Free vs. paid: Can't we all just get along?!?

As I mentioned in class yesterday, I fall somewhere in between Chris Anderson and Malcolm Gladwell on the debate over the primacy of free vs. paid on the Internet. I think Anderson bases his argument on a basic fact of recent technological history that is difficult to refute: The power to store and distribute information is continually getting cheaper and cheaper, and thanks to collaborative tools, more and more people are willing to produce that information for free as well.

The problem with Anderson's argument comes, as Gladwell points out, when he tries to turn this simple technological observation into some sort immutable law that's an ordering principle for the way the world should be run. In some cases and markets, economic principles based on free goods, services, or content makes the most sense. In other cases, it doesn't. Just because it works in some cases doesn't mean it's a binding (or even relevant) principle for others.

On the other hand, I do think free content/information/goods/services is a phenomenon that needs to be taken seriously by businesses, especially in the media industry. It can't just be waved off as "utopianism" or "freeloading" -- it's a real, actual phenomenon that has real, actual economic forces and explanations behind it. I think the vigorous defense of paid economies by Gladwell and many others in publishing industries is motivated in part by self-protectionism -- a desire to preserve a world in which the work that they do remains important, regardless of whether it actually is.

There's a sense on both sides of this argument that the other is living in a fantasy world: Paid says the free advocates are ignorant of the fact that someone is paying for all this "free" stuff, and free says the paid advocates are desperately trying to hang onto a model where their content/labor is worth a lot more and is a lot less replaceable than it actually is. I think both sides both have a piece of reality, and if they'd acknowledge some merit in the other's points rather clinging to their absolutism, we'd make some real progress toward a mutual understanding of how the Internet economy actually works.