• Step one: Congress should require the Executive Branch to implement the recommendations of a group of a high-tech CEO council that identified about $1 trillion in savings achievable by 2020 through better use of technology.
  
• Step two: Congress should overhaul corporate taxation so as to reward job creation, expand research and development, encourage long term and sustainable equity growth, provide regular returns to shareholders, sustain sensible balances of risk and reward, and applaud success in exporting goods and services for sale in other countries.
  
• Step three: Congress should require the Executive Branch to aggregate its purchases of bandwidth so as to drive increased capital into new networks, and to move all government services into digitized forms delivered to all broadband customers.
  
• Step four: Congress should require that all classrooms and libraries have the opportunity to win major monetary awards from government for providing breakthrough e-learning capabilities to their communities.

This fluency with words means he is well placed to comment on the age of abundance we are entering thanks to the rise of digital technologies. One of his latest pieces is entitled "How the long tail cripples bonus content/multimedia", and appears as part of The Domino Project, "a new way to think about publishing. Founded by Seth Godin and powered by Amazon" – a partnership that is itself symptomatic of the digital times.

The post is in response to a HuffPo interview with President and CEO of Ingram Content Group, David "Skip" Prichard. Prichard shows himself optimistic and surprisingly open to new ideas for someone leading a book distribution company – not a sector known for its innovation.

But Godin concentrates on one particular aspect of Prichard's replies, which is typified by the following exchange:

Are there enhanced books available this holiday season that have already changed the definition of a book?

Yes, for example, a biography can to come to life in many ways. Jacqueline Kennedy: Historic Conversations on Life with John F. Kennedy has all of the interview audios, videos, photographs, text, and transcripts available. Even classics -- Penguin has updated Pride & Prejudice with clips from the movie and even instructions on dancing. For the 75th anniversary of The Hobbit, HarperCollins released an e-version with exclusives including J.R.R Tolkien's book illustrations and recently discovered Tolkien recordings. Publishers are still learning what added value readers will or won't pay for. I expect we'll continue to see lots of experimentation in this arena.

As Godin puts it:

it’s not a few publishers putting out a few books for the masses. No, the market for the foreseeable future is a million publishers publishing to 100 million readers.

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But one of the most telling examples is the following:

Performers such as Stephen Fry have taken to reading their books in public, Dickens-style

The same is true for countless other writers, musicians and artists before Dickens, who lived when there was little or no copyright, and whose works could thus be copied freely. In other words, people have been using abundance to sell scarcity not just for years, but for centuries. Maybe it's time today's copyright industries got the message.

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This is the quality of intellectual property law that provides an economic foundation for anti-Star Trek: the ability to tell others how to use copies of an idea that you “own”. In order to get access to a replicator, you have to buy one from a company that licenses you the right to use a replicator. (Someone can’t give you a replicator or make one with their replicator, because that would violate their license). What’s more, every time you make something with the replicator, you also need to pay a licensing fee to whoever owns the rights to that particular thing. So if the Captain Jean-Luc Picard of anti-Star Trek wanted “tea, Earl Grey, hot”, he would have to pay the company that has copyrighted the replicator pattern for hot Earl Grey tea. (Presumably some other company owns the rights to cold tea.)

This solves the problem of how to maintain for-profit capitalist enterprise, at least on the surface. Anyone who tries to supply their needs from their replicator without paying the copyright cartels would become an outlaw, like today’s online file-sharers. But if everyone is constantly being forced to pay out money in licensing fees, then they need some way of earning money, and this brings up a new problem. With replicators around, there’s no need for human labor in any kind of physical production.

I. Rivalrous

Rivalrous goods diminish in value the more they are used. For example, a bicycle: if I use it, it gets me from here to there; if you use it, it gets me nowhere. If I acquire your bicycle, you don't have it any more. Only one of us can have the bicycle at one time. We can share it to a limited extent, but the more it's used the less it's worth; it gets dinged up and wears out. The more people use the bicycle, the less utility it has.

If I steal your bicycle, you have to take the bus

All material things - things made of atoms - are rivalrous, because an object cannot be in two places at the same time. Everything in the physical world is rivalrous, even if it's abundant.

A commons is a rivalrous good. Hence the "tragedy of the commons": the more people use a square of land, the less valuable it is to each of them. The grass gets eaten too fast to grow back, the soil can't handle the incoming rate of sheep shit, and degradation ensues.

Fig. 1: a lovely day for grazing on the commons


Fig 2: Tragedy strikes

Rivalrous and non-rivalrous are often confused with scarce and abundant, but they're not the same thing. Air is abundant, but it is still rivalrous - some "users" could make it toxic for the rest of us, because air is not infinite. Land and water are so abundant in North America that Native Americans couldn't imagine owning or depleting them, and look what happened. We treat the oceans as infinite, but they are not; human pollution and exploitation is killing ocean life. We also pollute the vast ocean of air - hence acid rain. Air and oceans are commons.

Commons are commonly-held rivalrous goods. Because they are rivalrous, some uses (or over-use) can poison them or otherwise diminish their value. For that reason, Commons(es) actually merit rules and regulations.

But Culture is not a commons, because Culture is not rivalrous and can't be owned.

II. Non-Rivalrous

Non-rivalrous goods, as their name implies, don't diminish in value the more they are used. A favorite example of a non-rivalrous good is the light from a lighthouse. It shines for everyone. No matter how much you look at it, I can see it too.

Everyone can see the light from the lighthouse...

This is a pretty good example, but it's not quite right. Theoretically, if enough tall boats are in the harbor, they actually can crowd out your lighthouse light.

...except when they can't. Once again, too many sheep ruin everything.

Consider sunlight in Manhattan; yes, the sun shines for everyone, but if they build a high-rise next to your apartment you won't see it any more. There's only so much sunlight that hits a certain area, and that light is rivalrous. You can always move, of course - except land, while abundant, is definitely rivalrous and not infinite, so you'll have to engage in some rivalry to do so.

The light metaphor has another problem: is light a particle, or a wave? If it's a particle, then light is rivalrous. If it's a wave, then it's not.

III. Anti-Rivalrous

Anti-rivalrous goods increase in value the more they are used. For example: language. A language isn't much use to me if I can't speak it with someone else. You need at least two people to communicate with language. The more people who use the language, the more value it has.

Which language do you think more people would pay to learn?

• English
• Esperanto
• Latvian

More people spend money and time learning English, simply because so many people already speak English.

Social networking platforms increase in value when more people use them. I use Facebook not because I love Facebook (I certainly don't), but because everyone else uses Facebook. I just joined Google+, and will use that instead of Facebook if enough other people use it. If enough people flock to yet another platform, I'll use that instead. Meanwhile I love Diaspora in principle (I was an early Kickstarter backer, before they surpassed their initial $ goal), but I don't use it, because not enough other people do. When it comes to social networks, I am a sheep.

A classic "Nina's Adventures" comic, which I only realized was anti-rivalrous a few years ago. ♡ Copying is an act of love. Please copy and share.

Cultural works increase in value the more people use them. That's not rivalrous, or non-rivalrous; that's anti-rivalrous.

IV. Some Exceptions That Prove The rule

I know what you're gonna say now: "what about my credit card number? That doesn't increase in value if it's shared!!" That's right, Einstein, because your credit card number is not culture. Here are two things that aren't made of atoms and are nonetheless rivalrous:

1. Identity
2. Secrets

Identity is some mysterious mindfuck that my very smart friend Joe Futrelle says no one has satisfactorily defined yet. But whatever identity is, it's rivalrous. If more people were named Nina Paley and had my home address and social security number, I'd be screwed. But that should highlight that my name, home address, and social security number aren't culture. They may be information, but they're not culture. They don't increase in value the more they are used.

Secrets have power as long as they're secrets. They lose their power when they are shared. When I become conscious of some secret that's weighing on me, I share it with at least one other person (even if they are a confidante also sworn to secrecy): I can feel the secret's power diffused just by the act of sharing. Notice I use "power" here instead of "value." Secrets may be of little or no cultural value - most people don't really care who that guy slept with 6 years ago - but they can certainly have power, especially when used for blackmail. Which is why it's important they remain secrets, so they're not used for blackmail, or harassment, or any reason at all. Privacy is important. Because secrets aren't culture. Culture is public. Secrets are, well, secret. Until they're public, whereupon we get scandalous stories that are culture - humans love to gossip - but aren't secrets any more. The story might gain value, but the secret loses it.

Money vs. Currency
And how about money? Money is scarce, right? It has to be, or it doesn't work (thanks Wall Street & Federal Reserve for screwing that up). But currency has more value the more it is used! Would you rather have your scarce 100 Euros in Euros, or in giant immoveable donut-like stones on a remote island?

A large rai stone in the village of Gachpar

I remember when the US dollar was a valuable currency; markets all over the world wanted dollars, because they were so widely used and exchangeable. So you want your money to be scarce, but you want your currency as widely used as possible.

V. Conclusion

It's important to treat scarce goods as scarce, abundant goods as abundant, rivalrous goods as rivalrous, and so on. Wall Street treated money, a scarce and rivalrous good, as though it were infinite/non-rivalrous, and look what happened.  Power companies, and the politicians they own, treat the environment, which is a rivalrous commons, as though it were non-rivalrous, and we have dying oceans and mass extinctions and other events you don't want to think about so much that you'll just get mad at me if I point them out here so I'll stop. The RIAA and MPAA, and the politicians they own, treat Culture, which is anti-rivalrous, as though it's rivalrous. They are doing for Culture what Wall Street did for the economy. If you want to help make this better, treat Culture like what it is: an anti-rivalrous good that increases in value the more it is used.

Addendum: Why do I say Culture is not a Commons?

Some of the witnesses whose evidence has been received by Your Majesty's Commission have urged the claim of authors to perpetual copyright, on the ground that the right of an author to property in his published works is as complete and extends as far as the right of any person to any property whatever.

If this analogy were admitted, it appears to me that it would be difficult to dispute the claim of an author to perpetual copyright; but I venture to submit that the claim of an author to a right of property in his published works rests upon a radical economic fallacy, viz., a misconception of the nature of the law of value.

The necessity which is recognize in all civilised societies of conferring rights of private or personal property arises from the limited supply of that for which there is an unlimited demand. It is only from a limitation of supply that there can be any value in exchange.

But supply may be limited either by natural or artificial causes.

Wherever supply is limited by natural causes it is necessary in the public interest to limit the demand, by investing the possessor of the subject of it with proprietary rights, for without them the progressive increase of an unlimited demand operation on a limited supply would lead to the dissolution of society. To whatever extent these rights partake, as they often must, of the character of a monopoly, they do so in virtue of attributes derived from the nature of things, which may be regretted, but must be accepted as inevitable, and which the law is therefore compelled to recognise.

There is no such necessity in the case of those objects which are useful or necessary for mankind of which supply is unlimited. In that which is absolutely unlimited, in the air, in sunlight, in the forces of nature, such as heat, electricity, magnetism, &c., there is no natural exchangeable value, and therefore no property; that which, although absolutely unlimited in itself, nevertheless exceeds all probable or possible demands in exchange, there can be little or no value, and little or no property, e.g., in the sea, in the water of large or unfrequented streams, in the game of a wild country, or in the fish of the sea. It is in fact scarcity which creates value, and renders property necessary. Property exists in order to provide against the evils of natural scarcity. A limitation of supply by artificial causes, creates scarcity in order to create property. To limit that which is in its nature unlimited, and thereby to confer an exchangeable value on that which, without such interference, would be the gratuitous possession of mankind, is to create an artificial monopoly which has no warrant in the nature of things, which serves to produce scarcity where there ought to be abundance, and to confine to the few gifts which were intended for all.

The prevailing feeling among the studio managers I spoke with is that Netflix's streaming service will be a good outlet for the least-valuable material. If they have their way, Netflix will be the Internet equivalent of a swap meet, where only the most dated and least popular titles are available. The studios are betting that eventually people will get bored with the service.

Netflix takes the scarcity out of the equation, one film industry insider said. People can watch any of the service's commercial-free films and shows anytime they want.

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.

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.

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?

Once-abundant privacy is now scarce. Once-scarce publicness is now abundant.

The economics of abundant publicness mean that the old gatekeepers -- editors, agents, producers, publishers, broadcasters, the entire media industry -- overnight lost their power. That's why they're so upset. That's why they keep complaining about all these amateurs taking over their sacred turf -- because they are. What they thought was valuable -- their control -- now had no value. They can't sell their casting couches and presses on craigslist for nothin'. They are being beat by those who break up their control and hand it out for free (Google, craigslist, Facebook, YouTube, etc.).

Abundant publicness also creates new value. Google search is made up of that value. Twitter movie chatter predicting box-office success is that value. Annotations on maps, restaurant reviews, health trends, customer desires -- and on and on -- all find value in our publicness and so new companies are being built on that value. That is why it is in the interests of both companies and customers to be public and why privacy -- when it does compete, when it discourages publicness -- becomes a nuisance for them.

Abundance breaks more things than scarcity does. Society knows how to react to scarcity.

It's easy to say "preserve the best of the old and combine it with the best of the new," but in revolution, the best of the new is incompatible with the best of the old. It's about doing things a whole new way.

If you are selling a scarcity -- an inventory -- of any nonphysical goods today, stop, turn around, and start selling value -- outcomes -- instead. Or you're screwed. Apply this rule to many enterprises: advertising, media, content, information, education, consultation, and to some extent, performance.

You think you sell a movie--you do not.
You think you sell a book--you do not.
You think you sell a song--you do not.

You sell an experience, something communicated, something elusive and ephemeral. Something mystical and transformative and inspiring. All these abstract things simply come in the shape of a movie, a book, or a song.

Never before has it been possible to strip away these experiences from the product... until now, the Digital Age.

The Digital Age lets us duplicate products infinitely. And, for the first time in human history, creators are not deprived of their original copy.

...now we can read a novel without buying a book.
...now we can watch a movie without buying a movie ticket.
...now we can listen to a song without buying a record.

The key to the Digital Age is to recognize that many existing products already embed intangibles, which is why those products are still being bought. However, once those tangibles stop being offered, or a competitor offers better intangibles, the customer will go elsewhere.

Creators can sustain. They will sustain. The market wants to sustain creators. Yet only the ones who realize that they don't sell products, but experiences. Only those creators are the ones worthy of survival in the Digital Age.

"Chief among these bizarre maneuvers is the idea that, when manufacturing their flimsy dystopia, they actually ported the pernicious notion of scarcity from our world into their digital one. This is like having the ability to shape being from non-being at the subatomic level, and the first thing you decide to make is AIDS."

In 1999 we released our final contracted album for Castle Records and, in anticipation of the way we planned to do business in the future, called it Marillion.com. We had already collected the email addresses of more than 20,000 fans through free CDs, downloads, etc. and by asking these fans to order and pay for the upcoming CD in advance, we were able to finance the writing and recording.

We maximised the profit from the pre-order by cutting out the record companies, distributors and retailers, manufacturing and shipping direct. We also released the album in the shops through an independent distributor to reach the fans not on the internet.

We released three more albums between 2001 and 2007 using this business model and despite continuing falls in CD sales worldwide we have managed to shield ourselves from the worst by continuing to build our database of email addresses, currently more than 65,000, and by offering special edition pre-order CDs with 128-page hardcover books containing beautiful artwork.

I'm sure many people still download our music illegally but the real hardcore fans want the special editions and are willing to pay £25 or more for them.

If you'll excuse me for jumping on a Techdirt hobby-horse here, this is another example of the economics of abundance at work. Security products are increasingly becoming commodities. Obviously the software ones -- anti-virus tools, software firewalls, intrusion detection systems -- have a marginal cost of zero, and even many of the hardware devices are built on commodity parts that get cheaper every month. What hasn't gotten cheaper is the expertise required to put the bewildering array of security tools together into a coherent system that's customized for a firm's particular business. Indeed, as security products have gotten more numerous and more complex, it has actually gotten harder to keep track of them all and know which security tools are the best ones to use in any given situation.

And crucially, this isn't something you can outsource to a third party. I've written before (in the context of e-voting) that encryption isn't magic pixie dust that automatically makes a system more secure. The same point applies to security more generally. Having the best firewall in the world won't do you any good if it's not configured properly, or if your network hasn't been designed with security in mind. And because every large organization has different security needs, every organization needs a slightly different security setup.

This creates a huge opening for companies who understand that customers are not looking to buy a security software product, but a suite of software that they can count on to be secure without worrying about the details. We've pointed out that this is essentially the business Red Hat is in: not selling software but selling the expertise of its employees with respect to the software. Security is a big part of that. "Security software" is an infinite good, and the market for it will get increasingly crowded in the future. On the other hand, the expertise needed to build complex software systems securely is as scarce as ever, and such expertise is one of the key ways that software companies can distinguish themselves from the competition.

Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.

Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. The difficulty is the same one we have with compounding. Possibilities do not add up. They multiply.

"But what if I had the practical ability to charge commercial entities for access to or use of information of this sort? It would, first, go from a free good to a scarcer resource, and second, I could protect those parts of my transaction history that I feel to be most sensitive. In effect, we need a functioning market into which I can sell my transaction history."