Microsoft's Shared Source initiatives, said that key benefits of OS are increased community involvement and trust. According to Matusow, most product groups at Microsoft now have the opportunity to decide if the code they produce will be open-source or proprietary, with the core bit often being proprietary and the rest of it open-source. But even while the profit motive burns through the OS community, there are still some that cling to notions associated with OS-thought version 1.0.

Control Issues

SpikeSource CEO Kim Polese argued that one of the great things about OS is that no one owns it -- a throwback to Stallman's free software message. But as the movement has matured, it's become clearer that even if there is no property title to a piece of code, there are still rules that control its use, and ultimately ownership is about control. In a debate sponsored by the Federalist Society in Silicon Valley last week, Washington University law professor Scott Kieff made this point well.

Keiff argued that OS property actually does exist in the form of things like fame, which are more inflexible and less transferable than regular property, making everyone worse off. His example was Linus Torvalds and his gang, which he compared to crony capitalists -- those who get to make key decisions because they hang with the right social group.

Stanford law professor Larry Lessig, who debated Keiff and also spoke at the Open Source Business Conference, expressed worry about property rights going too far and said that he believes the OS community needs to fight on a political level to stay healthy. "To the extent that you succeed, other people fail," he warned the audience. But software development isn't a zero-sum game, and bringing Congress into the mix is a dangerous idea that most developers instinctively resist.

Political Haze

The open source community is evolving in a positive way, and the best thing governments can do is relax and let the marketplace shape the future. When governments try to guess what path is best for technology development, they usually botch the job. That's because politics invariably gets in the way of clear thinking. Take, for example, the move by some governments to mandate the use of open-source software instead of proprietary systems in government offices.

Bureaucracies certainly have the choice of what type of software products to use. But when the decision is based on politics rather than the actual requirements of a particular government agency, efficiency and cost questions are certain to follow.

The Open Source Business Conference was a fascinating two-day event, bringing capitalists into a realm once dominated by socialist thinking. The call for government intervention in such a dynamic marketplace is misguided and should be ignored. Innovation and economic growth must be allowed to flourish.