Izabella Kaminska - The end of artificial scarcity

The scarcity manipulators are finding it harder and harder to convince the world there is a shortage of goods.

It’s worth pointing out that every industry has its own manipulation technique in this regard:

• Too many commodities =
stockpile surplus in dark inventory.

• Too many garments, clothes and retail goods =
create fashion to make old product seem outdated.

• Too many pharmaceuticals =
create patents to reward inventors.

• Too much free music =
create copyright laws to restrict free access.

• Too much free media =
enforce paywalls and subscriptions.

• Too much food =
convince society to constrain itself by making thin beautiful. Destroy food rather than give it away for free.

• Too much free energy =
stop subsidising it, let inventory go to waste, bankrupt it.

Yet it is logical that eventually the dam will bust. All these goods will flow onto the market for free. Once they do, only those offering “quality” will be able to justify any charges at all. And even these will gradually become deflated as the system becomes ever more efficient at making quality product. And when that happens money itself will die, because who needs to save for their old age, if over the time the system is going to provide ever more “stuff” you need for free or almost for free.

Read it at FT Alphaville
[Beyond scarcity] The end of artificial scarcity
By Izabella Kaminska

During times of economic struggle it’s easy to fall into the trap of focusing primarily on what might still go wrong rather than how things may turn around. My feeling this morning is that over the past several days I’ve fallen into that trap, which obscures my long-term optimism for the US and society. Reading this opening from the above piece inspired a change of tune (at least briefly):

With so much doom and gloom about, we’d like to take you on a trip through the looking glass to a world where the future is bright, not bleak. Optimistic, not pessimistic. Hopeful, not dismal.

When considering economic measures or financial markets, one often focuses on aggregate measures, such as GDP, or levels of an index, such as the S&P 500. The trouble with these measures is that they often miss significant improvements in living standards that are difficult to calculate. For example, consider the effect on your livelihood over the past 15 years from such companies as Facebook, Google, Apple, and Amazon. These companies have revolutionized their industries or created new ones by either offering services for free or forcing down prices from all their competitors. The gains to society (consumers) are almost certainly many times larger than the changes reflected in GDP or stock prices. Technology continues to create new avenues for more efficient production of goods and services. “The end of artificial scarcity” will lower the prices of these goods and services so that millions (or billions) of people will be able to afford a greater number of goods. That reality is definitely a reason for optimism.