Economics Of Abundance Getting Some Well Deserved Attention

from the about-time dept

It's great to see Chris Anderson getting lots of attention for his recent talk on "the economics of abundance," because it's exactly the type of thing that a lot of people have been discussing for a while -- but still hasn't permeated the mainstream. In fact, it's quite similar to the talk I gave at the Cato Institute back in April in discussing why certain people seemed to have so much trouble grasping the economics of the digital age. Basically, it's the problem that occurs when people focus too hard on the idea that economics is the study of resource allocation in the presence of scarcity. That only makes sense when there's scarcity -- and in digital goods, scarcity doesn't exist.

Dave Hornik has a wonderful post about Anderson's talk while Ross Mayfield is also discussing how he's come to realize that the economics of scarcity doesn't apply digitally. Now, if we stuck with the focus on "scarcity," then I should be upset that these two are basically repeating the "idea" I discussed back in April. Those who keep harping on the importance of "property" and love to say that you can "steal" content might even say that this idea was "stolen." That, obviously, is ridiculous. These are basic ideas that we have all realized is fundamental and a truth of economics. And, it's hardly a new idea (which is why my one quibble with Anderson's own post is his decision to call the idea of the economics of abundance a "radical attack"). Mayfield talks about those who helped him realize it, from Jerry Michalski to Howard Rheingold. In the comments to that post, Julian Bond brings up the ideas of Buckminster Fuller and and Alan Cooper. In my case, the inspiration came from many different people, including the teachings of Alan McAdams (my old mentor and professor) and the writings of Brian Arthur (who focused on "increasing marginal returns" rather than diminishing ones) and even back to Thomas Jefferson, who famously said:
If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.

So, no, it's not a new idea at all -- and yet, many people still don't seem to want to understand it. They don't believe that the free market can function with a lack of scarcity. It's understandable why that could make some uncomfortable -- but, it's a fundamental misunderstanding based on this desire to force scarcity where there is none, just so economics can continue to be the study of scarcity. It's this inability to get rid of that scarcity thinking that's holding back a number of developments these days, and the more people who realize this and the more people talking about this, the better. And it is fitting with the theory of abundance. The more abundant this discussion is, the more likely people will grasp it. And, it's especially exciting that someone like Chris Anderson is pitching it, because of his ability to take complex economic ideas and make them easy to understand, while getting people to listen. Hopefully, this is just the beginning of a widespread discussion about this topic.

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  1. identicon
    Dewy, 13 Mar 2007 @ 9:49am


    Its interesting to see how what was "old" is new again.

    The time was when musicians were paid for play... not for some "concept" of a recording. When that changed with the invention of the phonograph, new business and economic models had to be developed. Live music did not "Die" nor did musicians starve.

    What did happen was a bunch of businessmen inserted themselves into the pay (read food) chain and made themselves wealthy off of the labor and creativity of the musicians.

    They're "contribution" was in the production and distribution of the content created by musicians... and more often than not the musician was paid pennies on the dollar for his creation.

    Now that the costs and availability of production and distribution are dropping with new technology, these FatCats are crying foul and lobbying the government for restrictions to protect their "investment".

    I am going to agree with the above poster who says we're paying for the packaging here. Plastic, Paper, fuel... these things still have significant expense. To hold a CD in your hand is to hold all of those expenses... and you pay for that.

    To listen to a song you are left with nothing tangible. There is no "Product"... you didn't buy a hammer and drive a nail to have a hammer left over. You listened to a song... and it is ethereal... it is a moment in time gone with nothing tangible left over but the memory. without the backup CD we are all 1 virus or hard drive crash away from having nothing... so we own nothing.

    Lets also review how the RIAA have also gone at the music education industry. They are trying to shut down Tablature sites that help other musicians learn to play, claiming the works being interpreted are stolen and used without permission.

    Copyrights may have been intended to serve the creator, but have been perverted by the industry to hold us all hostage. Now their house of cards begins to crumble... musicians and listeners all begin to rebel against the manipulation-for-profit of something that is intended for the listening enjoyment of everyone.

    I also agree with the original poster of this thread (Mike) that the industry will adapt and change to work... and that its inevitable... no one will stop the forces at work here... all they can do is adapt or die.

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