The idea in the New Yorker article is that intellectual property (IP) law perhaps creates more inefficiencies than it resolves by making it too expensive to bother creating around existing IP and by making it apparently too expensive to round up IP owners to get the proper permissions. Against this argument was "Shados'" suggestion that what people really want is weak IP, not no IP:
Give your songs for free! The money is on the tour... Of course, as long as another band doesn't do -exactly- the same songs with a bigger marketing budget (and if everyone does it, ONE of the bands who copy you will most likely be better). Also, that's as long as the video of your show isn't in hi definition 7.1 surround blu ray the day after it for free (or even worse, SOLD by someone else). With absolutely -zero- copyright, its a lot less powerful as a promotion tool. (Now it works because you're only letting indiviuals step in... once corporations can rape your copyright too, things get a little grim). Oh, and without IP laws, people can rip off your name, your logo, everything, and not only sell it as free promotion to you... but make it -theirs- and use it for -themselves-.
If you're really well known... no one will think the "fake" Metallica is the real thing. If you're just starting though? BANG! Gone.
This reminds me of Radiohead's Thom Yorke, who commented to David Byrne that Radiohead's decision to give away In Rainbows could only work because Radiohead has an established brand, one for which people are willing to pay:
The only reason we could even get away with this, the only reason anyone even gives a xxxx, is the fact that we've gone through the whole mill of the business in the first place.
Intriguingly, open source tends to work very well for vendors at two ends of the spectrum: Disruptive newbies trying to break into a big market and established incumbents trying to hold off newbies.
On the "newbie" front, I see this every day. Open source provides an amazingly efficient way to reach new customers and new markets that proprietary software struggles to achieve. When I can close six-figure deals in 60 days without boarding a plane and with a relatively junior sales staff, I'm going to prove a significant burr in the side of my established competitors.
On the incumbent side, however, we've seen a bit less of this. Martin Fink talked about open source as a way to pillage competitor's profit margin, but this strategy is more like the disruptive newbie model than the established incumbent model.
Over time, I suspect we'll see established vendors creep closer to open source as a way to stave off competition. Microsoft and Oracle have already done this, to a small degree, but releasing stripped-down versions of their software for free (or cheap). Eventually they'll realize that open source achieves wide distribution due to its permissive licensing as much as its price tag, and they'll start to release some products (low end, most likely) as open source to hold off open-source competitors.
There's significant strategic value in open source and weak copyright and patents, but it is almost certainly the case that the amount of benefit derives from your company's market position. If you're new/disruptive or old/established, you may benefit from open source. Those in the middle? It's not as clear.