You will get this if you are running the commands from the python shell:
>>> __file__
Traceback (most recent call last):
File "<stdin>", line 1, in <module>
NameError: name '__file__' is not defined
You need to execute the file directly, by passing it in as an argument to the python
command:
$ python somefile.py
In your case, it should really be python setup.py install