The Economics Of Abundance Is Not A Moral Issue

from the continuing-the-series dept

As regular readers know, I've been working on a series of posts discussing the concept of economics when there's a lack of scarcity. My last post on the importance of understanding "zero" in economics (and the fact that many of the problems people have in grasping the subject being due to a misunderstanding of zero) kicked off a really interesting discussion, that has me diverging from my planned third post in the series. Instead, I'd like to focus on one of the key objections people keep coming up with: the idea that this whole concept of the economics of abundance makes no sense because it means the creators of content make no money and they have a right to make money for their creative output.

It makes for a compelling emotional argument, but it is wrong on two major points. First, is the idea that it means creators of content can't make any money. In fact, nothing can be further from the truth. What this series is leading up to is an explanation of how the opportunity for making money is even larger when you understand the economics, and don't rely on directly selling the non-scarce good. However, for now we'll leave that aside and focus on the second point: that there's a right to make money. That's completely false. Economics is not a moral issue. It doesn't care about anyone's "right" to make money from their creative output... and neither should you. The idea that anyone automatically has a right to make money from their creative output is wrong. Everyone has the right to try to make money out of their creative output, but if the market isn't there, then there's no money to be made.

For example, I could draw a picture on a scrap of paper and try to sell it as fine art -- but no one would buy it, because my artistic drawing ability is pretty weak. That is, the market would properly value my drawing at something close to zero because there would be no demand for it. It has nothing to do with my right to make money. Similarly, in a situation where there's a lack of scarcity, the market would properly value something at close to (or equal to) zero because there's infinite supply. It has nothing to do with the moral issue of the creators right to profit from the creative output, and everything to do with the market at hand.

Perhaps part of where this gets confusing is that we have the current situation to fall back on: where content creators have had a good run selling their content. People have trouble then understanding why we would suggest that they should learn how to take the same content they've been selling for money and give it away free. The issue here is that the comparison is wrong. It's not about a choice between being able to sell the content for money or giving it away for free, but a recognition of where the market is going. Historically, the content has been made scarce by connecting it to a specific media (music on CDs, video on tape/DVD, etc.). What the internet is doing is breaking down the barrier of that scarcity, and that's changing the market, pushing out the supply to infinite levels and putting clear pricing pressure on the content. People used to make a living selling buggy whips too, but the market changed, and they couldn't any more.

In other words, it's wrong to look at this as a "choice" between the old way and the new way, but to look at the market trends and recognize that the old way (pretending the content is scarce) won't be viable any more -- and when that happens, those who try to sell their abundant good based on scarcity will find that there is no market and no matter what "right" they have to try to make money, the market won't care. Once you realize that, you can make the argument that content creators should wait until that market shift is complete to make the change, but as we go forward, I'll hopefully make a convincing argument that it actually makes much more sense (and much more money) to begin shifting now, before being forced to shift. But, for that, we'll have to wait a little longer...

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  1. icon
    Gabriel Tane (profile), 17 Nov 2006 @ 6:13am

    Re: Can this be applied to other art?

    "Like... photography? Do you support me using other people's photos simply because the technology has changed and I can now digitize it easily?"

    Why shouldn't you? Does the person who snapped the picture own the images contained therein? If you take a picture of my house, does that mean that you have ownership over that particular angle and view of my house? No. It's a picture. Yeah, you may have found a really artistically nice view of that tree with the sunset, but there's no reason someone else shouldn't be able to copy that image. You found the value of that scene, now you need a way to market it. Try postcards. Then, you're selling postcards, not the image itself. Just like CD's, not the music therein.

    "Or like... writing? Would it be ok for me to take your fine blog and replicate it (which is even easier that copying music) on some other domain?"

    Again, why not? If you claim that the writing of this blog post is yours, that's not violating copyright, its plagiarism. While that's not illegal, it discredits you once it's discovered and no one listens to you afterwards. I'm sure Mike wouldn't mind free publicity and the spreading of this dissertation. As long as you post it with proper credits and don't take it out of context, he'll probably support it.

    If you do take it out of context, then Mike will probably ask you to fix it. If you don't, then it's up to Mike to make sure the public knows what you're doing and why it's wrong. Mike shouldn't be able to (and shouldn't need to) sue you just because you found the Copy & Paste function. I'm sure that if he wanted to, he could find interpretations of copyright laws that would force you to take your copy of the blog off your domain, but it shouldn't come to that.

    For example, in one of Mike's previous entries, someone posted some copyright-protected works of another analyst (that apparently always is at odds with Mike's theories) in the comments. Mike mentioned in response to that posting was that he disagreed with someone posting it (since it's a copyrighted work) and would remove it if asked. My point is that if the author doesn't want his work disseminated, he should ask people to take it down without resorting to legal action.

    But it does beg the question... if someone doesn't want their ideas circulated, why would they publish them anywhere, much less on the internet?

    Summary: you shouldn't (and can't) market the ideas or information. That means that you don't have some inalienable right to make money off of it. If there's not a market for it, you won't make anything. I could make some beautiful sculptures out of dog shit, but if no one wants to buy them, I'm not going to make money off of them. Just because I made them doesn't mean that the world just automatically has to give me money for them.

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