When laws of supply and demand are replaced with scarcity and abundance

Science fiction has long dreamed of a post-scarcity society, and it’s become quite common to hear discussions about transitioning from a world of scarcity to a world of abundance. But, for all the good intentions and creative thinking, our limitations, both human and material, will be an ever-present force in society and a very necessary one. The trick is understanding which aspects of society will flow towards abundance and which ones will not.

Abundance as described by James Heskett, a professor emeritus at Harvard writing for Working Knowledge:  “It is a world where everything digital is available at all times. And because of the very low cost of maintaining and distributing inventory, everything is likely to remain available forever. … It is a world of non-zero-sum thinking.”

The basic assumption – that all things scarce can somehow be magically transformed into all things abundant – is nonsense. Nothing could be further from the truth. Unless the laws of physics are rewritten, certain things will never reach the level of what is called abundant.  That said, abundance is now happening in some very unusual ways.

Abundance theory falls apart when it contends with physical limitations. You can’t transform an SUV to digits and have one spit out of your printer, not yet anyway, and not one that is suitable for its intended purpose. Another example: When I drive to meetings in Denver, I sometimes choose the toll road because there are a limited number of commuting options for getting there. Should roads be more abundant? Yes, telecommuting options may void our need to be physically present. But if we need to personally travel across town, we are a long ways from reaching the point of abundant commuting options – at least, not until we create inexpensive flying cars (at which time toll roads will disappear).

A better way of discussing the changes upon us is to think in terms of which products and industries are about to lose their pricing advantage because of their inability to control the supply chain – not as sexy, but perhaps more useful for analysis.

Economies today are based on scarcity. It is necessary, then, to understand which products, services, and industries are about to lose their competitive pricing edge.

Historical View of Scarcity

To understand the scarcity-abundance phenomena, it helps to look at historically scarce products that somehow lost their price point advantage.

  • Salt:  Many battles were fought throughout history over what was considered to be the most valuable of spices, salt. One of the more recent examples is the Salt Satyagraha, a Gandhi-led non-violent protest against the British salt tax in colonial India, which began with the Salt March to Dandi on March 12, 1930. Hundreds of protesters were beaten in this battlefield directed toward breaking down the walls of scarcity. Today, salt is an abundant product, available everywhere for mere pennies.
  • Pearls:  Because they were difficult to find, and divers had to spend countless hours under water to find one, ancient societies dubbed pearls to be some of the rarest of stones. This rarity also made it one of the most expensive pieces of jewelry. But that all changed in 1916 when Japanese researchers Mise and Nishikawa patented their now famous process for making cultured pearls.
  • Telephone Service:  An industry that was built on the scarce one-wire-to-the-home option has been replaced with an abundance of wireless and VOIP telephony options.
  • Classified Ads:  A business invented by newspaper publishers became a cash-rich industry and the lifeblood for newspapers. Print advertising had the rug pulled out from under it when Craig Newmark created the free self-organizing Craig’s List

The scarcity-abundance shift only happened on rare occasions up until the advent of Internet and electronic commerce. With over-night successes occurring with some regularity, the World Wide Web has become a platform for tectonic plate movements that tear down as well as build up. Well-managed corporate giants now have teams scouring the entrepreneurial landscape to see where the next disruption may occur.

The Next Targets of the Abundance Tidal Waves

Some of the targets are easy to spot, while others will be eviscerated through hard-to-quantify indirect means.

The best way to spot possible targets is to evaluate the size of an industry economically, and the level of discontent among customers. In the past, I’ve used what I call a “customer abuse index” to determine which industries have the least promising – or maybe the most abusive – relationships with their customers. A high customer abuse index indicates a company or industry begging to have its legs cut out from under it. Companies with labyrinthine phone trees immediately come to mind.

Another piece of the equation: Government will have far greater difficulty protecting industries the way it has in the past. As we continue to shift to a hyper-competitive global marketplace, the laws of an individual country will offer relatively poor security for staving off disruptive change.

A few of the major industries on the verge of revolution/disruption:

  1. Education: The basic components of the education system haven’t changed in the past century. As discontent and costs grow, the declining student performance scores in global competition make this a prime area for upheaval. Estimated time frame – five years.
  2. Power:  Energy today is generated by burning things and sending the resulting power through wires. Disruptions in the future will come through non-destructive forms of energy creation, and power transmitted both wirelessly and abundantly. Estimated time frame – 15 years.
  3. Credit Cards:  What’s in your wallet is about to come out of the Middle Ages. With little accountability for the fees and interest charged and consumer dissatisfaction verging on violence, the credit card industry is primed for revolt. Existing laws may have to change, but the penalty-here, fee-there days of cannibalizing their consumers will come to an end. Estimated time frame – five years.
  4. Real Estate:  The recent chink delivered to the armor can barely be heard over the sickening thud of an industry that has fallen flat on its face. Real estate had a lock on the marketplace called the Multiple Listing Service until a recent antitrust lawsuit. The outlook is not a good a one. Expensive services such as appraisals, inspections, title and mortgage insurance face unusual forms of competition. Estimated time frame – five years.
  5. Book Publishing:  When book readers, such as the Amazon Kindle, drop in price to $20 and begin to appear ubiquitously across the landscape, the economics will drop out of the publishing world. Estimated time frame – 10 years.
  6. Cable Television:  Equipped with the most archaic menu systems possible, our entertainment systems today are insanely complicated to operate. Look for giant screen computer systems to replace cable boxes. Touch-screen and laser remotes will emerge along with a host of other interface options. Estimated time frame – five years.

The Last Bastion of Scarcity

So the question remains: What areas of life will be able to maintain their pricing integrity and remain “abundance proof?”

In producing this list, it became apparent that most of the scarcity staples are staples for the reason humans have built-in limitations. Understanding these limitations is key to understanding the marketplace of tomorrow.

  • Time:  Time is a perfect example. We run up against some hard barriers when it comes to increasing the available amount of time we have in a single day. Yes, we can make ourselves far more efficient and squeeze in a few more accomplishments, and maybe someday we’ll be able to clone ourselves, but we still have temporal barriers we cannot ignore.
  • Natural Resources:  If we are making products out of steel or aluminum, we once again run into serious limitations. Mineral extraction and refinement processes can be significantly improved. With the ability to project life-like images into our surroundings, we can eliminate the need for many physical objects, but we still exist in a world where there are hard limits on the availability of certain natural resources.
  • Intellectual Bandwidth:  We are bound by the limits of the human brain. It may be possible to conceive of technologies that can bridge this limit, but it still seems to be a safe bet to say that minds will be immune to abundance.
  • Talent:  We all may have our own talents, but the truly gifted are still a rare commodity. Talented people will have a way of creating their own economies.
  • Fame:  Because of limits in intellectual bandwidth, we have limited attention to pay to the world around us. There are natural limits to the number of people who can be famous at any given time.
  • Novelty:  The concept of novelty is by definition, rare. While products may lose their initial novelty quickly, it seems safe to say that there will always be a market for the rare and unusual commodities and service.
  • Motivation:  Similar to fame, we can only care about so many things at once. Our motivations are finite and necessarily limited.
  • Personal Health:  One of our most precious commodities is our health. While it may be possible to commoditize certain aspects of our health, but there won’t be abundance for everything healthy.
  • Experiences:  Yes, there may be an abundance of experience options for us to consider, but our limitations on time and attention get in the way. We will be willing to pay a premium for great experiences, like brief ventures into space.
  • Money:  Trading and exchange can become abundant, and money systems have long been an impediment to some of the needed change in the world. But money itself ceases to function and have value without scarcity. As one of society’s greatest tools for motivating people and driving change, our money systems today are solidly locked in the scarcity camp.

The list above is certainly not exhaustive, but it is designed to help frame the thinking around which businesses will transition in the future. Many of these changes will come quickly, disrupting the lives of countless millions.

At the same time, industries producing abundance will benefit exponentially as cost of living indexes plummet.

The scarcity-abundance shift does not ignore the laws of supply and demand – it somehow changes them. Perhaps new laws are in order.

By Futurist Thomas Frey

12 Responses to “The Last Bastion of Scarcity”

Comments List

  1. <a href='' rel='external nofollow' class='url'>Monica Savage</a>

    I believe you are right. There is so much of the world as we know it that this shift will change. Since I am attending an e-Learning conference right now, add that to your list: e-Learning will experience the scarcity/abundance shift, I believe in the next couple of years.
  2. <a href='' rel='external nofollow' class='url'>Jay O'Connell</a>

    Hi, I wrote science fiction professionally for five years (published about 20 stories) and I was fascinated by what we were calling 'post-scarcity' culture. I had a bunch of radical libertarians (the Extropians) eventually drive me out of their community because I posited a world in which free-market type interaction was replaced with some sort of aboriginal, hunter-gather social interaction; shorn of a mass popular culture and the need for a single unified cultural experience, groups of nomadic, genetically altered humans roam an anarchic landscape, living off of bootleg freeware of various sorts. I was called a socialist. Perry Metzger, a wizened napoleonic figure, finally created the term 'jupiter brain' to explain why post-scarcity was a foolish construct. He would want to have a brain the size of jupiter and an unending vicious marketplace which killed off socialist loafers like me would make sure that there would be no goofy hippy green men around wasting valuable carbon atoms which Perry would need to construct his infinitely large vast nanodiamond brain. This is akin to the radical free market notion that killing off the American Indians was a good and necessary thing because they weren't actually using the land. They weren't mixing their labor with the land to produce excess trade goods and as such, had to be exterminated like vermin. Currently, I'm working in the post scarcity, how do you compete with Craigslist world. We have an alternative, SPAM free site, a kind of walled garden which we hope to expand into a kind of MLS for rentals in the Boston Metro region. The story is rich and complicated, and I've had conversations with Craig Newmark about his Terms of Use, our challenge to the massive redundancy and fraud created by post scarcity listing services, and Web 3.0, the next big thing, which I think my group, in it's small way, is working on. You can check out the site by typing the word 'real' and the words boston apartments and seeing what you get with google. Our sites are the first two hits. If you don't search for REAL, you get black hat SEO spam. That's our new meme. Great article. I have more thoughts. We should talk sometime. You rock. Jay O'Connell realbostonapartments
  3. <a href='' rel='external nofollow' class='url'>The Last Bastion of Scarcity and the Future of the Boston Metro Rental Market</a>

    [...] in lately, and Google alerts finds  interesting things for me. This was a recent catch, from Thomas Frey's blog. (He's a futurist with an impressive client list. This as opposed to the type of futurist we [...]
  4. <a href='' rel='external nofollow' class='url'>Ruth Howard</a>

    Hi Thomas, I'm wondering about the notion of work itself, if as you say (making huge sense to me)education/individuals/teams will cater to individuals/masses by provision of course ware then it follows (if only in my mind) that individuals will outsource themselves, each person will need to provide service. It will become a service economy, what have you got to offer?-,freely,paid,time,skills,intellect,emotion,other.And it will be in best interest to follow your interests because you have best chance of serving with both heart and mind aligned. This will become the potent measure of talent/collaboration/outsourcing, because those leading will have those integrated qualities and seek sync with complimentary others? Plus everything we do/act out will be recorded in various ways and reveal our preoccupations who we network etc so living authentically will be critical? Just where my mind goes in response to initial contact with your ideas.Thanks for the nudge!
  5. Dan McGuire

    Good thoughts all, but your point has not been honed clearly enough, yet. Last means last, so pick one of the things in the list and then we can argue (in the productive way) over whether that's the one or not.
    • admin

      Thanks for the comment. I had considered using the title "Last Bastions of Scarcity" with bastions being plural, but decided against it. Perhaps I needed a better way to describe this, but I'm thinking in terms of how scarcity is being backed into it own little stronghold with the forces of abundance working its way ever closer. And the notion of a bastion being the final demarcation where scarcity can be pusher no further.
  6. <a href='' rel='external nofollow' class='url'>Bill Farren</a>

    Thanks for this post. I like your "customer abuse index"--especially as it pertains to education (my field). If only fewer adults believed the idea that school is not meant to be fun or that learning is "work", then maybe they'd respond to the CAI and demand better education. You might want to watch Chris Anderson's PopTech talk, if you haven't already: "What happens when material things become free? Long Tail author and Wired magazine editor Chris Anderson examines new models of wealth distribution and claims we’re moving from economies of scarcity to an age of abundance." I posted some thoughts on education in a world of abundance here:
  7. Wayne Thomas

    Interesting article. Technology is accelerating and many don't really understand the implications of that. Super computers have recently bridged the once fantasy, Petaflop level. It has taken mankind all the time we have been on the planet until now to reach this milestone. But now consider... Within 10 years we should see Exaflop performance, or machines a thousand x faster. Beyond this, Zettaflops, (a MILLION x Petaflop performance) by 2028, Yottaflops, (a BILLION x Petaflop performance)around 2036, and Xeraflops (a TRILLION x Petaflop performance) maybe in the 2043 timeframe. Less than 35 years away... And processing power will continue to grow exponentially beyond that point... Most don't appreciate what titanic positive changes this will bring to us in our daily lives, in everything from materials technology to life extension.
  8. Daniel Stern

    I think Wayne's focus on processing power is an interesting addition, but somewhat misguided. One "invention" that will supersede in importance (but be augmented by it) extreme processing power, is artificial intelligence. Artificial intelligence (in the Jeff Hawkins sense of the word, i.e not physically anthropromorphized machines but rather computers that can think inductively through analogy. see memory-prediction theory of intelligence) will render abundant Last Bastion #3 'Intellectual Bandwidth.' This should happen within our lifetime.
  9. Encon

    Thanks! You've given me a terrific new perspective on this confusing issue. Is it possible that everything becomes abundant or do we continue to find new ways to make things scarce?
  10. Barton Petersheim

    This article offers a refreshing perspective on the all-important topic of scarcity. Too many people limit their thinking, resigning themselves to a world that is just "more of the same." But things are changing, and changing quickly. Thanks for making me think.

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