When A Humor Site Understands The Implications Of Abundance Better Than The 'Experts'…

Economics

from the nicely-done dept

A whole bunch of you* sent over the article from humor site Cracked, all about scarcity and abundance in economics. Wait, what? A humor site? Yeah, a humor site. Of course, they don’t officially claim it’s an article about scarcity and abundance in economics (though, they come close). Instead, in true linkbait-fashion it’s called “5 Reasons The Future Will Be Ruled By B.S.” Nicely done. Then, it focuses on the idea that the future can be described as FARTS: Forced ARTificial Scarcity.

That, of course, is the kind of thing we talk about all the time, and damn these Cracked guys, they actually make it funny:

Remember the debut of Sony’s futuristic Matrix-style virtual world, PlayStation Home? There was a striking moment when the guys at Penny Arcade logged in and found themselves in a virtual bowling alley… standing in line. Waiting for a lane to open up. In a virtual world where the bowling alley didn’t actually exist. It’s all just ones and zeros on a server–the bowling lanes should be effectively infinite, but where there should have been thousands of lanes for anybody who wanted one, there was only FARTS.

The key point, raised at the beginning of the article, which is the point we’ve been trying (and most likely, failing) to make for years, is that this isn’t just about music and movies. Issues of abundance where there used to be scarcity is going to impact all sorts of industries, even beyond what many people expect. Or, as the folks at Cracked explain:

Which brings me to an amusing story. In the last few decades, thousands of babies in Third World countries have died from contaminated baby formula. Wait, did I say amusing? I typed the wrong word there. Anyway, what happens is the mothers mix the baby formula with contaminated water, because sanitation is poor. So why the hell do the mothers feed their infants poison formula when they can just produce milk, for free, from their own bodies? The answer is that they do it because the manufacturer of the formula, Nestle, ran lots of ads telling them to.

If you want to know what the future looks like, there it is. The future is going to hang on whether or not businesses will be able to convince you to pay money for things you can otherwise get for free.

Some of you think I’m about to talk about file sharing and DRM and the evil record labels. But that’s just a teaser of what’s coming. The world has changed. All the rules we were trained to believe about society from birth until now are about to go out the window.

In other words, get ready to learn how to “compete with free.” Of course, it turns out that it’s really not that difficult. They also do a bang up job walking through the basic thought process that goes into the steps down the road of abundance:

An ebook sold to a library will thus delete itself out of existence after a year, or after X number of times it had been lent out. This is a big source of controversy between publishers and public libraries, maybe because both of them know they’ve found the loose thread that can unravel all of society. After all: A. Why can’t the library just buy as many digital copies as are needed for the customers, and keep them forever, if they don’t naturally degrade?

B. Wait a second. It’s just a digital file. Why not just buy one copy, and just copy and paste it for every customer who wants to read it?

C. Wait a second. Why do you need the library at all? Why can’t a customer just buy a copy from the publisher and “lend” copies to all of his friends?

D. Wait a second. If no printing and binding needs to be done, why do you need the publisher? Just buy it directly from the author.

E. Waaaaait a second. Why buy it? Once the author makes one copy available, why can’t everyone just grab it for free?

So, the article’s author, David Wong, concludes, the future of pretty much all commerce is going to be about marketers trying to convince you to buy stuff that you can get for free anyway, and when he notes that you probably think you’re too smart to fall for that, he points out that you probably have already, and goes about listing just a couple of examples on his own desk, such as bottled water, Windows on his computer and Excedrin pain medication.

Now, I recognize that it’s a humor piece, and not meant to be taken that seriously, but since it makes some good points in a humorous manner, I do want to push back (not in a humorous manner) on some of the points made in the article. First up, I’d argue that what he’s talking about isn’t really “forced artificial scarcity” at all. Forced artificial scarcity is when the laws are set up to artificially create the barriers that leave you little choice to buy. What he’s talking about isn’t forced, but voluntary — and that’s cool. And it’s also not artificial. The reason people buy things, even when there are free alternatives is because of some very real scarcities, such as convenience, trust, reputation and patronage. So, for example, when he talks about buying Excedrin over the generic, he’s paying for a real, not artificial scarcity (and certainly not forced). He’s paying extra for the very real scarcity of brand comfort and trust.

Separately, he exaggerates (yes, yes, I know, it’s a comedy piece, and exaggerating is how comedy works, but I’m the idiot trying to pretend there are real lessons in it, so hear me out) the jobs “lost” due to these changes. The jobs change, certainly, but they’re not necessarily lost. And that’s because with each abundance, all kinds of new scarcities are created as well. Historically, as industries defined by scarcity move to abundance, the new scarcities tend to create even more new jobs. Now, it’s true that it’s not always easy for those in the old jobs to make the switch to the new ones, but almost always other new jobs do open up (which were often more lucrative than the old jobs). Remember when automated phone switching was going to put all those operators out of work? Except, yeah, that didn’t happen. Instead, automated switching created tons of new jobs, such as call centers, and led to new innovations (like the internet) that created even more new jobs.

But, yeah, those are finer points to nitpick in an otherwise quite enjoyable piece on the economics of scarcity and abundance. And, now, I’m left wondering why I don’t go out and hire someone who’s actually funny to write about the various important issues we like to cover on this site…

* And despite so many of you sending it in, we already knew about it by the time you did. That’s because hidden in the middle of the article there, Cracked links to our story about libraries fighting with publishers over ebooks. And, despite the fact that this is the sort of link in the middle of a long story that people normally ignore, Cracked appears to get more traffic than Google and Facebook combined, and so even when an infinitesimally small number of those readers chose to click on that obscure, boring-sounding link in the middle of such an article, it shows up prominently in our log files, making me wonder who cracked Cracked to add a link to Techdirt and what could I ever do to get that sort of traffic to an article on the economics of abundance and scarcity?

Filed Under: abundance, economics, scarcity