Artificial Material Scarcity
- 1 Introduction
- 2 Examples of Artificial Scarcity
- 3 First Principles
- 4 Practical Examples
- 5 Theoretical Case
- 6 Discussion
- 7 Various Examples of a Scarcity Social Contract
- 8 Other Examples
- 9 Solutions
Artificial scarcity can apply to Non-Material goods - such as money, services, education, knowledge, etc - and to material goods. Almost all business models known to humankind, and in particular those of investment banks or VCs, rely on some form of artificial scarcity, which is perceived to create "competitive advantage". This is opposite of the notion of OSE's Collaborative Advantage that is inherent in the OSE Mission.
Non-material scarcity is manifest in lack of open access journals, the patent system, proprietary information, trade secrets, the Prussian education system, and a boatload of other design features of modern civilization.
Artificial material scarcity - colloquially spoken as Artificial Scarcity in the GVCS TED Talk - is a condition where in the absolute abundance of material resources - namely: rocks, plants, water, sunlight, air - from which all wealth is created - the distribution of wealth is poor - causing poverty, hunger, resource conflicts, corruption, social ills, psychological disintegration, loss of meaning, political divisions, etc.
Artificial scarcity involves high efficiency of production and low efficiency of distributing the resulting wealth. Great abundance is enjoyed by the few, and deprivation is suffered by most. This is confirmed by standard data on the distribution of wealth in society, where it is generally accepted as true that a decreasing fraction of the population continues to reap an increasing portion of income. See Gini Coefficient. (On the positive note - the Gini Coefficient appears to be dropping as a result of the information age.)
This is the status quo which may be addressed via the Open Source Economy.
See our early Practical Post-Scarcity Video from 2012:
Examples of Artificial Scarcity
- Patent system - the assumption of the patent system is that sharing an idea diminishes one's economic return. This is scarcity thinking in its purest form.
- Iron Triangle - the very notion that a product can't be optimized in all respects is a pure example of scarcity, cartesian, non-exponential thinking.
There is an abundance of energy, speaking from first principles. The earth's surface receives 10,000x more power from the sun than we use today - even in its wasteful resource use patterns of Competitive Waste.
See also Kardashev Scale.
- The Iron Triangle is a pure case of scarcity thinking, where skill is rare and overpricing is common due to the scarcity of raw skill. The solution is a wholesale raising of skill and knowhow via open source, rapid learning. The result is good-fast-cheap, delivering formerly impossible utopia. The Seed Eco-Home, which is 100x better than the competition, is proving and pricing exactly this point. See December Build script for the numbers behind the 100x assessment.
Evolution from Salesmen to Producers to Environmentalists to Community Stewards
In the case of the current economy, dominated by marketing and salespeople, we could predict a transition to open source product development where consumerism and commercialism are replaced by a paradigm that is more benign to true human needs. The evolution could involve the reduction of profit from resale - when an individual captures only a small fraction of value. This is not Productive Value, but Parasitic Value - where resellers capture a small part of the productive value of somebody else.
Naturally, this scenario leads to minimum profits - and the tendency to maximize the number of sales to make a living. This contributes to a negative feedback of advertising and consumerism to push excess goods onto the population. This does not help the world because it is a runaway condition.
On the other hand, if a person is a producer, and the entry barriers to production are lowered via open source design and equipment - then the former resellers could become producers. They gain skills, and capture the full value of production. The transition to producerism appears inevitable if more open information and lower cost tools become available. The limiting factor is the producers' willingness to learn - as this will determine the limits of complexity created - and thus limits of value capture.
However, the producer scenario also leads to minimum profit as more people engage in this. So the next step is the producer becoming their own materials supplier. This is a step towards environmental consciousness - as materials come from nature and stewarding production implies stewarding natural resources - which are the feedstocks of production.
The producer who also produces their feedstocks is able to capture the full worth of value added to raw resources. Information and energy is added to raw resources to turn them into valuable products. By definition in the long term - producers cannot destroy their feedstocks - ie, they cannot destroy the environment.
In this ecological stewardship case, we still need to address overproduction - which currently cancers society with continued ecocide and genocide in the broad sense. From the OSE perspective, balancing natural life support systems with growth implies a return to local economies. Local economies involve an immediate feedback loop between production and consumption - and thus tend towards a stable condition between the extraction, use, and regeneration of natural resources. While producing human prosperity and cultural/scientific advancement.
Localization does not mean that we cease global trade. That is unrealistic. The North would die in the absence of coffee or durian. Global trade should continue - but not in its current form where market manipulation by third parties (finance capital and Financialization) dominates. Global trade could be relegated to those goods which it was initially designed to address: exotics that cannot be produced locally in a practical way. The case for import substitution is strong when quality of life is considered: when wealth is generated and when it is retained in communities, a higher level of prosperity is accessible to more people.
We should perhaps be importing coffee - but not apples or steel from China - or other goods that can be produced readily at home. Today's global trade should be recognized for what it is: large scale manipulation by third parties, as opposed to more direct beneficiaries. The solution is not protectionism, but elimination of institutions that discourage local production, and creation of institutions that promote circular economies and that promote collaborative design for a transparent and inclusive economy of abundance. Ie, the creation of Free Markets, defined as the true Open Source Economy where Competitive Waste is eliminated, and where institutions do not promote gross imbalances of power.
(relevant notes from the OSE Code of Conduct
We have found that the Product Ecology aspect of OSE's work, along with Collaborative Illiteracy - are the largest blocks to coordinated technical development. Because following a Construction Set Approach that results in integrated product ecologies is much harder than just designing dedicated machines or products - it is common for people to propose dedicated solutions (non-Construction Set Approach, not consistent with product ecologies such as Universal Axis, Universal Rotor, Universal Controller, Power Cube, among the most notable). Dedicated solutions are easier to implement in the short term (1 year), but do not provide as much impact as the trillion-dollar economic potential of an integrated set. Part of this has to do with coordinating large numbers of people. When tech development choices are non-Degenerate, we end up with a fragmented effort in a surplus number of directions. The result would be a technosphere that is hard to manage because of the 'reinventing the wheel' aspect of too many options for doing the same thing.
The choice here goes down to the existential qualities of society. We have a choice. Do we spend excess energy focusing on material existence (products, consumer goods, survival wares) - or do we agree that the pursuit of autonomy, mastery, and purpose is most important? A society that focuses on the latter would need to remove material existence from taking too much of a preoccupation in one's life - as a formula for attaining true freedom. This is indeed trivial to accomplish using today's advanced technology. Thus, there is now a real option for evolving to freedom. This is the viewpoint that OSE takes. OSE is currently (until 2028) focusing on material security (completion of the Global Village Construction Set and related enterprise) - and from 2028 onwards - will be focusing on the transformation of society towards self-determination.
Various Examples of a Scarcity Social Contract
These are various ways in which scarcity thinking dilutes The Art of Possibility, or ways in which common thinking takes us out of the Garden of Eden.
- It takes 20 years to build a reputation, and 5 minutes to ruin it. This assumes that we aren't Giving an A.
- Unbacked money is an example (being fully artificial as in created by a figment of the imagination - artificial 'rules' must likewise be created to control supply
- Cryptocurrency - artificial scarcity is imposed as a core design of the currency itself. This is perhaps the purest example of artificial scarcity.
- Backed currencies - are not artificially scarce. They are as scarce as laws of physics dictate, and physics does not have a notion of scarcity. Thus, resource-bacjed currencies must be definition not be artificially scarce in the first approximation.
- Non-scarcity money is one which is produced by anyone in a distributed way, and the Blockchain can provide the backing of transparency onto the meaning of a given value. Money could be as good as substance - thus by design money should be perishable equivalent to the decay of substances. This could help resolve wealth concentration.