Say That Again

by Mike Masnick




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
    Jim Vernon, 7 Feb 2007 @ 7:40am

    Copyright creates scarcity

    I agree that digital technology renders scarcity (almost) meaningless in the context of producing and distributing content. And I understand and sympathize with the view that copyright has not adapted to the digital age. But, copyright was developed essentially to create scarcity. The printing press had just as dramatic an effect on content scarcity as the computer. The rationale behind copyright is to give creators the opportunity to reap economic benefits from their creations. I'm not arguing that copyright laws are perfect (far from it!). And I'm not arguing that economics is all about scarcity. I'm saying that your point about scarcity not exisiting for digital assets ignores the deliberate (if artificial) scarcity inherent in copyright protection. It might be bad, but it is the law. Your use of quotes around "property" and "theft" make it seem as if you don't believe these are valid concepts. The "property" in this case isn't a Jeffersonian "idea", but a right. And rights can be stolen. While this doesn't give the RIAA the right to do whatever they want to enforce copyright laws, I think the real issue is how we should adapt copyright to the digital age. (That discussion should also include patent laws, but they aren't quite relevant to a discussion of content.)

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