On Scarcity

Economics heretofore [1] has been based upon scarcity. I mean this is a pretty plain idea. We pay for computer hardware, because there's presumably more pieces of computer hardware than there are people who want it. And the Apple Store/NewEgg takes our money because money isn't limitless. Supply and demand. Pretty basic.

So this doesn't hold true on the internet, and of software in general. How come you ask? But you just paid thousands of dollars for the latest Adobe package? Lets take a little trip together, shall we?

Unlike physical things--which are often scarce--or data stored on magnetic media (eg. VHS, Beta, 3/4" or Umatic, [2] Cassette)--which degrade over time and over generation successive copies--data on the internet doesn't cost anything to copy and transfer, and all copies are pristine.

I mean it's true that internet connections cost something, but the costs are fixed, and generally not related to load. The cost to your ISP when you transfer 6 gb a month is just about the same as the cost if you transfer 12 gb. And storage costs something, its true, but it's incredibly remarkable the speed at which this is decreasing. So computing has some scarcity that's true, but the cost of computing is fixed relative to the amount of data you you consume/copy, assuming that your data collection never outgrows available storage. Which it might, in which case, there's some additional cost there, but only if you're archiving data.

And yet the economy of the internet is dependent upon us paying, in some way, for data. iTunes is all about paying for data, the DRM imposes a false scarcity, shareware/demo software imposes scarcity, websites that distribute content on a subscription model (largely) impose false scarcity on the market.

Which is fine, on some level. I mean on the larger level it sucks, because there are people who who give good money (and time, etc) for what amounts to elaborate fiction. But if we abstract things a bit, we're simply compensating artists for their time in exchange for music, or programers for their software. But if that's the case, aren't there better, more straightforward ways of doing this? Ways that don't commoditize non-commodities?

The larger point is, I guess, if we're trying to make a living in a world that's halfway between a traditional and a post-scarcity economy, there pretty much has to be a better solution than to pretend that post-scarcity isn't "real." I mean, it certainly couldn't hurt. Here's one idea:

Everyone, as part of their internet service pays some fixed quantity of money every month, and as they amble on through digital life, they give tips to various content producers, and at the end of the month, the ISP (or whoever) divides up the amount and distributes the money.

On the one hand dividing everyone's 10-20 bucks a month, seems like it would add to not a lot very fast, but, the internet is pretty big, and there are a lot of people around so it'd add up. Also, if this could be implemented to effectively legalize bit torrent across the board and people stopped paying for cable TV hook ups in-favor or big internet pipes? That's a lot of money. And it would add up.

There are lots of problems with implementation (How do you get the cable companies to let go? How do you process the money, how do you make the system interoperable? etc.) But it's different. It addresses the need, and it benefits creators and consumers, and it attempts to democratize the payment process while still rewarding quality content.

Thoughts? Ideas? Go for it!

Onward and Upward!