It seems to me that there's several ways to approximate the invisible hand even with negligible marginal production costs. We've seen it historically in the production of music, theatre, sermons, scientific papers, education and other socially good, difficult-to-measure information products with positive economies of scale:(posted 8756 days ago)Patronage.
Patronage has appeared for software, as well. Much of Linux, the "free OS" is actually packaged, and mirrored (placed on public internet servers) by commercial providers (Debian, Red Hat, Caldera, etc.), who support programmers that provide no clear direct added value to the company: The programs are given away on the Internet. The value the companies gain is rapid service from attentive experts: the traditional reward of patrons.
Another model is the subscription: Free samples (as when we browse magazines), yet charge for a steady stream of value. Many of the books, reviews, etc. on the net seem to take this model.
Software subscriptions have foundered, and I do not know why, although I know that one of my acquaintences has tried to sell such a system. I suspect that it has to do with transaction costs, and the lack of consensus concerning digital money.
You know, it seems to me that a valuable service the gov. could provide would be to mandate a standard e-currency, to facilitate subscription. This suggestion might have more value coming from you. Subscriptions would re-introduce the invisible hand to the information economy. With low-overhead e-cash, and competition by providers, the price of information would fall to its shared cost of production. This might reintroduce social incentives.
Oh well; I'm not an economist. My analysis could well be flawed. I read your site regularly, by the way. ------------------------------------------------------------ ----------
Contributed by Ray Van De Walker (rgvandewalker@juno.com) on July 8, 1999.