Clay Shirky gave a fascinating speech at the NFAIS Annual Conference where he showed how society has difficulty understanding abundance. Our entire economic theory is based around allotting scarce resources – money, natural resources, tangible property. Shirky says: “Abundance breaks more things than scarcity does. Society knows how to react to scarcity.” As a society, we are used to only having a few books, CDs, and DVDs, but now it is possible and even feasible to have tens of thousands of each.
As Michael Masnick adds, abundances has not been an issue for most of history. Now technology is introducing abundance and infinite goods into society and we’re struggling to make sense of it. As Masnick says, “It’s a ‘divide by zero’ sort of problem.”
This is why we’re seeing so many companies trying to force scarcity in order to hide abundance. DRM serves that exact function – to make an infinitely reproducible digital file scarce. mp3 and eBook retailers are simply taking brick-and-mortar mentalities of selling single items into a digital space. Shirky explains how this radical change requires completely new ways of thinking, not just the old system on a new platform.
It’s easy to say “preserve the best of the old and combine it with the best of the new,” but in revolution, the best of the new is incompatible with the best of the old. It’s about doing things a whole new way.
Business models disrupted by abundance (recording industry, newspapers, software and game developers, etc.) need to scrape their old way of thinking. Paywalls for newspapers and more release windows for movies are examples of old businesses trying to force scarcity onto abundance. These systems do not make sense when anyone can easily copy, share, and view every newspaper article or movie with the few clicks of a mouse.
Of course, when more abundance (well, less scarcity) is introduced, businesses eventually find they can make more money because they have more stuff to sell and more people willing pay for it. Shirky had a great example last year showing how the printing press, and small innovations on printing methods, led to more books which, in turn, made literacy more valuable and thus created more readers. Books were then cheaper to make, but with more readers, publishers could make even more money. VHS and home video, a great example of the movie industry trying to stop abundance, rather helped to expand the movie market and make it billions more dollars.
Shirky ably frames one of the major problems facing the next generation – changing our understanding of abundance. What once was scarce is now infinite and that requires a whole new approach to business.