Over the past year, I’ve taken a lot more notice of the structure underlying economics. I’ve observed a number of interesting commentaries on such things in places where one would not necessarily expect to find them. The one which really got me thinking about it was a book called Voyage from Yesteryear.
In this book, the author, James P. Hogan, describes two competing economic systems. I will refer two these two systems and "scarcity economics" and "abundance economics". Scarcity economics attempts to allocate resources that are of limited supply compared to demand. Abundance economics attempts to allocate resources in which there is no shortage compared to demand. Each of these systems would tend to yield a method of thinking which would pervade a society. Thus, scarcity economics would lead to a society whose primary motivation is obtaining scarce resources. Likewise, abunance economics would lead to a society that is not obsessed with acquiring resources.
Mr. Hogan takes these two premises and brings them into sharp relief. In his novel, a colony ship is sent out to a nearby planet to escape from the apparently impending doom of the Earth. Once there, the machines aboard the ship construct the infrastructure necessary for a human society to survive then brings the human colonists into existence through artificial gestation. This structure yields an entry group of humans who have never known the ingrained ways of doing things on Earth and, indeed, have never known the problem of scarcity.
Fast forward a few decades. Rumours of the impending doom of Earth turn out to be premature and a group of humans, whom I will call Terrans for clarity, set off for the colony, bringing all their culture and beliefs with them. They ultimately arrive at the colony and are baffled by what they discover. Apparently nobody is in charge of anything. Everyone simply strolls down to the store and takes what they need. Everyone is so open and apparently honest that the Terrans distrust them.
The resulting, inevitable, clash between the Terran ways and the colonists’ ways ultimately results in the colonists prevailing and most of the Terrans simply adapting and assimilating into the colony. This may be wishful thinking but I would like to think that this would be the result. Of course, the colonial socieity is presented as somewhat utopian while the Terran society is somewhat dystopian but it is presented in such a compelling manner that it causes a person to really think about it.
Since reading Mr. Hogan’s novel, I have been observing my world with a more critical eye toward the economic substrate. Being something of an initiate into the Hacker culture, I have encountered a number of discussions of it. Most of these discussions indicate the Hacker culture is a gift culture, meaning that one gains prestige from sharing. The Art of Unix Programming by Eric Raymond discusses this phenomenon better than I can. You can find a pointer to it at Eric’s web site.
The world at large, however, is, of necessity, largely scarcity driven. Historically, the resources needed for survival have been scarce thus yielding a society where the accumulation of resources is viewed as success and yields prestige. Yet recent modern society has been attempting to apply these scarcity rules to resources that are essentially infinite.
To illustrate what I mean, let me take an example. Consider a book in digital form. For example, Mr. Raymond’s book mentioned above. Eric can make a copy of the book available to me essentially without cost. Now I have a copy of the book. But Eric still has his copy. The same applies to digital music, videos, and so on. The same also applies to ideas. I have an idea on something. I share it with you. Now you can use my idea. Yet your use of the idea does not prevent me from continuing to use the idea. So basically, we have resources that are infinite compared to demand.
Of course, this begs the question of whether the person who had the idea or the person who wrote the book, or the song, should have some compensation. This is where a society based in scarcity has a problem. In order to live, everyone must acquire some amount of scarce resources, regardless of the infinte resources they acquire or share. Yet much of our modern society is involved in the creation of these infinite resources. The current wisdom seems to be that we need to pretend that these infinite resources are finite and apply our current economic system to them. This has met with very limited success. (See the current situations with file sharing and so on.)
Unfortunately, some sort of mass paradigm shift is needed before things will change. Fortunately, as technology advances, the scarcity problem for basic needs should become less. This may finally allow for the paradigm shift that seems to be necessary. I say this because it seems that it is impossible for a gift culture and a selfish culture to meet in the middle, especially when the gift culture requires the selfish culture for its own survival. (There can be no culture at all if everyone starves.)
Bleak as things seem now, we do seem to be on the cusp of a major shift in economics and culture. Here’s hoping that Mr. Hogan’s dream comes true.