The Rent Hypothesis

Either way there is a cost to use: either paying for the rights to the patent, "paying" in completely arbitrary time determined by patent laws which do very little to distinguish completely different technologies and lifespans, or paying to reinvent in trade secret scenarios.

I feel like with trade secrets its much more in our control to remedy situations where many people need access to a technology quickly. It allows for dynamic solutions. For example, private contracts could handle the patent use case without necessarily having IP. They could provide the end product as a service, or provide know-how to build the product under a "subscription-service" where the client agrees to pay a very large fee over the course of several years/dependent on unit sales/etc (the analog to the royalties/licensing fees), with the punishment being spelled out in the contract that if the tech is replicated in some other way or leaked, the client company must pay a large "breakup" fee. That way the client is incentivized to use the tech and keep it secret as well. Client companies can then assess whether these fees are better than the cost of R&D they would have to undertake to develop it themselves. Just look at software: there's plenty of stuff I could build myself, but I happily pay for an existing solution despite not being "forced" to. I think we very early on decided on a patent model and just threw up our hands and said 'no one would possibly invent otherwise!'

Landlords don't make money by providing a service or selling goods. They make money by sitting on something no one else is allowed to have. They don't have to do anything more than sit back and collect checks. Sure, they bought the land originally, but there's no more investment to be made after that. They can invest in a nicer building or grounds, or compete on services such as "free" utilities or quicker repairs, but those are above and beyond the "rent-seeking" part of his revenue. He could just rent an empty lot, like a trailer park or campground.

This is analogous to, for example, telephone lines. They cost a lot to initially build out, but once they're there, the phone company only has to charge people for access. They provide a service back at the switching station, but most of what they're getting money for is owning lines that already exist. It's harder to separate rent from their other revenue, but it's there.

It generalizes to all revenue that is of the "sit back and collect checks" variety. Cellular carriers sitting on a chunk of spectrum they can sell access to. They can just rent it out to MVNOs if they don't want to provide those services themselves. Film studios sitting on a catalog of work they can sell, license, etc. So yes, IP revenues are definitely rents.

The argument would be: Microsoft and Apple feel that existing IP protections on software would not sufficiently prevent competitors or consumers from 'stealing' the results of their work. So, they don't release the source code. Because they don't release the source code, there's a duplication of effort between Microsoft, Apple, and any other kernel-writers.

If there existed extremely strong IP protection laws for software, that required release of source (like a patent, basically), then Apple and Microsoft might release source, duplicate less effort, and their disadvantage to Linux would be reduced.

Open Source is what happens when you have a system that encourages these secrets to be shared. The only difference is, Linux manages to get R&D effort without the benefit of a monopoly-grant, or indeed, without any direct profit motivation.