Abundance vs. Scarcity

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Contents

Discussion 1: Objective Aspects

Herman Daly on Abundance vs. Scarcity

A lecture by Hermand Daly sets out the problematic of scarcity vs. abundance, which is key to economic governance.


Lecture Summary by Jing Cao

"A commonwealth is a resource created either by nature, or by aggregate human effort. Natural resources would fall into the first category; knowledge belongs to the second. Sustaining our commonwealths means using with maintenance. We must realize what the maximum amount of a resource we can consume while still maintaining our commonwealths. The problem in the current economy is that nature is treated as a non-scarce resource when it is in fact scarce. Knowledge has the opposite problem, it is treated as scarce when it is in fact non-scarce.

In economics, goods are either rival or non-rival, and excludable or non-excludable.

A rival good is one where if I consume it, that prevents you from consuming it. Clothing, for example, is rival. Sunlight is non-rival since my consumption of it doesn't prevent you from enjoying it.

Rivalness is a physical property.

Excludability is a legal concept. Excludable goods can be made private property, such as a private residence. Non-excludable goods are those not privatized.

  1. Rival, excludable goods are the ones the market was made for... market goods.
  2. Non-rival, non-excludable goods are public goods.
  3. Rival, non-excludable goods give way to the tragedy of the commons. These goods, fishing rights or clean air, are rival, yet because there is no way of making these excludable, each party will try to consume them before another party exhausts the resource, leading to competitive depletion instead of cooperative conservation, which would be in the best interest of all parties.
  4. Non-rival, excludable goods, such as knowledge, result in the tragedy of artificial scarcity. Sustainability is not a problem with the commonwealth of knowledge because knowledge is a non-rival resource. For existing knowledge, since there is zero opportunity cost for its use (my use of a piece of knowledge does not prevent you from using it) its price should be zero. However, there is an expenditure of rival resources for the pursuit of new knowledge. Some pieces of knowledge, such as the discovery of subatomic particles, may come at a high cost. Others, such as Descartes' fathoming of analytical geometry while staring at his ceiling from his bed, may come at no cost. The acquisition of a new piece of knowledge may also be for the delight of discovery.

However conventional wisdom says that without a profit motive, no new knowledge will be created. The production of new knowledge requires extrinsic stimulation and to this end it is made artificially rival through patents and intellectual property rights. However, since new knowledge is created from old knowledge, if old knowledge is made artificially expensive, then the production of new knowledge is hindered. Not all knowledge is equally beneficial to mankind, and the interests of private profit isn't always the best filter. The profit incentive has given us liposuction and Viagra, but no cure to AIDS or malaria. We should drastically cut back on intellectual property rights and rely on public funds and the human drive to learn for the continued production of new knowledge.

Nature, on the other hand, is rival, but treated as non-rival. Rival goods sometimes become non-rival if demand is low, and my consumption does not hinder your consumption. Water used to be such a resource. Some resources, such as timber, are rival generationally, since within a generation there is only a limited supply, but can be non-rival in the long-term if exploited at levels of sustainable yield, that is if only income and not capital is consumed. It is necessary to protect these fundamentally rival goods by making them excludable. The commonwealth of nature needs to be protected by individual or social property rights, not open access.

The market solution to this is the cap-and-trade system. Rival resources such as fishing rights or polluting rights would be capped at an ecologically sustainable level, and then traded on a market. The cap-and-trade system brings up the questions of scale, distribution,and allocation. The decision of where to place the cap on the scale of the use of a resource must be a social and ecological decision. The market assumes a preexisting scale and has no mechanism for setting one. The market also deals very little with distribution, since the market takes ownership as a given."

Comment from Soenke Zehle

"This is key: "Some resources, such as timber, are rival generationally, since within a generation there is only a limited supply, but can be non-rival in the long-term if exploited at levels of sustainable yield, that is if only income and not capital is consumed." This is where all classical economics fails; the whole idea of achieving allocative optima through self-regulating markets is at odds with any thought of futurity, econ theory accommodates this rather awkwardly through fiddling with discount rates for future use. That's also why, imo, ecological economists like Daly (one-time World Bank dissident who was actually much more interesting than Stiglitz, for example) and others like Martinez have turned the problem of inter-generational allocation of resources into a major area of emphasis"

Andre-Jacques Holbecq on Post-1960 Abundance Economics

Towards an Economics of Abundance

André-Jacques Holbecq distinguishes two great economic periods: one marked by scarcity, until 1960, one market by the abundance of economic goods, after that period. This shift forces to rethink all our assumptions and to change our paradigm, which is why he proposes the alternative of the ecosocietal movement.

"Nous pouvons résumer deux périodes de l'évolution de l'environnement économique : Une longue période de pénurie jusqu'en 1960 : la demande est supérieure à l'offre manifestée. On encourage la production qui génère le pouvoir d'achat. Il s’agit de produire plus et il faut « produire PUIS vendre ». La capacité de production est optimisée, les stocks et les délais sont importants. Les prix ont une tendance à la hausse. Après une période de transition, c’est, depuis 1980 le début de l'ère d'abondance dans tous les pays industrialisés. L’offre est supérieure à la demande manifestée ou potentielle. Le marketing et la publicité sont dominant pour susciter une demande non manifestée, la production est instable, le process de fabrication est prioritaire. Il faut « vendre PUIS produire ». Les prix ont une tendance à la baisse, mais la conséquence est une diminution du pouvoir d'achat. Depuis quelques décennies la production mécanisée a explosé. D’une société de pénurie, nous sommes passés à une société d’abondance : celle où les biens de consommation existent en quantités suffisantes pour satisfaire aux besoins de tous. Mais il ne suffit pas que les biens abondent ou surabondent. Il faut, en plus, que les consommateurs les achètent, qu’ils disposent d’un pouvoir d’achat.

Sous un régime de pénurie, le pouvoir d’achat dépend de la production et il est suscité par elle. Sous un régime d’abondance, la production dépend du pouvoir d’achat et elle est suscitée par lui. Le pouvoir d’achat conditionne la prospérité."


Roberto Verzola: Finite demand makes relative abundance possible

A very important contribution to abundance theory by Roberto Verzola:

“It is almost by definition that economists predominantly focus on scarcity, when they define economics as the study of “the most efficient ways to allocate scarce resources to meet infinite human wants”. If, indeed, people had infinite wants, then not even all the resources of this finite world will be enough for a single person.

But I contend that consumer demand is not infinite. There exist physical, physiological, psychological and cultural limits - both actual and potential - to consumption which can keep individual as well as collective needs and wants within finite bounds.

If demand is finite, then satisfying this demand becomes a real possibility, and relative abundance is within reach.

The following three concepts will help show that demand can remain within finite bounds:

Satiation. Economists define satiation as the consumption level which the consumer most prefers.

The closer he is to this level, writes economist Hal Varian, “the better off he is in terms of his own preferences”.This satiation level is also called bliss point. Beyond it, the consumer becomes indifferent towards getting more of the same good or may even prefer to have less of the good. While many economists still cling to the hedonist principle that “more is always preferred to less,” some acknowledge, at least in theory, that a satiation level exists for some, if not most, goods. Varian, in particular, says that most goods have a satiation point and that “you can have too much of nearly anything,” which contradicts the “infinite wants” assertion in most definitions of economics.

Saturation. While satiation may apply more to the psychological attitude of a consumer not wanting more, saturation is more about the physiological or physical incapacity of a person to consume more.

Beyond the saturation point, one’s body will either become incapable or involuntarily reject additional servings of food and drinks. One can only wear so many clothes, or shoes. One can listen to only so many CDs or watch only so many videos. There are only twenty-four hours a day after all.

To reach the brain, a sense stimulus takes around 10-20 milliseconds. To respond in a conscious way, neuro-scientists have found out, the brain takes longer - around 500 milliseconds (half a second).2 This suggests that our brain can only enjoy at most two distinct events every second or about 170,000 every twenty-four hours. For a world with some six billion people, that adds up to maximum of one quad (i.e., quadrillion) consumption events per day. That is a huge number, it is true, but finite nevertheless. Most of us will probably be too saturated long before that point.

However, the concept of saturation as distinct from satiation is missing in consumer theory and most economists still cling to the “infinite wants” idea.

Satisficing. Even before we reach our satiation or saturation levels, we may already reach our “satisficed” level, in which the quantity we have of a particular good or bundle of goods already suffices to satisfy, and beyond which we would only weakly prefer more.

The idea that consumers satisfice rather than optimize when fitting their wants to their budget was first raised by psychologist Herbert Simon, who subsequently won the Economics Nobel Prize in 1978.

Any of these “sat” concepts - certainly all of them, together - are sufficient to argue that individual and likewise aggregate demand have finite bounds.

This justifies the following assertion: some consumers have a satisficing level for some goods. We will leave to future research the debate whether the weak assertion of “some consumers” and “some goods” can, in some contexts or periods, be changed to a stronger assertion of “some consumers for all goods”, “all consumers for some goods”, or even “all consumers for all goods”.

The above assertion leads directly to a formal definition of abundance: when a person can afford enough quantity of a good to reach his/her satisficed level, then the person enjoys a state of abundance for that good.

The concept is not new. Gandhi must have been referring to abundance when he said, “the Earth has enough for everyone’s need”. This definition also allows a good’s state of abundance with respect to one person to be quantified. For instance, if a person’s satisficing level is five pairs of shoes, but s/he can only afford two pairs, then s/he enjoys a state of abundance of 40% (two out of five) with respect to shoes. This makes it simple to relate abundance to its inverse, scarcity: the person needs three pairs more to reach the five-pair satisficed level. Thus s/he faces a scarcity level of 60%.

Economics usually assumes that business firms maximize their profits by producing until their marginal cost (the cost of the next additional unit) equals their marginal revenue (unit price of the good). If, in addition to this behavioral assumption, we also assume diminishing returns or decreasing returns to scale, this will eventually result in increasing marginal costs. Thus business firms will, in theory, reach their satiation level when they reach their maximum profits.

This also means, however, that profitable firms employing technologies with constant or increasing returns to scale will face constant or decreasing marginal costs. They will therefore have no profit maximum and likewise no satiation level. These firms will conform to the theoretical hedonist image for whom “more is always preferred to less”, and whose desire to purchase is limited only by their budget and nothing more. They will also try to keep increasing their scale of operations, as they go after higher and higher profits - making them an engine of globalization. Here is a possible answer, by the way, to what some economists consider a mystery, that “neoclassical theory has no full explanation of why firms grow at all, nor why it is that the typical pattern of the growth rates of firms seems to lead inexorably towards persistently increasing aggregate business concentration.” (http://rverzola.wordpress.com/2009/01/21/finite-demand-makes-relative-abundance-possible/)


Marshall Sahlins on The Original Abundance Economy

Learning from the tribal gift economy

Marshall Sahlins, celebrated anthropologist, was one of the first to challenge the industrial-era myth of progress, showing in his essay on The Original Affluent Society, that tribal economies were in fact operating in a context of abundance.

"When Herskovits was writing his Economic Anthropology (1958), it was common anthropological practice to take the Bushmen or the native Australians as "a classic illustration; of a people whose economic resources are of the scantiest", so precariously situated that "only the most intense application makes survival possible". Today the "classic" understanding can be fairly reversed- on evidence largely from these two groups. A good case can be made that hunters and gatherers work less than we do; and, rather than a continuous travail, the food quest is intermittent, leisure abundant, and there is a greater amount of sleep in the daytime per capita per year than in any other condition of society. The most obvious, immediate conclusion is that the people do not work hard. The average length of time per person per day put into the appropriation and preparation of food was four or five hours. Moreover, they do not work continuously. The subsistence quest was highly intermittent. It would stop for the time being when the people had procured enough for the time being. Which left them plenty of time to spare. Clearly in subsistence as in other sectors of production, we have to do with an economy of specific, limited objectives. By hunting and gathering these objectives are apt to be irregularly accomplished, so the work pattern becomes correspondingly erratic."


Discussion 2: Subjective Aspects

See also our entry on Abundance vs. Scarcity Mentality


Ecologists have to become the force of abundance

From Karim Benammar [1]

"Against the concept of economic abundance, of free trade, open markets, the information super-highway, of everyone getting into stocks, and of the ever-quickening pace of the use of energy, resources, money, and innovation, we find an ecological sense of self-restraint, of self-imposed limits, or of askesis.


But perhaps things are not as they seem. The problem lies not with the use of the concepts of abundance and scarcity, but with the rhetoric of abundance. Indeed, the rhetoric of material abundance is a flawed rhetoric, and one which pushes the ecological camp into a position of arguing for a notion of scarcity. The problem lies with the nature of our present economic system. The problem is no longer the technological system - whereas it used to be technology versus the environment, it has now become economics versus the environment . Scientific research itself has had to become economically viable, and technological development is also subordinate to economic constraints. Although Microsoft gets praised as an example of technological innovation, its success is actually based on the clever and merciless marketing of a technologically inferior product. The bottom line of the free market is where we are all headed to: local governments and governmental agencies, community services and university department as well as companies have to become efficient in the pursuit of high and quick returns on investment.

But the fundamental concept of economics is scarcity: a thing has value in terms of its scarcity: the price of diamonds, gold, oil or coffee are set according to their relative scarcity, real or anticipated. Clean air and clean water were until very recently without any economic value, and it is still very difficult to factor in environmental values into economic calculations (8). This scarcity of goods can be artificially maintained through monopolistic or proprietary practices, or, as in the case of the price of oil in the early nineties, an abundance of cheap goods can be defended in the Gulf by "politics by other means". Another look at our so-called abundant materiality reveals scarcity gone wild. Scarcity lies at the basis of economic theory; it supports the economic structure and fuels the engine of economic growth. Advertising, which ceaselessly encourages economic consumption and therefore economic growth, is a response to a lack, a scarcity within us, a deep-felt psychological need for reassurance through consumption. We are not cool unless we have a new sporty automobile; our fragile egos are strengthened by the latest perfumes and brand-name fashion, and new computer gadgets keep us occupied. There is a constant appeal to needs within us, to the hungry ghosts whose hunger can never be appeased.

Moreover, the globalization of the free-market economy exports this concept and experience of scarcity to the so-called Third World, exports this sense of scarcity to societies and cultures where this sense of scarcity never existed, where there was no concept of consumer economics and ever-increasing growth rates. The lack and need represented by this feeling of scarcity lies in a very human character trait: greed. The booming stock market of the last few years is testimony to the allure of greed; portfolios advertise with annual returns of 40 percent on investment through dubious and risky manipulations, as if an annual return on investment of 40 percent is something any business could produce for any length of time. We are addicted to the continuous growth and expansion of our economies, to the ever-expanding production of consumers goods and the concomitant production of waste.

My central point here is to argue that the rhetoric of material abundance masks the fact that the fundamental concept of economics is in reality scarcity. Conversely, although ecologists, confronted with the rhetoric of material abundance, have been forced to argue for a concept of scarcity and self-restraint, the fundamental concept of the logos of our oikos, of life on earth, is abundance. Abundance, from the Latin ab-unda, from the water, the wave, that which over-flows, is the sense of bounty, of plenty, the sense of living things and life itself which flowers and grows. The luxurious growth of the natural forest, the inherent goodness of air and water, the fullness of the harvest (we say: an abundant year), the bounty of vegetable and animal life are indeed the logos of our oikos.

We can simply put it in terms of "scarcity thinking" versus "abundance thinking". Scarcity thinking is linked to fear and unfulfilled needs; abundance is a sense of plenty in life, a sense of the bounty of living. Perhaps this distinction can be illustrated through the philosophical discussion of the gift (9). In one sense, a gift is an exchange; when it comes down to it, a gift is always exchanged for something else, and complex systems of mutual gift-giving have evolved in different societies and different cultures. But the notion of exchange is already an economic notion, pointing to the beginning of barter and trade: I give something but I get something else for it in return. A gift in this sense of exchange, in this economic sense, partakes not of the notion of abundance but rather of that of scarcity; the gift is in a way conditional upon the expected return on one's investment. Can we then not conceive of the generosity of a gift given without expectation of return, conceive of a true gift rather than an investment?

"Gift" means not only a "present" but also a "talent", as when we speak of a gifted person. There are musical, artistic, even commercial gifts. In this sense, a gift is given without expectation of a return. Our talents are given, even if they have to be developed through practice. Life itself, in a spiritual sense, is a continuous giving without thought of return. The sun is burning itself out without thought or sense of return. Plant life is ceaselessly growing, giving of its bounty without thought or sense of return. And we, as human beings, are gifts without return - what on earth would a return on a life lived to the full be, or an investment return on the unfolding of a life understood and lived as a gift? Life, in its essence, is not a return for something else. It is this sense of gift, generosity and abundance without return which does not fall under the rhetoric of exchange. Moreover, some values do not partake of economic exchange: indeed, for some values, the more one gives, the more receives, and the more one produces in turn. This is the fundamental quality of love in all its various guises, such as trust, or care, or friendship.

Distinct from economics and ecology, eco-ethics is concerned with the ethos of the oikos, with the human sense of the good to be found in the oikos in which we dwell. In other words, a moral sense of what it means to be human beings living on earth. Eco-ethics can provide a study of the value and concepts involved in the rhetoric of abundance, the rhetorical game which puts ecological thinking on the defensive, and can help us distinguish an appeal to the base human instinct of greed from a more spiritual sense of being human. Human beings, as a life-form, are naturally generous, abundant in their being.

The "celebration" of material and economic abundance is nothing but a celebration of human greed, of scarcity, of human pain, human fear, and unchecked human desire. Economic thinking projects these human values onto the oikos, onto the practice of the world stage. A celebration of natural abundance, on the other hand, is a celebration on many levels: on the level of nature, on the level of the world, the oikos; a celebration of the gifts that we are as human beings (we are all the same in that we are all unique). It is a celebration of the chance to develop our talents, to bring them to fruition, to give through the exercise of our gifts, to be of service. A celebration, then, of the spiritual aspirations of human beings; as Marco Olivetti tells us, becoming human is what is calling us, what we are working toward; it is not our starting point (11). Becoming human is something worth striving toward, which is realized through our life.

This reversal in the attribution of the concepts of abundance and scarcity is not merely a correction of a rhetorical ploy. The nature of the argument from the ecological side changes. Even though many of the practical proposals put forward by ecological thinkers for a sustainable world, from energy taxes to alternative manufacturing practices to a rediscovery of the local, would remain the same, there is a crucial shift in emphasis. It is the difference between arguing for enough and for plenty; although these words are close in meaning, their connotations are rather different: "just enough" suggests that we are barely scraping by, that there is a voluntary or an involuntary restriction on our use, consumption, or enjoyment. Plenty, on the other hand, is a synonym of abundance, of bounty: to have plenty is to have "more than enough", "more than one needs", plenty to enjoy, use or consume. Enough and plenty can refer to the same amount of goods or energy usage: the crucial difference is one of attitude, the difference between coming from a position of scarcity or coming from a position of abundance.

The abundance inherent in life and nature is something which human beings can only partially glimpse, experience or comprehend. Our senses have to filter out most levels of experience to get by in the practical world. The overflow of experience cannot be exhaustively mined; there is a constant overflow of energy, of giving, of joy which we cannot all take in at the same time. We are the ones who limit our attention to the world, our attunement to it, and sometimes seek artificial realities.

Another way of defining the concept of natural abundance I wish to develop here comes from examining the concept of excess. To exceed is to go over the limits of the rational, the reasonable, the socially or morally appropriate. Transcending, exceeding, going beyond a certain limit. Our present consumption patterns and the production of waste are excessive in this way: every single person in the industrialized world directly or indirectly produces 15,000 kilos, or approximately 200 times their own weight, in waste products every year (12). Some of these waste products are so toxic to life-forms that they cannot be recycled in any way in the production process. This is the sense of excessive consumption, excessive production, excessive deforestation and depletion of natural resources, excessive remuneration for the world's richest group. But there is also a different sense of excess, the excess of energy in life which is produced beyond what is necessary to maintain the organism and for reproductive purposes, the excess of art, of the erotic, of the carnival (13). The Balinese, like most "traditional" cultures, were not engaged in an economy geared to ever-increasing production. Balinese used to work only a few weeks a year on their island of plenty, to communally plant and harvest the rice. Most of their time was what we now perversely call "free" time, and they gave themselves over to the development of their talents through the gifts of painting, music, dance, and festivals. What are Mendelssohn's "Italian" Symphony or Beethoven's Ode to Joy, Picasso's paintings, Alvin Ailey's choreographies, Walt Whitman and Rumi's poetry but celebrations of excess, of abundance, of bounty? Of the excess energies of being human, the excess energies of being alive?

We respond to the abundant calling of the world and of our fellow human beings, not by restricting our energy, by limiting our responses, by being stingy with our knowledge, abilities, talents, attention, but by celebrating the abundance of life through the excess of our presence.


Our attunement to the ethos of the oikos, to its logos and its nomos, has shown us the concept of abundance in life and human beings and its co-optation by the rhetoric of economic growth. But by externalizing our abundant sense of life in ever-more rapid and brutal consumption and waste production, we are not celebrating a very progressive side of our nature. Rather, we are projecting our deep animal fears of insecurity, fear, lack, want, and scarcity on a global scale through rampant consumerism. We are shutting out most of that which is glorious, joyous and bountiful about us by interpreting it narrowly as economic production, and by this action threatening our own survival. We are busying ourselves with the business of replacing the diversity of plants and species and of our own local cultures and modes of being with a global monoculture of greed tethered to an economic bottom line which is as nonsensical as it is perverse.

In the end, though, it is not a question of "us" versus "them", not a fight to the death between the businessman and the ecologist, between the nomos and the logos of our oikos. The cornucopia envisioned by Simon is also an expression of the unbridled creativity of the human spirit, scientific and technological progress an outcome of our natural curiosity; economic exchange is a cornerstone of the creation of community and communal and cultural identity. Some of the strongest critics of the way corporations destroy our natural and ethical environment, such as Paul Hawken, Joshua Karliner, and David Korten, also agree that it is not business as such which is the problem but rather the widespread externalization of environmental and social costs by companies (14). This externalization of costs means that we are paying far less than the real cost of goods, the balance being made up by exploited workers and the plunder of non-renewable resources. Companies are forced to externalize as many costs as possible by the present financial system in which vast sums of invested money are scouring the globe for the best short-term return possible regardless of consequences.

Despite the rhetoric of material abundance celebrated by our daily dose of advertising, there is in truth nothing abundant about depleting the natural and human resources of a bountiful planet in the fastest way possible. Rather, it is a deep sense of insecurity, fear and scarcity thinking which pushes us to grab as much as possible of the available resources before they run out, and this way of acting, like all pathologies, becomes a self-fulfilling prophecy. It is the scarcity thinking of economic theory which posits a world of limited goods and pleasures for which there is unequal competition. In a truly abundant world, resources are husbanded, there is no waste since all by-products are an integral part of the cycle, and the sense of plenty, of bountiful living are an expression of the knowledge that there is always more for those who come after us, that, as a celebration of the gifts we are as human beings, we always give more than we take, out of human generosity, out of our gratitude for being alive." (http://plethora.nl/KarimBenammar-AbundanceAndScarcity.html)

Source: Abundance and scarcity: concepts and rhetoric in ecology, economics, and eco-ethics. By Karim Benammar. Published in Acta Institutionis Philosophiae et Aestheticae, Vol. 17, 1999, pp. 91-99.

Kim Becher on the subjective element of scarcity

Very interesting contribution by Kim Becher (Belgium), which combines the insights of Rene Girard and Hans Achterhuis, who both stress the subjective elements of scarcity, and how equality actually can increase competition.

From an email contribution, May 10, 2006:

"Hans Achterhuis used Girard’s notion of mimetic desire to highlight the subjective nature of scarcity. In modern economic theory (Adam Smith), scarcity is considered to be an objective fact: the scarcity of resources is inherent to nature. This view has certain moral implications: according to John Locke, Europeans had a moral right to capture the land from the native Americans, as it was their duty to overcome scarcity by hard labour and efficient production. Locke justified the privatisation of common lands on the grounds that it would foster productivity, which serves the common good.

As Marx pointed out, the Industrial Revolution was made possible by the expropriation of English peasants and the closure of the ‘commons’. The commons were a feudal institution precisely aimed at avoiding scarcity: they were common lands shared by peasants and bondmen to secure their subsistence in a sustainable manner. To create the necessary industrial workforce, the commons had to be closed, as willingness to work in a factory was minimal among English peasantry (wage work in factories was equated to prostitution in medieval times).

Modernity is in many ways based on exactly the opposite premises of traditional societies. Modern societies encourage rivalry, equality and individuality among subjects, whereas traditional societies regard them as sources of conflict.

The potential for mimetic crises seems boundless in modern societies. Girard has shown that the risks of envy and mimetic contagion are much higher among equal subjects than between people who belong to distant groups. One of the terrifying experiences of early modernity was that people lost ther traditional places as members of a certain class or group, and were rocked into a boundless space in which they had to compete with masses of equals. This enhanced rivalry and productivity, but provoked also much envy and fear. Being aware of these dangers, theorists like Locke stressed the importance of economic growth as a ways of offering hope and perspective to the working classes. This was also one of the underlying motives of English imperialism. As Cecil Rhodes noted: “If we don’t want a civil war in England, we have to become imperialists". Achterhuis argues that economic growth perhaps seems a better way of diverting a mimetic crisis than sacrifying a scapegoat, but economic growth in the West has created other victims, namely the third world and mother nature. And the more we try to combat scarcity by increasing production and productivity, the more we seem to install it.

In this context, I find the plea for a ‘New Commons’ (open software etc.) and a Universal Wage an interesting aspect of the P2P–movement. It wouldn’t solve everything, but it could be a way of curtailing the realm of scarcity to some extent."


Abundance vs. Scarcity Thinking in the Business Organization

From http://merceronvalue.com/archives/2005/04/abundance_vs_sc_1.html :

"Abundance, in terms of business and personal value, is an attitude of growth (my emphasis). I can grow more rapidly personally by banding with others in a business environment as we, together, grow our proverbial economic pie more rapidly than any of us could otherwise do. In the process, although we may have smaller shares of a collective pie than 100% of our personal pies, those smaller shares will be worth more than our individual, personal pies.


That is the theory and that is why doctors, lawyers, engineers, architects, business appraisers, and members of many other professions come together in professional service firms. Collectively, they can do more and do better than any of them could do alone.


For professional service firms to grow, however, it is necessary that the concept of abundance that brought groups together in the first place be fostered by and among the individual professionals.


In an abundance environment, professionals work together to provide services to clients and customers. They do so by doing what is best for their customers. The rewards for their efforts are then shared on a collective basis.


While no rewards systems are perfect, if the economic pie is growing, the effects of many imperfections are minimized. If business is slower in a given year, everyone recognizes that the pie is smaller and that their shares will also be smaller. The collective emphasis then is on maximizing growth and minimizing the effects of economic adversity.


Scarcity, in terms of business and personal value, reflects an attitude of the absence of growth (my emphasis). Therefore, those with the scarcity mentality tend to think of the pie, whether personal or collective, as fixed, and want to grab the biggest piece possible, even some of the grab takes away from others.


Scarcity is defined as "the quality or state of being scarce; especially : want of provisions for the support of life." And scarce is defined as "deficient in quantity or number compared with the demand: not plentiful or abundant."


There just isn't enough to go around when the scarcity mentality is present, regardless of the success of an organization.


Abundance vs. Scarcity. Problems arise when a professional with a scarcity mentality joins with an abundance-oriented organization. He or she is not focused on the growing pie because of the perception that at any given time, the pie is fixed in size. That attitude fosters emphasis on individual performance and rewards rather than collective performance." (http://merceronvalue.com/archives/2005/04/abundance_vs_sc_1.html)


Abundance vs. Scarcity thinking in nonprofits

Some important questions by Michele Martin at http://michelemartin.typepad.com/thebambooprojectblog/2007/03/killing_the_mis.html


"* Is it possible for an organization to operate in a culture of scarcity and still embrace social media and Web 2.0? My guess is that they can't, except in the most superficial ways. It will either be shift to abundance thinking and really harness the power of social media or stay in scarcity thinking and make ineffective use of social media. I doubt that it's possible to really get collective knowledge and information sharing going when a scarcity mentality says that there isn't enough time, resources, energy, etc. to really make it happen. And I think that there's just a fundamental mismatch there that permeates organizational culture in ways I'm only dimly perceiving right now.


  • Are many of these "perceived" barriers to knowledge sharing a result of scarcity thinking? Are these really barriers? Or is it just that we're missing solutions because we're so focused on "lack-of" thinking?


  • How would our ability to find new solutions to implementing social media and knowledge sharing within organizations be changed if we shifted to an abundance mentality?


  • What are the larger impacts of scarcity thinking on nonprofits? How do we miss possible collective solutions to problems because we're so focused on preserving our own piece of the pie? How do we miss the larger picture of the best ways to address our organization's social cause when we are in scarcity mode? I keep thinking about Begging for Change and about how so many of the problems that Eggers points out are really rooted in scarcity thinking. What's even more bothersome is that this scarcity thinking seems to move down the food chain into how clients are treated, which in many cases further deepens client dependence on nonprofits.


  • What organizational and individual changes would we have to take to move from scarcity thinking to an abundance mentality?"

(http://michelemartin.typepad.com/thebambooprojectblog/2007/03/killing_the_mis.html)


Discussion 3: Challenges to Abundance

Patrick Anderson: Everything is rival

"I would like to discuss what appears to be an almost universal confusion about the nature of reality itself that causes us to think rivalry (finiteness) is limited to certain *TYPES* of things (such as a loaf of bread or a washing machine), while we simultaneously mistakenly believe other things (such as movies and software) have no rivalry whatsoever.

Whether software or bread, everything is infinite (non-rivalrous) in potential, yet realistically constrained (rivalrous) in it's actualization.

A movie is obviously non-rivalrous in that the number of potential copies is infinite, but it is also constrained by the rivalrous space, time, mass and energy required to create, use, modify, copy and share it. It is common to brush off these hosting costs as being 'marginal', but if they are so unimportant, why don't we just start a video hosting site today to replace YouTube? Can we really pretend the warehouses of servers Google pays for are not physical constraints? And it doesn't end there. That movie cannot be utilized unless it is copied, which of course takes time, and consumes physical resources including the twisted-copper, fiber optics or satellite hardware (mass) to transmit it, and a local computer (more mass) and electricity (energy) and even land (space) to house these things.

Similarly, once the mechanical design of a washing machine (the type) has been created by an engineer, what are the potential number of washing machines (instances) that can be produced (how many times may it be copied)? The design is just as infinite in potential (non-rivalrous) as the movie, yet is also constrained by space, time, mass and energy again.

Wheat is actually just a design (DNA or genetics) that has been 'applied' to the Mass called 'dust' or 'clay' or 'sand', and the Mass called 'water' using a little bit of space (land) and some SUN for energy. The farmer and breadmaker apply their own designs as they harvest, thresh, grind, mix, knead, bake and cut to specialize that mass into a finished product.

But software also requires Mass for storage (a hard-drive, CD, DVD, RAM, even paper or your brain if you have not yet entered it into a computer) and a physical input device (such as a keyboard or microphone) for creation and an output device (such as a monitor or speakers) for "expression". This Mass also requires it's own Space to exist and of course software has little value if it can't be "expressed" by temporarily applying that design to a completed computer components using electricity for energy.

While the time and personal energy (labor) needed to copy a grain of wheat appears to be much more than downloading a copy of a program and running it, if we factor in all the resources required to manufacture the hardware and supply the electricity as compared to allowing nature to propagate the seed, it may not be as much of a difference as we imagine.

In summary, even though different TYPES of things require different AMOUNTS of physical resources for their production, the fact remains that all things have infinite potential, and all things are realistically constrained by space, time, mass and energy." (http://www.oekonux.org/list-en/archive/msg04253.html)

See also: http://Blog.P2PFoundation.net/one-loaf-per-child/2007/06/14


A Critique of the Cornucopian Abundance Movement

Gregor Macdonald:

"The Abundance Movement

A flowering of new books heralding a new age of abundance have recently appeared, including one from Mr. Diamandis.

However, it is worth noting this cultural theme comes after a decade in which the production rate of many natural resources, from oil to gold to (more recently) copper, did not speed up but instead either slowed or stagnated in the face of quickly rising prices. Crude oil production has been trapped below a ceiling since 2005. Global production of gold actually fell every year of the past decade until the last two years, but it is once again stagnating. Copper production managed to rise the past decade. However, ore grades of copper have been declining for a century, and this is why copper has now repriced at much higher levels, closer to $4.00 per pound. Recent data shows also that the rate of growth of global copper production in the last decade slowed significantly and also stagnated in the past 24 months.

There’s an important distinction to make, therefore, between an abundance movement that simply posits that we’ll have more of everything, at cheaper prices, in the same style as the past, as opposed to an abundance movement that is tethered to reality and realizes that large changes in consumption, values, and lifestyle will be needed to create the next phase of “wealth.”

Authors such as Juliet Schor, who wrote Plentitude, are much more reflective of and respectful of limits, and therefore do not dream of the next phase of mineral mining in outer space. Rather, many “new wealth” thinkers have gravitated instead to a less is more pathway, in which a lot of our previous consumption and time-bankruptcy is finally recognized as waste.


Three Crucial Problems with the “More is More” Abundance Movement

Peter Thiel recently debated George Gilder at ISI (you can open the video at YouTube, here). Thiel made a familiar point, which is that the impact of technological progress has become more narrow. I have treated this issue in previous reports and pointed to some of the data on which this thesis relies, including the stagnation of Total Factor Productivity, for example.

But Thiel goes on to make a second point, which is that belief in rapid, even accelerating technological progress is surely going to cause tremendous mis-allocation of capital. And that’s the first crucial problem I see with the cornucopian abundance movement.

Like a financial system that refuses to accept that tightly coupled structures are risky and that risk itself grows with in tandem with complexity, the cornucopian abundance approach simply won’t take no for an answer. This means that instead of focusing on smaller solutions with more immediate effects, grandiose solutions with long timelines are pursued instead.

The second crucial problem is a failure to consider the limit outlined by Paul Gilding, which is that present growth rates of energy consumption, for example, imply an economy that just about everyone can agree is simply too large for the planet to handle. You simply cannot keep growing the size of the human-created heat engine up to the level of a star. This was articulated beautifully by physicist Tom Murphy in his recent and very widely read post, Exponential Economist Meets Finite Physicist. When problem solvers entirely avoid the subject of limits, it is both appealing and exciting, but eventually it becomes vaguely pathological.

Finally, there are a number of pressing issues already on the planet, which range from the risk created when food production is outsourced by water-starved populations to other continents, to large regions of the world such as Asia attempting to provide increased electrified transport for billions of people. Leap-frog adoption of mobile telecom and the rise of social networks will no doubt serve to get these emerging voices out to a world eager to learn and to help with solutions. But celebrating the success of solutions before they’ve actually arrived -- indeed, well before they’ve arrived, is no solution at all." (http://www.chrismartenson.com/blog/cornucopians-space-deliver-dangerously-misguided-message/75003)

More Information

  1. See the related entries on Post-scarcity, Artificial Scarcity and on the Abundance vs. Scarcity Mentality
  2. Related: Rivalry
  3. Material Progress <is> sustainable, see http://www-formal.stanford.edu/jmc/progress/
  4. The Post-Scarcity Economics/Culture of Abundance Reading List v2.2


Roberto Verzola on the Theory and Practice of Abundance

An overview of the most important articles and essays published on the P2P Foundation blog:


Series 1:


http://blog.p2pfoundation.net/an-introduction-to-the-economics-of-abundance-1-the-supply-side/2009/12/05

http://blog.p2pfoundation.net/an-introduction-to-the-economics-of-abundance-2-the-demand-side/2009/12/06


Series 2:

http://blog.p2pfoundation.net/abundance-as-a-field-of-study-1/2008/11/21

http://blog.p2pfoundation.net/abundance-as-a-field-of-study-2-a-typology/2008/11/22


Series 3

http://blog.p2pfoundation.net/the-war-against-abundance-in-the-physical-world-1/2008/11/15

http://blog.p2pfoundation.net/the-war-against-abundance-in-the-physical-world-2-towards-policies-for-abundance/2008/11/16


Miscellaneous


http://blog.p2pfoundation.net/roberto-verzola-finite-demand-makes-relative-abundance-possible/2009/01/31

http://blog.p2pfoundation.net/from-gain-maximization-to-risk-minimization/2008/12/03

Key Books to Read

Herman Daly. Beyond Growth: The Economics of Sustainable Development. Beacon Press, 1997


Herman Daly. For the Common Good: Redirecting the Economy toward Community, the Environment, and a Sustainable Future. Beacon Press, 1994


Marshall Sahlins. Stone Age Economics. Aldine, 1972

See also: Introduction to Economic Abundance