Throughout history scarcity has been the defining characteristic of economics, and really of power and control in general. It does power the law of supply and demand, the fundamental tenant of microeconomics, after all. People with information not accessible to others, or governments or groups with access to weapons not accessible to others, had a much easier time staying in power. Businesses used scarcity to control their markets.
Here are a few examples:
Publishers used to control the flow of information. Newspapers and TV / radio had a virtual monopoly on the distribution of news. Book publishers controlled distribution of books. Sure, anybody could write a book. Good luck getting it read by anybody outside of your social circle though.
Record companies used to control the distribution of music. They decided how many CDs or albums to make, where to sell them, and to a large extent, how to price them. An entire ecosystem of musicians, producers, retailers, etc. existed due to this control of music distribution.
Taxi companies used legislatively granted monopolies and an artificially constrained market for taxi medallions to limit competition in local markets.
The digital economy, or more specifically the economy of abundance, has disrupted all the markets listed above. We are all publishers now, with a worldwide audience, all for the monthly cost of a couple of Large Starbuck's Mocca whatevers. Or free, if you are willing to sell your soul and publish for free on Google or Facebook. Likewise, the record companies can no longer command $15 for a physical container for music. Music is digital now, and for better or worse, artists have had to reorganize their careers, because most will never live on royalties from recorded music. The record companies are still trying to apply leverage where they still control a level of scarcity, such as access and influence over politicians, to pretend that it's still 1989. It's a pointless exercise that they are doomed to fail at.
Even Taxis have been disrupted, as Uber and Lyft have found a way to use software to eliminate the taxi company, and all the associated overhead. Anybody with a car is a possible driver in need of a paying rider. All you need to do is match them up. Uber does it with software. Yellow Cab could have done it with software 5 years ago. They didn't.
I think we are just at the beginning of the age of abundance. The Uber model for moving people is already being applied to move packages. Why pay Fed-Ex $85 to deliver something to Raleigh tomorrow when a traveling salesman is headed that way tonight anyway and will happily drop your package off tomorrow for $20. Cars sit idle 90% of the day while we work. Driverless technology and an app turn your car into a self-driving taxi that makes you money while you are at work. How many truck drivers are going to be out of jobs in 20 years? Given how often cars are idle, why do we all need to own one? A car sharing app could reduce the number of cars sold by a big enough percentage to kill off what's left of the US auto industry. When your car can drive you to Florida while you sleep overnight getting stuffed into a flying tube of aluminum starts to look a lot less enticing. How do you make a living selling stuff when anybody can print their own stuff with a 3-D printer? How do you maintain law and order when anybody, good guy or bad, can print a gun? The people controlling the raw materials will be in good shape. The rest of us?
It goes on and on. This is just the beginning. It's exciting (yay driverless cars!) and also scary, (boo 1 million unemployed truck drivers.) It's not going to stop, and politicians will be unlikely to even slow it significantly. How does society deal with all this? Abundance, ironically, squeezes the inefficiencies out of markets. However, the painful truth is that most of us make our living on those inefficiencies.
So where are we all going to work in 20 or 50 years?
This post inspired by Mike Masnick's opening remarks at the 2015 Copia Institute conference.