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It also made me think about post-scarcity economics. http://en.m.wikipedia.org/wiki/Post_scarcity http://en.m.wikipedia.org/wiki/Post_scarcity

gaius 15y ago
We are a looooonng way from post-scarcity. In the same way that home printing didn't kill books.
- lukifer 15y ago
  I'd say it varies widely based on the resource in question. Open-source software and wiki data have a nearly perfect lack of scarcity; bandwidth and server disk space are just slightly scarce; other resources like oil (or the ultimate scarcity, human time) follow conventional rules of economics.
- literalusername 15y ago
  Post-scarcity has already arrived for every resource that has a marginal cost of production equal to zero. That includes every digital product. That's not to say we're living in the age of post-scarcity. Most of our resources are still limited, and you're right that non-digital resources are likely to retain scarcity for a very long time. Furthermore, post-scarcity will never arrive for inherently limited resources, such as time. But PG's essay addresses industries selling digital products, and within that realm, post-scarcity has indeed arrived.
  - davidw 15y ago
    > marginal cost of production equal to zero I think it would be more correct to write "reproduction" or "distribution", because it costs a lot to produce a movie or a book or a big, complex piece of software.
    - literalusername 15y ago
      Marginal cost does not include initial investment. https://en.wikipedia.org/wiki/Marginal_cost https://en.wikipedia.org/wiki/Marginal_cost
      - rictic 15y ago
        It seems like you're miscommunicating over where to delineate the product. You are right that the marginal cost of the Nth copy of a particular film is about zero. The marginal cost of making the Nth film is still decidedly nonzero.
        davidw 15y ago
        Right and in any event it's ridiculous to talk about a "post scarcity" world when there is oodles of scarcity surrounding the creation of information goods like movies.
    - galadriel 15y ago
      That's exactly what Marginal cost is, the change in total cost to produce one more copy of the same product.
  - anamax 15y ago
    > Post-scarcity has already arrived for every resource that has a marginal cost of production equal to zero. That includes every digital product. I must be doing it wrong because I don't know how to copy bits for free, let alone distribute them for free. I'm in good company - neither Amazon nor Apple knows how to do those things for free either. (The fact that their current costs may be dominated by billing doesn't imply that billing is their only cost.)
    - literalusername 15y ago
      Sure, if the cost of infrastructure is taken to be a result of the requirement to replicate data. But given an infrastructure that is maintained irrespective of its use for data replication, replication is free. The former case may describe Amazon and Apple, but the later case describes pirates.
      - anamax 15y ago
        Using that infrastructure has incremental costs. Plus, building it to accomodate data replication in addition to other things costs more than just building it to accommodate those other things.
    - wtallis 15y ago
      Amazon and Apple aren't in the business of distributing digital goods with low marginal cost. They are in the business of distributing digital goods with the highest marginal price possible, so they have little incentive to reduce their marginal costs as much as possible. (Even so, their profit margins are very high.) When you stop trying to impose artificial scarcity and simply try to distribute with the lowest possible marginal cost (things like Project Gutenberg or Bittorrent), you find that even if the marginal cost is not exactly zero, it is close enough that the marginal cost does not affect the pricing across any real-world range of quantities. Thus, the traditional supply/demand model no longer applies.
      - anamax 15y ago
        > They are in the business of distributing digital goods with the highest marginal price possible, so they have little incentive to reduce their marginal costs as much as possible. Oh really? You think that Apple and Amazon don't care about their bandwidth charges? That will be news to the folks from whom they buy bandwidth. You also think that they don't care about the cost of the servers to send that content out? > you find that even if the marginal cost is not exactly zero, it is close enough that the marginal cost does not affect the pricing across any real-world range of quantities. There's your problem - you think that when the cost is minimal, supply/demand doesn't apply. Your "economics" is several decades out of date. Lots of things aren't priced by cost, but by value. Supply/demand works just fine for them. > When you stop trying to impose artificial scarcity and simply try to distribute with the lowest possible marginal cost (things like Project Gutenberg or Bittorrent) Ah, you think that bittorrent is cost-efficient. It isn't. It's a way to spread infrastructure costs across a lot of people. In other words, you're confusing cost and price again.
- tomjen3 15y ago
  Home printing may not have killed books, but ebooks have made a significant cut in normal book purchases. And you can get more books than you will ever have the time for of project Gutenberg (and some of them can be read on your kindle).

gaius 15y ago

We are a looooonng way from post-scarcity. In the same way that home printing didn't kill books.

lukifer 15y ago
I'd say it varies widely based on the resource in question. Open-source software and wiki data have a nearly perfect lack of scarcity; bandwidth and server disk space are just slightly scarce; other resources like oil (or the ultimate scarcity, human time) follow conventional rules of economics.
literalusername 15y ago
Post-scarcity has already arrived for every resource that has a marginal cost of production equal to zero. That includes every digital product. That's not to say we're living in the age of post-scarcity. Most of our resources are still limited, and you're right that non-digital resources are likely to retain scarcity for a very long time. Furthermore, post-scarcity will never arrive for inherently limited resources, such as time. But PG's essay addresses industries selling digital products, and within that realm, post-scarcity has indeed arrived.
- davidw 15y ago
  > marginal cost of production equal to zero I think it would be more correct to write "reproduction" or "distribution", because it costs a lot to produce a movie or a book or a big, complex piece of software.
  - literalusername 15y ago
    Marginal cost does not include initial investment. https://en.wikipedia.org/wiki/Marginal_cost https://en.wikipedia.org/wiki/Marginal_cost
    - rictic 15y ago
      It seems like you're miscommunicating over where to delineate the product. You are right that the marginal cost of the Nth copy of a particular film is about zero. The marginal cost of making the Nth film is still decidedly nonzero.
      - davidw 15y ago
        Right and in any event it's ridiculous to talk about a "post scarcity" world when there is oodles of scarcity surrounding the creation of information goods like movies.
  - galadriel 15y ago
    That's exactly what Marginal cost is, the change in total cost to produce one more copy of the same product.
- anamax 15y ago
  > Post-scarcity has already arrived for every resource that has a marginal cost of production equal to zero. That includes every digital product. I must be doing it wrong because I don't know how to copy bits for free, let alone distribute them for free. I'm in good company - neither Amazon nor Apple knows how to do those things for free either. (The fact that their current costs may be dominated by billing doesn't imply that billing is their only cost.)
  - literalusername 15y ago
    Sure, if the cost of infrastructure is taken to be a result of the requirement to replicate data. But given an infrastructure that is maintained irrespective of its use for data replication, replication is free. The former case may describe Amazon and Apple, but the later case describes pirates.
    - anamax 15y ago
      Using that infrastructure has incremental costs. Plus, building it to accomodate data replication in addition to other things costs more than just building it to accommodate those other things.
  - wtallis 15y ago
    Amazon and Apple aren't in the business of distributing digital goods with low marginal cost. They are in the business of distributing digital goods with the highest marginal price possible, so they have little incentive to reduce their marginal costs as much as possible. (Even so, their profit margins are very high.) When you stop trying to impose artificial scarcity and simply try to distribute with the lowest possible marginal cost (things like Project Gutenberg or Bittorrent), you find that even if the marginal cost is not exactly zero, it is close enough that the marginal cost does not affect the pricing across any real-world range of quantities. Thus, the traditional supply/demand model no longer applies.
    - anamax 15y ago
      > They are in the business of distributing digital goods with the highest marginal price possible, so they have little incentive to reduce their marginal costs as much as possible. Oh really? You think that Apple and Amazon don't care about their bandwidth charges? That will be news to the folks from whom they buy bandwidth. You also think that they don't care about the cost of the servers to send that content out? > you find that even if the marginal cost is not exactly zero, it is close enough that the marginal cost does not affect the pricing across any real-world range of quantities. There's your problem - you think that when the cost is minimal, supply/demand doesn't apply. Your "economics" is several decades out of date. Lots of things aren't priced by cost, but by value. Supply/demand works just fine for them. > When you stop trying to impose artificial scarcity and simply try to distribute with the lowest possible marginal cost (things like Project Gutenberg or Bittorrent) Ah, you think that bittorrent is cost-efficient. It isn't. It's a way to spread infrastructure costs across a lot of people. In other words, you're confusing cost and price again.
tomjen3 15y ago
Home printing may not have killed books, but ebooks have made a significant cut in normal book purchases. And you can get more books than you will ever have the time for of project Gutenberg (and some of them can be read on your kindle).