One of the weirdest things I heard when listening to the Cato Institute debate was an economist claim “a tenet of my profession is that people won’t pay for something they can get for free.” Someone objected, using the analogy of bottled water. There’s a far better example: The New York Times.
<sarcasm>Incredibly, this institution puts out pages and pages of high-quality professional content each week and then distributes them by means of men in trucks across the country overnight where they sit, waiting to be sold to people. Meanwhile, the exact same content is available for free using an insidious peer-to-peer downloading system called “the Web” by typing in the keyword “www.nytimes.com”. Those people at the New York Times must not understand the Internet or something!</sarcasm>
More examples: the thriving shareware market, the Baen Free Library, Janis Ian and others.
Other times, people claim that no one will create if they can’t get paid. I’d like to introduce you to free software and just about every weblog on the planet.