The Economics of Programming Languages

By David Welton

April 18, 2005

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I like programming languages a lot. I've used a number of them professionally, and have even written one myself—Hecl—although it borrows most of its ideas, if not source code, from Tcl. And, of course, I've taken part in my share of debates and discussions on "which language is best," a topic which of course doesn't have one clear answer but is often the source of heated arguments.

I recently read an interesting book, Information Rules: A Strategic Guide to the Network Economy by Carl Shapiro and Hal R. Varian (Harvard Business School Press, 1998; ISBN: 087584863X), which talks about the economics of the world of high technology. While reading it and thinking about programming languages, a number of things clicked. They aren't earth-shattering conclusions. On the contrary, a lot of them are more or less common sense, but it's nice to read that there are some methodically studied theories behind some of the intuitions, hunches and observations I've made over the years.

In this article, I'll attempt to list what I believe to be the most salient points of the economics of programming languages, and describe their effects on existing languages, as well as on those who desire to write and introduce new languages.

Languages as Products

Programming languages, like any product, have certain properties. Obviously, like any other sort of information good, production costs in the sense of making copies are essentially zero. Research and development (sunk costs) are needed to create the software itself, which means that an initial investment is required, and if the language is not successful, chances are the investment can't be recouped.

This applies to many information goods, but programming languages also have some qualities that make them special within this grouping. Namely, that they are both a means of directing computers and their peripherals to do useful work, but they are also a means of exchanging ideas and algorithms for doing that work between people.

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