Wednesday, April 14, 2010

Thinking about Scarcity & Abundance


I keep turning the concepts scarcity and abundance in my head. Mind games are tidier when you think in the purest, most extreme forms. Let's consider the human condition to be constant flight from scarcity and constant seeking of abundance. There are two ways to get to that abundance:

I get some stuff, call it mine, and guard it. Now I’m in control. The more stuff I call my own, the safer I am from a world of scarcity. Just about everybody in America and most capitalist societies can identify with this instinct. And the result is that we are incredible hoarders and have recently doubled the amount of physical stuff we buy, doubled the weight of stuff we put into landfills, and built huge amounts of stuff-storage facilities across our country (see Juliet Schorr’s work).

Our legal systems and corporate protection of intellectual property follows these same instincts. We write patents to be absolutely as broad as possible so that someday, we’ll have access to any future value that might possibly be found in these ideas – whether or not we think up this future value, whether it is in our area of business, whether or not it is in our geography of interest. All ours.

Another perspective on scarcity-avoidance is exactly the opposite. Everything I get, I pool with my community. It is all ours. When things are going good, I contribute. When things are going badly, I am protected by the good fortune of others in my community. We recognize this approach in socialist and communist societies.

It’s curious that both approaches are trying to protect and maximize periods of abundance, and they are exactly opposite from one another.

Academics have refined the idea of stuff to think about “rivalrous” as opposed to “non-rivalrous” goods. Rivalrous goods are ones that we can’t use at the same time, or that get used up. My stash of fancy English toffee is rivalrous. If I don’t hide it, my kids will see it as something available to the “family community” and eat it all up. My abundance quickly becomes my scarcity. Conversely, sitting in the sun on a beautiful spring day: non-rivalrous. Plenty of sun, plenty of space.
Once upon a time, TV viewing was rivalrous. Your oldest brother always got to choose, and that was it. Today, we have Tivo, we have hulu, we have many TVs and PCs. TV-show watching is non-rivalrous.

Zipcar is another example of how we turned what was perceived as a rivalrous good – cars, that I needed to own in order to feel abundance – into a (mostly) non-rivalrous one. There is always a car around the corner when you need it; why bother to own one and have it sit idle much of the day?

So what do I conclude about the Western solution to our search for abundance through ownership?

1. Not everything is rivalrous, even though our knee-jerk reaction is to treat everything this way.
2. There is a lot of wasted value – an enormous amount of excess capacity is going idle because of our erroneous prejudice.
3. Technology can turn rivalrous goods into non-rivalrous ones.

2 comments:

Roy Russell said...

You're hiding English Toffee? Where?

Carlos Gershenson said...

About technology turning rivalry into non-rivalry, this can be expressed generally with the concept of "mediators" (e.g. money, traffic rules, social norms, laws), which reduce "friction" and promote "synergy". One goal of technology is to build the right mediators. Zipcars are certainly a great mediator.

A more technical view of these ideas can be read here:
Gershenson, C. (2007). Design and Control of Self-organizing Systems. CopIt ArXives, Mexico. TS0002EN.
http://tinyurl.com/DCSOS2007