Artificial Scarcity and Its Discontents

PALACED #16: apples vs. ideas

Happy Sunday!

Another benefit of this newsletter that I sort of recognized before, but that has become especially apparent now, is that it forces me to read. I love reading. Life, however, has a way of making it difficult to find time to do what we love.

Committing to the newsletter means committing to reading. If I don’t read, I’ll have nothing to write! Funny how that works.

Today’s issue is meant to help me start grappling with the definitions of words. If you’ve read this newsletter at all in the last year, you’ve seen me use the word “post-capitalism.” I’m sure it means something slightly different to all of us, but if I’m going to use a word, I should probably take the time to properly define it.

That’s not going to be done completely today, but I want to begin to dissect specific, concrete elements of what post-capitalism entails.

Today, we’re going to (briefly) define artificial scarcity.

What does it mean to be scarce?

Let’s start with the basis. To be “scarce” is to be limited. Crude oil is scarce — they are not infinitely available to us. For all practical purposes, air is not scarce — we can breathe it 24/7/365 and we won’t run out (note that I didn’t say clean air).

Classical economics tells us that we deal with scarcity by participating in a market. For example, the price of crude oil rises and falls based on changes in supply and demand.

This works because we are working with goods that are naturally scarce. There really is a finite amount of crude oil in the world. Thus, our economies assign value (i.e. price) to the good using a framework of scarcity.

But what happens when things aren’t scarce?

Trading Apples vs. Trading Ideas

Let’s say you and I each have one apple. We trade. We still each have one apple.

Let’s say you and I each have one idea. We trade. Now, we each have two ideas.

Ideas are not scarce. Information is not scarce. For all practical purposes, data is not scarce. And this is where capitalist models begin to break down.

Researcher Kevin Carson argues that “capitalism has, since the beginning, depended on artificial scarcities — and in particular on “intellectual property.” Intellectual property law is the means through which these seemingly abundant goods have been made monetizable under capitalism.

The scarcity of information is artificial. It is created purely as a means of extracting monetary value.

Questions To Consider

To the post-capitalist, artificial scarcity serves the capitalist class by building walls around goods that should be publicly (or more widely) available. Here are some questions to consider, some of which I have strong opinions on/answers to, and others I don’t. I’ll spend some time answering these in the coming weeks:

  1. What other forms of artificial scarcity exist (besides intellectual property)?

  2. If our current economic system is built on scarcity — artificial or otherwise — how would a system that actively opposes scarcity work (i.e. is positive sum)?

  3. Must I give up something of “scarce value” in order to prove that something is valuable to me?

Lots to think about. If any of these questions catches your eye, shoot me an email with your response! Would love to discuss.

Stray Links

Here are some things that caught my eye this week:

I’m currently reading Capital and Ideology by Thomas Piketty, the Nobel Prize-winning French economist. In it, Piketty outlines the development of capitalism and argues for a more “participatory” economy. I’m very excited to work through it and will probably be citing it a lot in the coming weeks.

I recently came across the works of Julian Shapiro. He’s a writer, but his writing is fundamentally different than anything else you’ll find online. He doesn’t write blog posts and he doesn’t publish on a regular basis. Instead, he’ll occasionally publish super in-depth “handbooks” that encompass virtually everything he knows about a topic. The writing process, for him, is a way to become an expert on topics and skills he cares about. I’m currently digging into his guide on writing well.

The title speaks for itself: Violence and the Sacred: College as an incubator of Girardian terror. I don’t agree with all of the takes, but it’s definitely an interesting lens in the “should you go to college” debate.

Reach out if anything was interesting. Share with your friends. Press the like button on the top. Appreciate you all :) see ya next week.

— Jihad