Vaniver comments on Why capitalism? - Less Wrong Discussion
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Agreed! But this is why it's important to keep "free" separate from "cheap." At some point, someone will want something and not obtain it. The questions are what, why, and who. Capitalism seems like the best scheme for answering those questions, because of the various properties I discussed above (and some that I haven't brought up yet).
One of the strengths of capitalism is that it allows voluntary organizations to spring in and out of being--and so people can form whatever cooperatives they want, to take advantage of any new ideas or differing economies of scale. When things move from 'expensive' to 'cheap,' the sorts of organizations that exist around those things change accordingly.
Government is useful primarily for involuntary organizations--which have their benefits, but also their drawbacks, and should be employed with caution. It seems very likely to be proper to enforce nonviolence on the population through violent means, while much less likely to be proper to enforce a particular purchase or behavior on the population through violent means. But there are other purchases or behaviors that it may be proper to enforce, and so on.