CNN Not Happy About Non-Scarce Economics... But Actual Arguments Are Scarce
from the apparently,-i'm-not-a-very-good-teacher dept
First off, I think it's great that CNN thinks this topic is worthy of discussion. I just wish they actually talked about what I've written about, rather than making a bunch of false assumptions. I kept waiting for the point where Ledbetter actually explains what's wrong with the economics I've been discussing, but he never gets to it. The few points he raises suggest that he either hasn't actually read what I've written or hasn't understood it very well. I'll take the blame and say that perhaps I haven't explained the position very well.
There are three points he raises, but he never digs into them or explains how they're flaws in the economics. First, he says that you should never trust anyone who says the laws of economics have changed. He's absolutely right. The problem is I never said the laws of economics have changed. In fact, I've said the opposite. The basic laws of economics have remained the same -- it's just that technology has increased the number of products that are non-scarce. In the past, not many people paid attention to what this meant for economics, but it's simply become more important. That's not new economics, it's just getting a better understanding of economics.
Second, he complains about my use of Amazon as an example, because it mostly sells physical books, rather than digital ones -- and physical books (of course) are a scarce good. Of course, as is abundantly clear in the quote that Ledbetter uses, I wasn't talking about Amazon turning books into non-scarce products, but about them turning shelf-space into a non-scarce resource. As I've said all along, what's important is the fact that non-scarce and scarce goods always coexist. So, the fact that there are scarce goods involved doesn't go against the economics we've been discussing.
Finally, he brings up the popular point that a movie costs $150 million to make, as if that somehow disproves the rest of the economics. Of course, it doesn't at all. We've discussed it quite a bit, in fact. Yes, producing the original infinite good costs money (sometimes quite a bit), but that's a totally separate issue from what you are selling and how much you should be charging. Even if the good is non-scarce, that doesn't mean it can't be used to make lots and lots of money. In fact, the movie industry has never really been about selling content. It's always been selling the experience of seeing the movie -- which is still scarce. People want to go out and have a fun social experience. The last Star Wars movie was one of the most downloaded movies ever... and was a huge box office hit.
Again, it's wonderful that CNN thinks this is an important topic to discuss... but there doesn't seem to be much to actually discuss here. If Ledbetter wants to engage in a debate on the economics of abundance and scarcity, that would be great -- but so far the actual economic arguments in his commentary are, well, scarce.