There's a lot of crappy things that are 100% free market. Oligopolies come to mind. Just because it's a free market solution doesn't mitigate the negative experiences this person created for the other bidders.
Just because someone said "free market" doesn't mean you are obligated to recite the generic Litany Against Free Markets. The specific point here is that in a free market you are welcome to decide to volunteer to do something. Nothing about "free markets" prevents it. If you judge yourself to receive more utility from volunteering, then go ahead and do it. No central organization will stop you.
The idea that free markets "obligates greed", in a particular cartoon-villain sense of greed, is propaganda, not what the theory actually says. (Now, we can have a very profitable discussion about whether and where it enables greed, or perhaps structurally encourages it, and some interesting conversations on whether "encourages greed" is even necessarily always bad. But there is no way in which one is obligated to greed, such that you are somehow betraying some sort of ideal if you decide for your own reasons to act altruistically.)
I'm sort of amused at the number of people getting peeved about this. This person is volunteering to work for nearly-free for government civil service... if you are anti-capitalism or anti-free market and think people should be doing more for and with government... isn't that exactly what this is?
Are we really going to try to spin "someone volunteered to help the government with something" into "free markets are evil"? It seems to get rather into the "doth protest too much, methinks" domain.
This individual didn't volunteer to help the government. He undercut all competition in a competitive bidding process because his costs are $0 for the project.
This is one of the known failures of free markets, regardless of the actors intent the effect of his behavior is negative for those trying to participate in the market as a means of sustenance.
I'm not mad at the guy, he can do whatever he wants. It's just kind of a crappy thing to do knowingly to other people and, if widespread, could have some strange externalities.
Yes... a project for government. Are we really going to play the "privilege" card for someone volunteering for civic service? Yes... he has the wherewithal to do the work for free, and instead of lounging around or buying an XBox, he provided free government work. If that's "privilege" wouldn't you like to see more of it?
There's no shortage of work, and no realistic chance that the government is going to be able to get all of its software tasks done via donations, so worrying about what happens if everybody or even a lot of people do this is really looking the gift horse in the mouth.
> I'm not mad at the guy, he can do whatever he wants. It's just kind of a crappy thing to do knowingly to other people and, if widespread, could have some strange externalities.
I'm confused by this. According to this logic, it's a crappy thing to do to undercut anyone, ever, in any circumstance. Is that what you think?
No, I think under most circumstances it's completely fine to undercut someone. I think it's a crappy thing to do when someone is trying to participate in the market as a contractor and someone else as a volunteer.
This individual could have volunteered on any project but instead chose to participate in a bid based market for contractors at an effective $0 rate. Presuming those contractors will only contribute to Open Source projects if paid then, on net, the world would have been better served if the guy had volunteered on a project not open for bid.
I hope that makes a bit more sense. It's a nuanced issue to dance around via text without a long issue, the guy has every right to do whatever he wants but I think it's kind of rude and inconsiderate towards the contract market participants.
I believe I understand your position. In a situation where a project is open for market-rate bidding, you believe that only people looking to profit should bid. To do otherwise is more than rude, it hurts someone trying to make rent. I don't agree, for several reasons.
First, I think that because the goal here is a public good. As a result, civic engagement in the form of volunteerism is something to be welcomed and encouraged. Volunteerism in public good production is a net win, as it frees up resources for other uses where volunteer labor is not available. This could easily include paying contractors to write Open Source software, leading to a net increase in the production of Open Source software. The goal is a maximum of production of public goods, not a maximum of employment of people to produce public goods.
Second, I do not think you like where this logic leads if applied with your caveats. By your logic, you should object to any non-profit performing service that are also performed by for-profit entities in the event that the former undercuts the latter for service recipients. Your logic requires you to object to free clinics, MSF, and food pantries. All participate in markets as volunteers where others are attempting to participate as for-profit actors. Do you think MSF is rude and inconsiderate?
Third, I do not think you have considered the practical implications of your proposal. How do you propose 18F determine which projects should be market-rate-only and which should be volunteer-only? Do you think there's reasonable any way of doing this that produces ideal or near-ideal outputs? I do not. Such a distinction is at best arbitrary.
To review, I understand your position. You hold that volunteers should not undercut for-profit contractors in market bidding scenarios. I disagree. The product here is a public good, and we wish to maximize production of public goods for a given cost. Further, any logic that requires you to object to MSF should be reconsidered. Finally, I hold your proposed alternative to be unworkable.
Even if the winning bid had been $3000, it wouldn't have changed the situation for everyone who lost the bid. By bidding $1, he only caused one person to lose the bid, which is whomever bid second lowest.
I understand where you're coming from but I disagree. Ignoring the emotional impact on the losing bidders I think that reducing the net payout of the market has a negative effect on all market participants.
If he won at a bid based on cost it would have kept the market at a price level comparable for all participants. He won the bid by ignoring all cost which has the effect of lowering the entire marketplace by pushing prices down.
He only pushed prices down compared to what the potential second lowest bidder would've bid. If the second lowest bidder was $1 (or even sometime withing a few dozen dollars of that), then there is basically no effect by his decision.
Well the problem is self correcting. People will stop giving quality bids if they don't think that there is any profit to be made because a bunch of volunteers have destroyed the market. There is no problem here. Only that anyone bidding should be aware that they won't get properly compensated for their work and time.
Too bad we're all supposed to benefit from what this market produces.
Having worked in a government agency before, I guess I wouldn't be surprised to hear that a needed project would be delayed indefinitely while we waited for market dynamics to correct themselves.
Yep. Fully agreed. I think it sucks for the other participants because it wasn't the "intent" of the market. At the end of the day the market is going to yield a solution, intent doesn't matter.
The market isn't destroyed, it's just driven to zero. You can't force market participants to behave in the fashion you want. The market being driven to zero is one solution for the market, it optimizes for the people selling services and the people buying them, it just doesn't optimize for the profitability of those trying to make money off of selling their services.
The idea that free markets "obligates greed", in a particular cartoon-villain sense of greed, is propaganda, not what the theory actually says. (Now, we can have a very profitable discussion about whether and where it enables greed, or perhaps structurally encourages it, and some interesting conversations on whether "encourages greed" is even necessarily always bad. But there is no way in which one is obligated to greed, such that you are somehow betraying some sort of ideal if you decide for your own reasons to act altruistically.)
I'm sort of amused at the number of people getting peeved about this. This person is volunteering to work for nearly-free for government civil service... if you are anti-capitalism or anti-free market and think people should be doing more for and with government... isn't that exactly what this is?
Are we really going to try to spin "someone volunteered to help the government with something" into "free markets are evil"? It seems to get rather into the "doth protest too much, methinks" domain.