This is an over simplification, of course. Despite the fact that this post is long-winded, I have barely scratched the surface here. The truth is that there are many subtle factors that affect the total friction in any particular open source ecosystem independent of those that are radically reduced in an information economy, and that any of these factors may mean the difference between success and failure. My point (or Benkler's point, really) is that the success of open source in general seems counter-intuitive only when we fail to examine all of the forces at play. Further and equally importantly for the audience that is most likely to be reading this post once you lower transaction costs through the mechanisms of a network-based information economy, it turns out that you have a world in which academics can function rather well. After all, academics are the folks who willingly publish articles for free in journals that turn around and charge the universities for access to those same articles. The academe is built on the economics of prestige. It rewards through recognition, which is often the coin that drives open source projects -particularly open source projects that benefit relatively unprofitable markets such as higher education. It also allows individual programmers the sort of Lone Rangers who tend to gravitate toward academia -to make part-time or full-time incomes by supporting open source for universities and other schools, either directly by contract or indirectly through the small support firms that the universities often hire. It thrives on the contribution of fractional resources (especially when time and creativity are the primary resources being contributed) by highly skilled knowledge workers.
We typically reduce all of economics to supply and demand, but it could be equally well formulated in terms of cost and benefit. Every system of production, whether it is a company, a market, or an open source community, has its costs. On one end of this spectrum, firms work because they can balance relatively lower costs of command-and-control structures relative to a higher cost market. On the other end, commons based peer production such as open source projects can have lower costs than either firms or markets in a networked environment, where communication of participants and distribution of goods are far lower than we experienced in the industrial economy that those of us who are voting age and older experienced for most of our lives. It isn't intuitive to us because we're not used to having to live and work in space, having spent most of our lives on the ground. I'm here to tell you that the laws of physics still apply. It's just our intuitions about them that need to be adjusted.
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