The first part of this thesis examines the economics of software production. Two development models are evaluated for their ability to deal with the peculiarities of software: The proprietary, closed source model and the Free and Open Source Software (FOSS) model. The former is shown to create enormous, usually hidden costs compared to a hypothetical, ideal solution. The combination of current regulations and proprietary, closed source development leads to a suboptimal resource allocation and – eventually – market failure. It is suggested that FOSS offers a solid approximation of the ideal solution made possible by technology and infrastructure advances, poised to become the dominant new development model in free markets unless regulations keep favoring the incumbent and largely obsolete model. The second part is concerned with the scalability of the Linux kernel, with a focus on its ability to scale down to machines with a limited and limiting amount of memory. The canonical solutions which date back to the time of the introduction of virtual memory in the 1960s are reassessed in the light of hardware developments and modern usage patterns. A prototypical implementation of a load control mechanism for the Linux kernel is presented and evaluated along with the potential of load control in modern general purpose operating systems. Finally,