That’s actually not capitalism but monopolism.
Adam Smith put it like this for one of the mechanics (and you will notice that it’s the exact opposite of ‘unbridled’ that leads to the bad effects you subscribe to ‘capitalism’, but what in fact is a monopolization of a market):
“The interest of the dealers [referring to stock owners, manufacturers, and merchants… anyone really], however, in any particular branch of trade or manufacture, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.”
&
“The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”
…Wealth of Nations, 250 years ago
What all of these mechanics do is to control the supply, so that demand outstrips it with the goal to generate economic profits instead of just normal profits (sustainable, revenue = cost) as the buyers enter in bidding competitions to acquire the now rare product.
That’s all there is to it.
But the OP’s problem is not even hinged to that can-of-worms per my opinion.
His business is rather falling victim to technological progress and changing environments.
FOSS is being created in a distributed manner by its users with their own resources.
The users themselves get their hands dirty and make the tool they need/want.
They do not pay somebody else to do it.
And enabling this is technology like the collaborative cloud that’s been developed over the last couple decades, sourceforge, github, gitlab, etc. pp.
FOSS software costs resources to be created and maintained, nothing around that.
But the ones who create it and the ones who use it are the very same people.
No financial middle man or capital loaner required (and taxes aren’t generated either as there are no transactions there ;-).
So what you have in front of you is just another chapter in ‘creative destruction’ that is being driven by technological progress.
