Though I am not going to advocate Laissez-faire economics, I do want to point out that the open source world is as close as you can get to a pure free market. The reason is because if you make a product in the open source world, anybody is able to study it, modify it, redistribute it and even sell it without many restrictions.
If person A delivers a great product, but person B is able to study the product and make it better in a cheaper way, the free market has done its job. This can happen in the open source world but has a hard time happening in the proprietary one.
Current Patent Laws Prevent True Market Freedom
Take the iPod. Steve Jobs admits the iPod has been fully patented through and through. If somebody has the ability to deliver the same product, just better and cheaper, his/her hands are tied.
We will never know if Apple is the company who delivers the iPod at the greatest value for customers since nobody is legally allowed to try.
Proves Red Hat Is The Best
This is not true of Red Hat. Red Hat makes billions, and if someone was able to take Red Hat, make it better and cheaper in a way that pleases customers there is nothing stopping them.
Guess what, Oracle recently tried and failed. Despite the open possibility, nobody can deliver Red Hat software with as great of value as Red Hat can. This proves Red Hat is truly the best at what they do.
If You Really Provided Your Product At The Best Value You Wouldn’t Need Patent/Proprietary Protection
Look again at Red Hat. They don’t need them. They still make billions. I have a feeling Apple and Microsoft would run scared stiff if you took their patents and proprietary licenses from them for the risk of someone doing it better and cheaper would be extremely high.
Edit: When I said Red Hat makes billions I mean they have made billions over the years. (total)