First, my apologies for the slow posting. I was traveling for all but five days last month (giving speeches for audiences ranging from telecoms to fashion), pretty much as I had the month before and the month before that and... Basically my life has been nuts since the book came out in July (yes, I'm writing this on a plane). The good news is that all these speeches should provide excellent blog fodder, once I can find a minute to write them up.
Second, I promised to post more on the economics of abundance, which has been a theme I've been toying with for a few years but am now starting to get serious about. As I mention in the book, one of the most common definitions of economics is "the science of choice under scarcity," which doesn't leave much room for abundance. Indeed, in many economic equations if you set the scarcity term to zero you get divide-by-zero errors. But economics is not a grand unified theory of everything, and nobody ever expect it to be. There is much in our world that economics leaves to other disciplines, from psychology to biology.
Yet just because economists struggle with abundance, that doesn't mean that we have to, too. Abundance thinking--understanding the implications of "practically free"--is a core competence of our age. It brought us everything from the iPod ("what if storage were so cheap you could put your entire music collection in your pocket?") to Gmail ("why should you ever have to delete an email?"). Most truly disruptive technologies disrupt because they take a scarcity assumption and, thanks to some technology that generates abundances, simply turn it on its head. Just think VOIP (why should phone calls, which use hardly any bandwidth, cost anything?) or how anyone under 25 uses a digital camera (why settle for stills when you'd rather have the video?)
Before I riff more on this theme in forthcoming posts, I'll close this one out with a round-up of interesting abundance-related posts that came in response to my original speech at Pop!Tech or just randomly popped up on my radar over the past week:
Zero is the loneliest number: Mike at Techdirt goes on a terrific tear on the theme after he comes back from disappointing policy debate where everyone seemed to be talking past each other, mostly because some saw the world through a scarcity lens and some didn't. On the plane back, he writes,
"I decided to reread a book I'd picked up at a used book sale a few years back, called Zero: The Biography of a Dangerous Idea, which is a fascinating history of the number zero -- and the fact that not only did it take societies ages to even recognize the number zero, it was considered heretical in some areas for a while. Zero caused all sorts of problems in that it didn't work like other numbers. It isn't a number. It's the absence of a number, and that screws up a lot of things. For thousands of years, it held back progress. You can't have advanced math or physics without an understanding of zero -- and the difficulty in accepting it was a real problem."
"Of course, for all of us who learned about zero in elementary school, this seems laughable. How could zero be such a difficult concept to understand? Except, as I read the book, it occurred to me that it's the exact same problem that was causing this breakdown in the discussion. It's incredibly easy to misunderstand zero in economics. That's because economics, we're often taught, is the "science of scarcity" or understanding resource allocation in the presence of scarcity. All too often, economics itself is defined by scarcity. So, for example, basic economics tells you that a free market will push prices towards their marginal costs. If their marginal costs are zero (as is the case with digital goods and intellectual property), then it says that price will get pushed towards zero. However, this makes people upset, and makes them suggest the model is broken when a zero is applied. They see a result where there is no scarcity, and it doesn't make sense to them since they've always understood economics in the context of scarcity."
Sooner or later, scarcity bites back: The always astute Nick Carr points out that the traditional scarcity functions that hold back the productivity efficiencies promised by Moore's Law--software and human learning curves--have been joined by another: electricity consumption.
"It's certainly true that, from the standpoint of the consumers of basic computing resources, those resources often seem "sufficiently abundant as to approach free." They are abundant, and that does recast a lot of economic tradeoffs, with far-reaching consequences. But if we step back and look at the supply side of computing, we see a very different picture. What Gilder calls "petascale computing" is anything but free. The marginal cost of supplying a dose of processing power or a chunk of storage may be infinitesimal, but the fixed costs of petascale computing are very, very high."
Nick's article-length post, which builds on the implications raised in George Gilder's Wired article (from which the illustration above was taken) and neatly squares it with his characteristically contrarian comment, is masterful. Read it all.
What if complexity were free? Erick Schonfeld casts 3D printing in abundance terms with a great example:
"He pulled plastic sample cases out of his bag filled with an array of tiny mechanical devices, gears, heat-sinks, and other parts. Then he showed me a small, white ceramic square not much bigger than a cell-phone battery. It was a prototype for a fully-functioning tiny chemical plant that could turn alcohol into hydrogen for fuel cells. Inside were 33 different cavities, pipes, and chambers made out of five different materials, printed one layer at a time. The final part was made of 300 layers. "Complexity, for the first time in history, is free," declares Chait."
Free French: Finally, Om Malik writes about an effort to out-FON FON:
"The maverick French broadband service provider, Iliad, and the company behind the Free, broadband service has made a habit of anticipating disruption; embracing it and then extending. Cheap broadband - they did that. Cheap (and almost free) Voice - they did that. Cheap IPTV, check. So what’s next to do? Open up wireless (WiFi) networks for one and all, and thus create one giant mesh."