Is Linux Bad for the Economy?

Linux's emphasis on cost savings and a skinny bottom line may be the opposite of what we need, as economic recovery won't start unless business get back to spend serious money.
When perusing my local dead tree Sunday newspaper's Business section, I came across the headline, Frugality pays off: Avoiding debt looks smart for area firms and thought, "Hey, this looks like something that my readers would enjoy." They've done exactly what I've said that companies should do: Be frugal during the good times and the lean times won't seem so lean. They also maintain their business by purchasing only what they can pay for. But who listens to such rubbish? Apparently, a few do and they seem to be in the minority-a solvent minority.

But, that evening, I read a Newsweek* article titled, Stop Saving Now!, a cover story that actually encourages you, the consumer, to stop being so darn frugal and spend some money. The writer prompts us to take risks again and let go of our death grip on those dollars. Is this what we should do to get this economy going? I pondered at great length over these two diametrically opposed viewpoints and came up with the following idea:

Use Linux for your business and buy an iPod for your kids.

The Newsweek writer, Daniel Gross, states in his article:

If everyone saves during a slack period, economic activity will decrease, thus making everyone poorer. We also need to start investing again-not necessarily in the stock of Citigroup or in condos in Miami. But rather to build skills, to create the new companies that are so vital to growth, and to fund the discovery and development of new technologies.

I agree.

Development of those new technologies on a commodity platform like Linux allows startup companies to enter the market with less capital and compete more effectively with their larger counterparts. In addition, using free open source applications and technologies encourages innovation and creation of new products for technology-hungry buyers. For smaller companies and startups, maintaining a high level of frugality is necessary for survival in any market environment.

Linux won't directly save individual consumers a bundle of cash, but they will find financial solace in Linux-based services whether they know the services are Linux-based or not. I'm speaking of cloud services, of which more than 90 percent run on Linux. And now that XenServer is free, cloud vendors have plenty of incentive to make their services economically palatable to even the most tight-fisted among you.

Both of my journalist colleagues are correct — frugality is good for you and your customers, and spending is good for the economy. Being fiscally responsible is also good for the economy — yours, mine and ours collectively. Using Linux saves you money so that you, in turn, pass on those savings to your customers and enjoy higher profits for your company. Higher profits and greater savings mean more money for raises, bonuses and consumerism. I'm no economist, but I'd say it's a pretty good plan.

* The Newsweek magazine belongs to my father-in-law.

This article was first published on ServerWatch.

Tags: open source, Linux, services, consumer, startups

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