Why Abundance And Markets Don't Mix
Do you remember the movie “Spaceballs” by comedic legend Mel Brooks? There is a scene in which President Skroob, played by Mel Brooks, reaches into his desk drawer to open a can of clean “Perri-air” after assuring a news agency that “there is absolutely no air shortage whatsoever.” While it may seem ludicrous that there would ever be a scarcity of clean air, living in polluted cities such as Beijing, Manila, or Los Angeles shows that clean air is not as abundant as it once was.
For most of us, it is hard to imagine an abundant society. Abundance sounds nice. The concept of living in an abundant world feels good. No more worries about survival. Access to everything we may need or want. However, unless you are part of the group of people that comprise the top 0.1% of economic income, the reality of an abundant world feels like a pipe dream.
THE OPPOSITE OF ABUNDANCE IS SCARCITY
The opposite of abundance is scarcity. Most people are familiar with scarcity – scarcity of money, time, and meaning for the more fortunate or food, water, and shelter for the least. A cursory glance at the conditions of human life on earth might conclude that we live in a scarce world, but is that really true?
If one defines scarcity as an “insufficiency or shortness of supply”, then it should be fairly easy to distinguish whether we live in a scarce world. We simply ask the question, “is there enough of x to meet the needs of all human beings?” Let’s see…
Statistics show that there are an estimated 925 million hungry people in the world, which would imply that food is scarce. However, the world produces 2,720 kilocalories per person per day of food, more than enough to feed everyone on the planet. Food is not scarce.
Statistics show that approximately 630,000 people in the United States are homeless, which would imply that housing is scarce. However, there are over 19 million vacant homes in the United States, more than enough to house all those living on the streets. Housing is not scarce either.
It seems as though there is enough supply to meet the need for both food and housing, yet the reality for many people is that they are both scarce. They simply do not have the money to afford these basic necessities. Is money scarce?
Statistics show the amount of government and personal debt in the United States is now more than $34 trillion dollars, which would imply a lack of money. However, there is about $10 trillion dollars in the money supply.
Wait one second! Money is scarce! And when you investigate why, you will find that it is not scarce by accident. Due to the manner in which money comes into existence through interest-bearing debt, money is always in short supply. This is because when loans are made, only the principle is created, while the corresponding interest must be found in the marketplace in a never ending competition to avoid bankruptcy. And herein lies the problem. Why would the resource required for sustaining life in this economy be purposefully made scarce? (If we look hard enough, we may even find the source of our competitive world as well.)
ABUNDANCE AND FREE MARKET ECONOMICS DON’T MIX
Abundance is the enemy of a free market economy. One need only attempt to sell an abundant resource (i.e. sand at the beach) to realize the futility in that endeavor. In the free market system, goods must be scarce so that people would be willing to buy them.
Long ago, entertainment, in the form of community gatherings, singing groups, and town festivals was abundant and free. Today, most people purchase entertainment through television, movies, sports, and concerts making the entertainment business a multi-billion dollar industry. From entertainment to child care to bottled water, many modern products and services that were once abundant and free have been made scarce and consequently are able to be bought and sold. But are there examples of things that were once scarce that have become abundant, and what kind of impact did that have?
Thirty years ago, a gigabyte (GB) of data storage was very scarce. It fetched a hefty sum close to half a million dollars. Today a GB of data storage costs about seven cents retail and as low as three cents wholesale. Storing a digital copy of a two-hour movie costs less than a dime. While still not free and as abundant as air, many companies such as Google, YouTube, Facebook, and Dropbox offer many gigabytes of free personal storage to any user with an e-mail address. Data storage is now abundant.
This abundance of data storage has led to a revolution in global communications that is connecting the human race unlike ever before. People are now able to upload and share digital content on what would have been considered to be an unimaginable scale just a few decades ago, causing a huge leap in the extension of human empathy globally. This is not the first time that new technologies created abundance that transformed society.
As Jeremy Rifkin writes in The Empathic Civilization:
“Before print, people shared their thoughts together orally, in face-to-face dialogue and exchange. The print revolution helped nurture a more meditative environment… The mnemonic redundancy of oral communication and the subjective eccentricities of medieval script were replaced by a more rational, calculating, analytical approach to knowledge… This shift in consciousness prepared the way for a new idea of human progress [and the Industrial Revolution].”
THE PATHWAY TO AN ABUNDANT WORLD
The emergence of free, ubiquitous sharing of information, the dawn of the information age, and the ability for people around the world to connect, collaborate and share ideas has created a unifying force with the potential to transform civilization itself.
That is if we can create abundant energy. Despite being around for a century, energy is becoming scarcer, as evidenced by the steady rise of gas prices. Additionally, oil pollution resulting from the Deepwater Horizon spill and higher CO2 concentrations from the filthy Alberta Tar Sands pose other ecologically-transparent, yet economically-hidden, costs. If this trend continues, fewer people will be able to afford to drive cars, heat their homes, and even buy food. However, the world uses an estimated 16 terawatts of electricity annually – solar power has the potential to produce 6,000 times current global production, certainly enough to create abundant energy.
Abundant, distributed, clean energy is the key to a just and sustainable world. With abundant energy, there can be abundant water. With abundant water, there can be abundant food. The time is now to abandon rigid ideologies and theories of an invisible hand promising an elusive global prosperity and embrace the obvious necessity to transform our energy infrastructure to allow for the sharing of clean, distributed, abundant energy. Let us embrace new ways of thinking, explore new economic systems and living arrangements that promote abundance, and keep the cans of clean air relegated to space of satirical comedies.