Jamie Dimon - For sale, one petard, hardly used

Today JPMorgan, America's biggest bank and one of the monsters of the 2008 bailout season ($25 billion), 'revealed a surprise trading loss of $2bn (£1.2bn) on complex investments made by its traders' (BBC, today)

Fortunately JPMorgan's CEO, Jamie Dimon (for whose name Microsoft's spellchecker corrects to 'Demon'), is a man of principle. To be precise, his principle is this:

I don't think just because someone's underwater they say I don't have to stay there. But they're supposed to pay the mortgage, and we should teach the American people, you're supposed to meet your obligations, not run from them. Because you have a mortgage doesn't mean you should run away as it goes down. (quoted in the Huffington Post online, 21/03/09)

Well, that seems clear enough - not only will Mr Dimon not be looking for yet another bailout, but he would apparently recommend that no one gives him one if he did. And given his status as one of the financial luminaries of our day, who are we to gainsay his wisdom?

He's pretty stiff with the authors of the bank's distress - well, with some of them:

There were many errors, sloppiness and bad judgement. These were egregious mistakes... They were self-inflicted and this is not how we want to run a business. (quoted by the BBC)

And again, speaking to NBC's Meet the Press last Sunday, the Great Man said:

We made a terrible, egregious mistake. There's almost no excuse for it.

('Almost' no excuse? I wonder who he thinking of excusing.)

Only one omission, really - the man who led them to all this, the man whose capacity to control his bank is so feeble that he has been exposed yet again, the man who in April described concerns about the bank's problems as a 'tempest in a teapot', and the man whose hypocrisy is so vast that he could, without the least sign of a blush, say the above about American mortgage-holders after being bailed out on a truly staggering scale by those very same mortgage-holders.

So what is the solution? The Beeb also quotes Mark Williams, a professor at Boston University and a former regulator at the Fed, who observed that:

Taxpayers ultimately have to bail out these 'too big to fail' banks. And that's what JPMorgan is - it is too big to fail.

Given that these banks are structurally integral to the US and global economies, this is probably true. But there is nothing in the need to protect the integrity of the banking and economic systems that obliges us to let the likes of Mr Dimon and the many colleagues who were also party to this and previous disasters continue running our major economic institutions. Or the shareholders to own it, for that matter - they are supposed to carry the can when the bank fails. We just need the institution, its employees and its deposits and contracts.

Way to go, Jamie, as they say on your side of the Pond. And the way to go is - out. Bye...

How do open source projects survive?

I spent a very pleasant and interesting Friday evening last week with some acquaintances of my son’s – a left group consisting mainly of under-30s – and they were discussing the open source movement.  It was an informative meeting, not only by virtue of the well-informed presentation by Martin and Lambert, our German hosts, but also the contributions from the floor. Some were interestingly informed, not least by direct experience of open source development, but also in some cases because of the misunderstandings.

One issue that occurred to me is why, once they have reached a certain level of maturity, the employers of the individuals who actually create open source products like Linux or WordPress do not claim their property rights over the result. After all, who would not want to own Linux or WordPress as a commercial property?

So is there a legal basis for claiming rights over open source systems? I have no idea really, but some years ago, when I was working for a large consultancy, the partnership forced one of its own members to relinquish rights to a very successful book he had written on the grounds that, although he had written it in his own time, they still owned the IPR in anything he developed. This may be a peculiarity of American law, but they certainly won.

So why not Linux or WordPress, or any other open source system? Given that pretty much all such products are probably made by employees of existing companies, presumably they would have the same claim on the end-product as the consultancy I mentioned above. Given the maturity and value of such systems, it is surely time for them to insist on their (piratical, exploitative, deeply immoral) ‘rights’.

When I raised this issue with Martin and Lambert, they replied that it is still in these companies interests to leave these systems under open source control, and point out that many of them actually assign staff to working on open source systems. But I am not convinced that they have any such interests: these are now very mature products, there is a vast market of current and prospective users, and all the risk involved in creating a popular, industrial-strength system has already been taken by unpaid volunteers. And if employers are funding this even more directly, by paying individuals to work on open source projects, I cannot believe that this is for any reason but their own self-interest. In most cases (I would guess) the products are indirectly beneficial to them, as valuable auxiliaries and conduits to their own products and services.

So why aren’t WordPress & Linux and all the rest being claimed as the rightful property of the big corporates? Primarily, I would guess, because they are not easily fitted not their current business models, or even more simply, because it is impossible to divided them up between the various claimants – we simply have no idea who contributed what. It’s not a very good model for a more libertarian approach to development – the result escapes corporate control only because the wolves can’t work out which parts they can rightfully carry off.

(Incidentally, this gives the lie to the idea that open source systems are free or that they represent what could be done if a free community were to set to work on a give problem. Open source projects are funded by companies, whether or not they want to be. It’s just that the funding consists of paying people so much that they are still willing and able to carry out yet more serious development outside work. So open source remains a radically dependent model of development, not a genuine breakthrough from capitalist property rights.)