Subject: Scarce Resources (Was Yahoo...) From: DRGardner@aol.com Date: Fri, 21 Apr 1995 22:07:54 -0400

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in response to craschke@du.edu who had said,

>Culture of the "net" has already been established as one in which people 
>do not pay per unit of information. It is likely that "customers" will 
>resist metering the net, no matter how worthy the objective.

>If no one will pay, or if the supply overwhelms the demand, then the 
>"exchange value" of the commodity - to borrow a phrase from Adam Smith - is 
>driven downward.

Eric Meyer observed:

>I'd buy your conclusion -- if your premise were correct -- but I'd add
>another conclusion to it. The same economic theories you so like to site
>all deal with allocation of resources and how the potential for reward
>determines how resources are allocated. The explosive growth of online
>pubication radically mitigates against any conclusion that supply will
>overwhelm demand.

I'd suggest you're both arguing on the border of what might be the real issue
-- in traditional economic theory (if I recall my basic economics class
correctly) we concern ourselves with studying the allocation of scarce
resources. Quantities are finite, and there is less gold than granite, so I'm
willing to pay more for that which is scarce.  "Information" or more
precisely speaking, intellectual property, is hardly scarce. This has been
the case for some time with software, music, books and magazines, and so on
where there is an initial investment required (often substantial)  to develop
the "commodity," but the incremental cost of producing an incremental unit (a
disk of software, another copy of the book, or whatever) is relatively small.
The availability of internet-based "production facilities" adds yet another
dimension to the question. The cost of entry is low (or at least lower), so
not only is the actual quantity of a specific commodity unlimited, but the
quantity of the commodity in the general sense increases as well.

I'd suggest that it changes the marketplace in fundamental ways and that old
rules don't apply -- or, at the least, they must be applied in new ways.

Regards,

Regards,

Dale Gardner

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