John M. Newman
86 Geo. Wash. L. Rev. 513
Myths matter. This Article is the first to confront a powerful myth that pervades modern economic, technological, and legal discourse: the Myth of Free. The prevailing view is that consumers capture massive welfare surplus from a flood of innovative new products that are offered free of charge. Economists, legal scholars, and industry stakeholders created an origin story—a myth—to explain how these products became “Free.”
But that orthodox origin story is fatally flawed. This Article formalizes, then debunks, the Myth of Free and its underlying assumptions. The Myth is riddled with internal inconsistencies, logical errors, and factual inaccuracies. In their place, this Article provides a revisionist history of Free, one that offers greater descriptive and predictive accuracy. Along the way, it solves several puzzles: Why has Free become the default online business model? Why does the age of abundance—so often predicted—always fail to materialize? And why is society nonetheless drawn to such predictions?
The task is urgent: the Myth of Free is not benign. It has misled courts into granting protected legal status to Free-product suppliers in cases ranging from contract disputes to antitrust and privacy litigation. It has also motivated policy proposals that call for eliminating market interventions—or competitive markets themselves—without adequate justification in either case. Moreover, policies designed for a post-scarcity world necessarily overlook the persistent problems attendant to scarcity, thereby creating substantial allocative inefficiencies. This Article seeks to dispel the Myth of Free before it can wreak further harm to societal welfare and the rule of law.
