In famous letters from 1775, Abigail Adams implores her husband John to do something to increase the manufacture of straight pins. Things like that serve to remind us how precious in years past were pins, nails, paper and for that matter all manufactured goods.
That has certainly changed. It takes sixteen hours of labor to assemble a Maxima in Nissan's plant in Smyrna, Georgia. You can get a computer motherboard with processor and memory for less than one hundred dollars; a two terabyte hard drive for 120 U.S. dollars. Retail.
Now think for a moment what's inside that motherboard and hard drive. Consider the immense number of components, the ridiculously miniscule dimensions and tolerances involved in making those components.
Item by item, process by magical process, manufacturing technology is obliterating scarcity. If there's any item that can't be made cheaply and with high quality today, just wait a few years.
Economics has been described as the study of scarcity. Ever since people started making and bartering goods and services, the fundamental assumption has been that everything involved in that process, from raw materials to labor, is scarce.
But production technologies (much more than cheap Asian labor) have reduced not just manufacturing costs but also agricultural costs and other production costs to the point where the cost of many goods, including food, are based almost entirely of the cost of packaging and distribution.
As we all know, retail prices are not necessarily related to production cost. As manufactured goods became less scarce in the twentieth century, their retail price was increasingly driven by branding. Branding is the creation of demand through the manufacture of awareness.
The awareness economy began with 19th century mass magazines and peaked at the end of the 20th century, when mass media - broadcast and print - was at its most powerful. The means of building a brand - communication to large audiences - became the new scarce item.
Mass awareness will always be somewhat scarce, as the human mind can absorb a finite number of marketing and branding messages. Targeted awareness, however, has become another victim of the scarcity shortage. Craigslist and similar matchmaking channels have nearly completely disintermediated the matching of needs with availabilities. On the Web it's fairly easy and inexpensive to reach a tightly targeted audience with a targeted message. Targeted awareness, once the guarded asset of large advertisers, is now available to the smallest marketer.
Yes, the scarcity shortage has claimed another victim, the awareness industry. Awareness is no longer a scarce commodity, hence the decline in traditional print and broadcast media.
Does this mean that the scarcity shortage prevails everywhere, that everything we need or want is in abundance?
Of course not. Scarcity will always be with us. It just takes different forms as time marches on.
The most perceptive among us will always recognize new places where scarcity has popped up.
Successful businesses tend to ask, "What Is Scarce?" "What can I provide that people need and don't have enough of?" Often a very local or very targeted answer, e.g. "Dry cleaners are scarce in my rapidly developing part of town" can lead to a profitable small business.
Massive opportunities arise for those who can answer the question, "What is scarce not just in my part of town but everywhere?" As production efficiencies have made manufactured goods more commonly available than ever, good answers to that question themselves become scarce. There seems to be a scarcity shortage.
There is something that is desperately needed, massively in demand on a global scale, and very very scarce.
The common belief is that this item is scarce because it cannot be produced in sufficient quantity. Like gold or diamonds, its availability is very limited. It is simply not available.
We know, however, that that is not true. We know that this scarce item is actually quite produceable.
Take a moment to read about that which is scarce, and how you can have a role in the production of this scarce commodity.
Learn What Is Scarce...