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Monopoly Freedom Day

Each year the Tax Foundation, a 70-year old nonpartisan tax research group based in Washington, D.C., issues a press release on Tax Freedom Day, the day in the year where the average American worker has earned enough to pay their taxes for the year. In 2008 Tax Freedom Day was April 23rd. Of course, this is a rhetorical device, since we really pay taxes throughout the year, at various rates, and not all at once, but it is a useful device that illustrates the relationship between wages and taxes.

So, this got me thinking whether this same analysis could be applied to what I’ve been calling the “Monopoly Tax”, the excess price we pay for products from a monopolist when adequate open source alternatives are available.

Let me take a stab at the analysis. First, let’s look at the price of two entry-level PC’s, identical except that one comes pre-installed with Ubuntu and OpenOffice, while the other comes pre-installed with Microsoft Windows and Microsoft Office. I’ll use Dell’s Inspiron 530/530n as an example. Same chip, same RAM, same monitor, same drive, same graphics, everything the same, except one comes with Linux and the other has the Microsoft software.

  • Dell Inspiron 530 with Microsoft Vista/Microsoft Office = $818.00
  • Dell Inspiron 530N with Ubuntu/OpenOffice = $428.00

So the “monopoly tax” in this case is $390, or 48% of the total cost of the system. Now that amount is probably not going to crush you or me. But for a student, a small town library strapped for funds, the recently unemployed, or a family in the developing world, this is a huge difference.

We can further quantify this by calculating the date of “Monopoly Freedom Day” for countries around the world, based on per-capita income. If you purchase a new PC on January 1st, you will work up until Monopoly Freedom Day just to pay the excess cost of the non-open source software. Up until Monopoly Freedom Day the fruits of your labors are not going to you, you family or your community. Your wages are going to Redmond, to fatten the stock portfolio of the wealthiest man in America. Think about it. You know that Microsoft has. With the poorest countries in the world being the ones who would benefit most from using open source to avoid paying the Monopoly Tax, Microsoft has started a new “Scramble for Africa” in order lock them into a costly cycle of technological dependency in a new colonialist campaign.

Country

Monopoly Freedom Day

Luxembourg

Jan 02

Ireland

Jan 04

Norway

Jan 04

United States

Jan 04

Switzerland

Jan 04

Qatar

Jan 04

Austria

Jan 04

Denmark

Jan 04

Netherlands

Jan 04

Finland

Jan 04

United Kingdom

Jan 04

Canada

Jan 04

Belgium

Jan 04

Singapore

Jan 04

United Arab Emirates

Jan 05

Greece

Jan 05

Australia

Jan 05

Japan

Jan 05

Israel

Jan 05

France

Jan 05

Germany

Jan 05

Italy

Jan 05

Cyprus

Jan 05

Spain

Jan 05

New Zealand

Jan 06

Slovenia

Jan 06

Korea

Jan 06

Czech Republic

Jan 06

Portugal

Jan 06

Malta

Jan 07

Kuwait

Jan 07

Barbados

Jan 07

Trinidad and Tobago

Jan 08

Argentina

Jan 09

Saudi Arabia

Jan 09

Poland

Jan 09

Croatia

Jan 10

Mauritius

Jan 11

South Africa

Jan 11

Chile

Jan 11

Russia

Jan 11

Uruguay

Jan 12

Malaysia

Jan 12

Costa Rica

Jan 12

Mexico

Jan 12

Romania

Jan 13

Bulgaria

Jan 13

Kazakhstan

Jan 14

Brazil

Jan 14

Belarus

Jan 15

Bosnia and Herzegovina

Jan 15

Turkey

Jan 15

Thailand

Jan 15

Tunisia

Jan 15

Panama

Jan 16

Iran

Jan 16

Colombia

Jan 17

China

Jan 17

Ukraine

Jan 17

Azerbaijan

Jan 17

Venezuela

Jan 18

Peru

Jan 20

Serbia

Jan 20

Fiji

Jan 24

Morocco

Jan 24

Lebanon

Jan 24

Jordan

Jan 24

Sri Lanka

Jan 25

Armenia

Jan 25

Philippines

Jan 25

Egypt

Jan 27

Ecuador

Jan 29

Jamaica

Jan 31

Syrian Arab Republic

Feb 01

India

Feb 04

Cuba

Feb 04

Vietnam

Feb 08

Ghana

Feb 18

Pakistan

Feb 18

Uzbekistan

Feb 26

Zimbabwe

Mar 01

Bangladesh

Mar 04

Côte d’Ivoire

Mar 24

Kenya

Apr 08

Nigeria

Apr 22

Congo

Jun 09

Tanzania

Jun 13

{ 5 comments… add one }
  • Anonymous 2009/01/26, 03:41

    An interesting rhetorical device, but you overlook the fact that Microsoft charges much lower prices for its products in many of the countries at the bottom of your list. How would the ‘date’ column look if you were to calculate it using local prices?

  • Conrad Mazian 2009/01/27, 23:11

    Rob,

    Very nice, I like it.

    Conrad
    Microsoft Delenda Est!

  • Rob 2009/01/29, 23:06

    Thanks. Now of course, Microsoft in some cases discounts software for students. One of the characteristics of software is its negligible variable costs. So you can sell it at whatever high or low rate a particular market segment will support. But of course, they cannot offer a low price everywhere and for everyone. The drug dealer may give his newest customers free samples, but everyone else pays dearly.

    That is the big difference with OSS. We can afford to give everyone in the entire world a free copy of Ubuntu. But Microsoft would go broke and end up on the ash heap of history if their profit margins were driven down by giving away a substantial portion of Windows and Office licenses. That is why OSS will win in the end, and why Microsoft cringes from it like a vampire from a crucifix.

  • David Gerard 2009/02/06, 16:35

    Rob – some say this is already happening. Some such as Microsoft, who blame their financial woes on netbooks, i.e. having to actually compete with Linux.

    (It pains me to be writing this in Windows because Kubuntu 90.4a4 is unusably broken.)

  • NotZed 2009/02/07, 20:04

    Ideas become more valuable the more people you share them with.

    Likewise, Free Software becomes more valuable the more people you share it with.

    There’s no way a proprietary model can compete with this on a level playing field – which is why they’re trying to make sure it never becomes level. They will still ‘lose’, if they don’t simply adapt.

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