> I have long had a problem fitting open source into this model. Its hard to identify the actors in the exchange, what is being exchanged, and what the "value" is.
The value is removal of scarcity. In fact, copyright on software was a legislative introduction of scarcity where there was none, so open source is just removal of that.
When scarcity is removed, availability is increased. It is as simple as that. The vast amounts of open source software being developed are case in point - no judge or legislative body needs to rule that copyrighting software by default is not necessary to have an innovative industry - we see it daily with our own eyes.
A counter case for this is Microsoft. They sell many of their software products at 70+% margin. Quite obviously, monopolistic pricing in action. Monopolies are bad for economy.
PS. I always think of the old argument that licensing fees are only small percentage of TCO. Imagine a company that's now in financial trouble with all the cash they spent on licensing over the years in a bank account, collecting interest. Wouldn't that be nice? ;-)
> But somewhere someone is paying for all those free cycles, free storage and free communication: TANSTAAFL. Humans act and the interplay of all those actors is the study of economics. Open source activity is part of that.
I see this as 99.99% v. 0.01% problem. If you decide to participate in FOSS development, you take on 0.01% of something (bandwidth, development cycles etc.), while getting 99.99% back from others. Not a bad deal, I think.