diff --git a/guix/build/python-build-system.scm b/guix/build/python-build-system.scm
index 310ba8aa2e..3f280b0ac0 100644
--- a/guix/build/python-build-system.scm
+++ b/guix/build/python-build-system.scm
@@ -36,7 +36,70 @@ (define-module (guix build python-build-system)
 ;;
 ;; Builder-side code of the standard Python package build procedure.
 ;;
-;; Code:
+;;
+;; Backgound about the Python installation methods
+;;
+;; In Python there are different ways to install packages: distutils,
+;; setuptools, easy_install and pip.  All of these are sharing the file
+;; setup.py, introduced with distutils in Python 2.0. The setup.py file can be
+;; considered as a kind of Makefile accepting targets (or commands) like
+;; "build" and "install".  As of autumn 2016 the recommended way to install
+;; Python packages is using pip.
+;;
+;; For both distutils and setuptools, running "python setup.py install" is the
+;; way to install Python packages.  With distutils the "install" command
+;; basically copies all packages into <prefix>/lib/pythonX.Y/site-packages.
+;;
+;; Some time later "setuptools" was established to enhance distutils.  To use
+;; setuptools, the developer imports setuptools in setup.py.  When importing
+;; setuptools, the original "install" command gets overwritten by setuptools'
+;; "install" command.
+;;
+;; The command-line tools easy_install and pip are both capable of finding and
+;; downloading the package source from PyPI (the Python Package Index).  Both
+;; of them import setuptools and execute the "setup.py" file under their
+;; control.  Thus the "setup.py" behaves as if the developer had imported
+;; setuptools within setup.py - even is still using only distutils.
+;;
+;; Setuptools' "install" command (to be more precise: the "easy_install"
+;; command which is called by "install") will put the path of the currently
+;; installed version of each package and it's dependencies (as declared in
+;; setup.py) into an "easy-install.pth" file.  In Guix each packages gets its
+;; own "site-packages" directory and thus an "easy-install.pth" of its own.
+;; To avoid conflicts, the python build system renames the file to
+;; <packagename>.pth in the phase rename-pth-file.  To ensure that Python will
+;; process the .pth file, easy_install also creates a basic "site.py" in each
+;; "site-packages" directory.  The file is the same for all packages, thus
+;; there is no need to rename it.  For more information about .pth files and
+;; the site module, please refere to
+;; https://docs.python.org/3/library/site.html.
+;;
+;; The .pth files contain the file-system paths (pointing to the store) of all
+;; dependencies.  So the dependency is hidden in the .pth file but is not
+;; visible in the file-system.  Now if packages A and B both required packages
+;; P, but in different versions, Guix will not detect this when installing
+;; both A and B to a profile. (For details and example see
+;; https://lists.gnu.org/archive/html/guix-devel/2016-10/msg01233.html.)
+;;
+;; Pip behaves a bit different then easy_install: it always executes
+;; "setup.py" with the option "--single-version-externally-managed" set.  This
+;; makes setuptools' "install" command run the original "install" command
+;; instead of the "easy_install" command, so no .pth file (and no site.py)
+;; will be created.  The "site-packages" directory only contains the package
+;; and the related .egg-info directory.
+;;
+;; This is exactly what we need for Guix and this is what we mimic in the
+;; install phase below.
+;;
+;; As a draw back, the magic of the .pth file of linking to the other required
+;; packages is gone and these packages have now to be declared as
+;; "propagated-inputs".
+;;
+;; Note: Importing setuptools also adds two sub-commands: "install_egg_info"
+;; and "install_scripts".  These sub-commands are executed even if
+;; "--single-version-externally-managed" is set, thus the .egg-info directory
+;; and the scripts defined in entry-points will always be created.
+
 
 (define setuptools-shim
   ;; Run setup.py with "setuptools" being imported, which will patch
@@ -149,6 +212,9 @@ (define bindirs
 (define* (rename-pth-file #:key name inputs outputs #:allow-other-keys)
   "Rename easy-install.pth to NAME.pth to avoid conflicts between packages
 installed with setuptools."
+  ;; Even if the "easy-install.pth" is not longer created, we kept this phase.
+  ;; There still may be packages creating an "easy-install.pth" manually for
+  ;; some good reason.
   (let* ((out (assoc-ref outputs "out"))
          (python (assoc-ref inputs "python"))
          (site-packages (string-append out "/lib/python"