Software as Capitol: an economic perspective on software engineering [Book Review]
or thousands of years, humankind's ever-rising mastery of technology F has been embodied in various tools, devices, and even physical structures. Of course, knowledge codified in books and diagrams, and human skills passed on from master to apprentice and parent to child, have also served as carriers of practical techniques and prescriptions. But the most elfective carriers of technology, right down to present times, have been capital goods--ranging from the simplest tools to the most intricate machines. The reason is that knowledge integrated in durable physical devices transcends barriers of language, time, and geographic space. In his fascinating book, Software as Capital, Howard Baetjer Jr, describes and analyzes the features and significance of computer !;oftware, which he points out is a very special kind of capital. He begins by briefly reviewing the role of capital goods in industrial production. "Producer durable'' machines and equipment-fixed capital-have the common characteristic that they last over many production cycles and raise the productivity of labor. In such devices, app ication-specific technological knowledge is embodied in the machine or structure, hard-coded in its design and construction. Indeed, Baetjer argues that capital goods a-e embodied knowledge, which, working in tandem with formalized and tacit knou4edge resident in people and their social organizations, makes up the productive capability of industrial society. In Baetjer's view, the evolution of computer softu,are is a direct extension of the development of knowledge by industrial society thr2ugh the design and construction of capital structures of ever-increasing complexity. Just like conventional capital equipment, software embodies well-testec. procedures for carrying out specific operations. In other words, software is knowledge encoded in computer executable logic. In the pre-computer era, such operational logic was designed into the hardware of the machine itself, as in mechanical or electronic switching systems. But with the advent of low-cost computing, control logic detaches itself from hardware and develops a relatively independent existence as sofrware. However, software is used not just in Software as Capital: an Economic Perspective on Software Engineering. Baetjer Jr., Howard, !E€€ Computer Society, L o s Ahmitos, Cdf, 1998. 1 9 4 pp., $25.