What is Scarce?

December 16, 2013

To put the question in the bluntest possible way, let’s say that machine intelligence helps us make a lot more things more cheaply, as indeed it is doing. Where will most of the benefits go? In accord with economic reasoning, they will go to that which is scarce.

In today’s global economy here is what is scarce:

1. Quality land and natural resources

2. Intellectual property, or good ideas about what should be produced.

3. Quality labor with unique skills

Here is what is not scarce these days:

1. Unskilled labor, as more countries join the global economy

2. Money in the bank or held in government securities, which you can think of as simple capital, not attached to any special ownership rights (we know there is a lot of it because it has been earning zero or negative real rates of return)

Tyler Cowen, Average is Over

This is now framed and on my wall.

Ryan Holiday

I'm a strategist for bestselling authors and billion dollar brands like American Apparel, Tucker Max and Robert Greene. My work has been used as case studies by Twitter, YouTube and Google and has been written about in AdAge, the New York Times, Gawker and Fast Company.

14 responses to What is Scarce?

  1. Interesting starting point. I would reframe the first two scarcities as:

    1. Luxury goods – things that only a few people can have, with the prices set by what those few are willing to pay.

    2. Design, or everyday luxury – it makes our lives better but it’s not limited to a few people.

    I’m not sure what to make of the third. Maybe it’s just people who can support the first 2? Overall this view would make sense. For our basic needs most of us are likely to have too much rather than too little, so the next area of improvement is a more refined life. And for some, more exclusive experiences.

    Even though it may have taken a long time to get to this point that doesn’t mean it won’t change over the next few decades. The demand for unskilled labor and capital in particular seems to be cyclical, maybe with a light downward trend.

  2. Good ideas aren’t scarce. Amazing execution of good ideas is scarce.

    #3 can lead to amazing execution, but great talent can still produce mediocre products.

    However, great management and leadership can produce great products from mediocre talent. It’s a bit like a modernized project management triangle.

  3. I don’t really understand how you’re reframing quality land/natural resources and intellectual property into luxury goods and design. That doesn’t make any sense. If anything, the latter two are simply products of good ideas.

  4. To me the more obvious Scarcities are:
    1. Peace – People are still killing each other at a mad rate in many places around the world.
    2 Tolerance ( sort of a corollary of 1.) Idiotic ideas in the name of religion causing conflicts of all kinds.
    3. The necessities of life for so many who don’t have them (food, clothing, a place to live).

    • Actually Jerry, there’s convincing evidence that we are currently living in on of the most peaceful times in the history of the world. Your chances of dying from violence are now lower than they have ever been: http://www.ted.com/talks/steven_pinker_on_the_myth_of_violence.html

      • You are forgetting the violence that is now embedded in systems like government policies, which is much less visible because it is usually only threatened, not executed.

        The fact that I don’t have voluntary euthanasia rights has increased my depression and made me feel like an imprisoned slave who can look forward to an extra agonizing death against his will. Yet no one has laid a hand on me in terms of actual violence.

        The violence is intrinsic to the system. It is officialized, moralized, politicized, diffused, but it is still severe violence, and it causes massive harm to billions of non-consenting victims.

  5. Jerry’s right, all those intolerant religious folks are really terrible, stupid, idiotic dirt bags who need to be eliminated so tolerant atheists like us can be nice to each other. Why should we put up with people who can see the self-evident idiocy of their own ideas! Go, Jerry!

    • There is an asymmetry though. Religious people tell non-religious people what to do and not to do, but usually not the other way around. Just think voluntary euthanasia rights, gay marriage, abortion and and and….

      Religion is also a major factor in wars and tribalist violence. Without religious idiocy, committing to a tolerant and peaceful meta-framework for a pluralistic society would be much easier.

  6. Lifespan is scarce. Just any anyone 60 yrs old and above. This is the elephant in the room.

  7. Human inspiration and engagement, leading to inspired services that engage our whole selves–body and mind, sure, but heart and soul, too.

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