Sure, let me know if you're ever in Wroclaw, Poland. :)

"Because you're starting from the premise that these contributions have an inherent value."

Yes, things have value. You're not going to ruin everything by arguing that there is not such thing as value (other than market value) and that without market value we are in no position to say whether a cure for cancer is more valuable than the Holocaust, are you?

"But the premise of capitalism is that the best way to determine something's value is how much others are willing to pay for it."

And why would anyone accept that premise? It's absurd. I see people paying tons of money for things that have little value. If value were definitionally equal to market price or revenue, then it would be meaningless to say that someone wasted their money on something. In this worldview (which I would call "market fundamentalism"), if Patsy paid $10000 for a rubber chicken, then the rubber chicken is by definition worth $10000. Anyone with even a cursory knowledge of how markets work knows that they are prone to groupthink, panic, irrational exuberance and other anomalies.

Another example: if you accept this "no value but market value" nonsense, you have to conclude that giving medicine to sick people in Africa has no value, since these people are not paying for the medicine (they have no money).

Value is ultimately a moral category. The goal of the economic system is to make sure valuable contributions are rewarded with appropriate economic value. At least it's one of the possible goals.

"In the absence of any restriction, these creators haven't created anything of value because it's easily reproducible."

It may be easily reproducible, but for someone to reproduce it, it must be created in the first place. The creating is the hard part, not copying bits.

"If you place the arbitrary restriction of 'copyright' on these works, then, yes, they become valuable through artificial scarcity. But that's true of anything that has very little value."

Yes, I see your point. You can inflate the economic value of anything through regulations. That doesn't mean, however, that all such regulations are wrong. To say otherwise would be to say "the market is always right".

You are okay with making money on SaaS because it happens "without arbitrary legal restriction". But the reason why a SaaS company can maintain the secrecy of their source code is rooted in arbitrary legal restrictions. One such restriction is that I cannot break into the 37signals HQ and copy their codebase. Why not? I don't see why I shouldn't be allowed to enter a particular building and have a look around, as long as I don't break anything (and even if I do, I can reimburse 37signals for broken locks, smashed windowpanes, etc.). So in a way, you can make money on SaaS because of an arbitrary legal restriction.

Just as we have laws that prohibit people from entering corporate buildings, we can have laws that prohibit copying of content unless authorized by the creator. Unless I'm making some kind of mistake in reasoning (I'm kind of sleepy right now), I'm not sure one of these is more arbitrary than the other.

"In this world, how do you decide how much to pay them? In other words, how do you determine the value of their contribution?"

The government sets the restrictions (e.g. the copyright term, fair use, penalties); the rest is determined by the market. The restrictions themselves are somewhat arbitrary, but any human-made formal system is somewhat arbitrary. For example, the government sets an arbitrary requirement that you should have your car checked every year. This creates a market for vehicle inspection services. The price for this service is determined by the market and depends on many things, including the supply of specialists. Similarly, environmental laws create artificial demand for recycling services, green technology, etc.

Why is this done? Because we believe road safety and a clean environment have more value than the free market assigns to them. It is a matter of public policy.