Generally the "Who will build a car, when someone else is giving them away, for free?" is true, but things can get so bad that people will pay. Canada gives away healthcare for free, but it is so poor and wait times are so long that well-to-do Canadians frequently travel to the US and pay out-of-pocket for treatment for serious conditions. Some years ago, their head of the Department of Health (or whatever they call it in Canada) flew to the US for his treatments. When people found out, there was a big stink.
Yes, a handful of people can escape the Free Shit Orgy trap, and eventually the whole thing collapses under its own idiocy, but I don't know why we should ever build such a trap.
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