diff --git a/Makefile.lib b/Makefile.lib
index 92811269f..7fcd01f43 100644
--- a/Makefile.lib
+++ b/Makefile.lib
@@ -93,9 +93,10 @@ INCLUDE_ALL=1
 endif
 
 ifneq ($(findstring init,$(MAKECMDGOALS)),)
-# FIXME: Detect when $(subdir)/Makefile is $(srcdir)/$(subdir)/Makefile
-# and error out so the user won't overwrite the 'master' Makefiles.
 INCLUDE_ALL=1
+ifndef SRC
+SRC = $(shell cd $(top_srcdir) && pwd)
+endif
 endif
 
 ifdef INCLUDE_ALL
@@ -130,7 +131,8 @@ all-default: $(LIB_O) $(PROGS) $(MAN1) $(MAN5)
 init-default:
 	@$(foreach subdir,$(sort $(SUBDIRS)), \
 		$(MKINSTALLDIRS) $(subdir) >/dev/null; \
-		echo 'include $(SRC)/$(RELPATH)/$(subdir)/Makefile' > $(subdir)/Makefile;)
+		test -e "$(subdir)/Makefile" \
+		|| echo 'include $(SRC)/$(RELPATH)/$(subdir)/Makefile' > $(subdir)/Makefile;)
 
 clean-default cleanall-default:
 	@-test -z "$(CLEAN)" || $(RM) $(CLEAN)