I thought everyone would enjoy a recent correspondence I had with Kinsella.
I wrote him as follows:
How does the presence or absence of a good’s consumed physical space affect its scarcity? Non-scarce goods tend to consume no space but scarce good tend to. I can think of very few exceptions here - fire consumes space but is non-scarce but ideas, images, text, techniques, etc. consume no space - unless I’m forgetting something obvious.
He responded as follows
hmm. I was having a talk w/ my kid yesterday–I was explaining the volume of a box. And that it is three dimensional.
I then asked him how many dimensions a piece of paper has. He first said two dimensions. I said so it has length and width, but no thickness at all? He thinks, then says THREE DIMENSIONAL! He got it. I said imagine a piece of paper so flat that it had no thickness at all. Would it even exist? No. It would be more like an imaginary rectangle or square that you are just thinking about.
I can’t think of any existing scarce resource that does not occupy space in some manner.
BTW I was thinking about our “new dualism.” The standard dualism concerns the realms of causality and teleology. Causality concerns causal laws, that pertain to the use of means to achieve ends: the means selected must be causally able to help achieve the end desired. Teleology refers to explanations about the purposive action itself–it talks about the actor as an actor, not as a causally determined cloud of particles, but as a choosing person having goals, desires, preferences, ends.
Both realms have to do with scarce means: causal laws tell you what scarce resource will serve as a means to achieve an end; the end itself is some change in the configuration of scarce things–some rearrangement.
Human action also deals with scarcity. But human action also is guided by information. So human action–the teleological realm–bridges the gap across the scarce and non-scarce realms. It takes non-scarce information and uses it to change the scarce world.
So if we view the universe as divided into scarce and non-scarce realms, causal laws apply to the scarce realm (and scarce things have some physical or space-aspect?), and teleological or praxeological rules apply to both. I think.
It’s not the consumed physical space which affects scarcity. Material things consume some physical space; but some of those things are scarce, some aren’t (e.g. water in oceans). Their scarcity depends on their amount, whether they are plentiful or not.
Non-material things cannot be consumed, destroyed by using; their non-material nature is the reason why they cannot be consumed (and why they aren’t scarce), and it is also the reason why they don’t consume any physical space. So we cannot say that absence of consumed space is affecting scarcity.
As you say, the non-material nature of non-material things is the reason they are non-scarce. I think that’s probably right. But one exception besides ocean water (which is actually scarce if you think of shipping lines): fire. It is a non-scarce good that takes up material space.
Yes of course. In the same way, you have to have a computer to send email. All things mix scarce and non-scarce goods. A Lady Gaga concert is a scarce person on a scarce stage using scarce equipment to deliver what becomes a non-scarce good.
Well, ice is just frozen water and water is certainly a scarce good. So is air. Just the morning, I came in the office and left the door open and someone said, “shut the door, you are letting the air out!”
ha ha. In any case, it is true that air is a scarce good.
Ok, here is an example of a non-scarce good that takes up space. Consider two people in paradise with a sea of bananas. You can eat and eat and never get to the end of them. Non-scarce good. However, two provisos. The bananas cannot be subject to spoiling. And there can be no free trade between paradise and the regular world, else one of the two residents might arbitrage the bananas at a price and eventually their quantity would matter.
Mostly in the real world, non-scarce goods take up no space (images, ideas, techniques, methods, recipes), and the only exception I can think of is fire.
Fire is “consumed” immediately as it is produced, if you don’t add fuel, it will die out.
I’m afraid you’ll need to define “non-scarce good”. Isn’t it a contradictory term? Something what is not scarce cannot be an (economical) good. All goods are scarce. Things which are not scarce are general conditions of human action, like air which you breath. Can you imagine that you won’t have enough air to breath? Or you need air to make a fire, but you don’t need to worry about it if you are in an open space. The air in your room is something else - it was probably cooled by airconditioning, and so it is scarce, it is an economic good.
Maybe we can imagine situation when oxygen would become scarce. But right now it isn’t, and we are talking about real, not hypothetical world… I thougt.
I’m kind of a hardliner when it comes to defining scarce and non-scarce goods. When discussing economic concepts I think there is an important different between goods that are truly non-scarce and goods that are scarce but plentiful enough that it doesn’t matter for the purposes of the discussion. Air is certainly one of the latter. If you look at Jeffrey’s list of non-scarce goods (minus fire) you’ll notice that they are all actually ways in which purposeful actors use scarce goods; ways to structure scarce goods into something with meaning above that of their simple physical properties. Meaning that can only be comprehended by actors.
That’s why I think fire is a scarce good. How to make fire, the particular ways to generate hotter fire, etc. are certainly not scarce but, strictly speaking, fire is just stuff you owned transformed into another state. Much like ice is to water.
We can define non-scarce in the same way that Menger, Fetter, Mises, and Rothbard did, something that exists in such superabundance that it no longer needs to be rationed by economic means. In practice, non-scarce goods are those things that can be recplicated without displacing or depreciating the integrity of the original. Ideas, speech, images, sound are all examples of non-scarce goods.
Non-scarce goods do however having economic value. Here is an example I ran into this morning. There were two boxes of baking soda on the store shelf. They were identical in size and contents and packaging. One was $1 and one was $1.50. The first one was a store brand and the second one was Arm and Hammer. What accounts for the difference in the selling price? It is the confidence and good will that consumers have toward the name brand product. Confidence and good will are non-scarce goods, capable of non-finite replication without displacement. I can develop good will and it doesn’t take it from you. We can all have an unlimited quantity of it.
On fire, I would say it is a non-scarce good because of the absence of displacement. If I take your car, you no longer have it. But I can’t take your fire from you. You give me a flame and I can have a flame without taking yours. To be sure, I can douse your flame but that is taking the scarce good of the fuel that makes the flame burn.
I don’t really like that definition. For most practical purposes it’s good enough but it leaves room for non-scarce goods to transition to scarce goods which I’m not fond of. I think completely segregating the two in a way that doesn’t allow for reclassification based on the surroundings (am I talking about air on earth in 200 BC, or air in China in 2005, or air on Mars?) is more definitional.
For this conversation it’s not really a big deal, though.
This is interesting. Fire definitely fits here, as you later show. To take someone’s fire you’d really be taking their fuel.
edit: I agree with Jeffrey that non-scarce goods have economic value.
Isn’t it strange that Hydrogen, the most abundant element in the universe, could be considered a scarce good under certain circumstances (fuel on a space-ship), while “good-ideas” are very rare and in demand, yet can’t be considered scarce.
Maybe ideas are scarce in another way: human-brains are scarce and can produce ideas/thoughts only at some finite rate. Therefor there are only some given amount of thought/ideas that can “exist” or have ever “existed” at any given time. (thinking of ideas as some physical configuration of chemicals, brain-matter, and electricity)
Interesting thoughts, and I largely agree. However, libertarians typically consider physical finity and economic scarcity to be two different things. So while there’s a finite number of human brains (or a finite amount of “human-brain matter”), one person’s “use” of a human brain doesn’t conflict with another’s “use” of it – in the sense of ideas. (Zombies would consider human brains to be economically scarce.) And certainly there are opportunity costs to devoting one’s time on an idea for X as opposed to an idea for Y. But again, once an idea is produced, one person’s use of it cannot conflict with another person’s use of it.
Essentially, the concept of “intellectual property” is a bad analogy to physical property, specifically the physical products of physical labor. The analogy goes like this: as one owns what he physically produces, so he owns what he mentally produces. But the non-scarcity of ideas (again, in an economic sense) demolishes this analogy. This means that physical labor and mental “labor” are not equivalent. While both take time, effort, and therefore necessarily incur opportunity costs, the products of each are fundamentally different in certain ways.
By the way, I don’t like that definition of non-scarcity either. I only use it to seque out of conventional defintions. For my own part, in my own belief, I don’t see that the real world offers any examples of non-scarce goods that are not infinitely replicable goods. I would would define non-scarcity in those terms, but I don’t think it is necessary to do so in order to make the point that we live in a world with two realms: scarce and non-scarce.
I think there is a serious problem with this even according to your own criteria.
The confidence associated with a particular product is an inherent feature of the total product that cannot be replicated or duplicated. I cannot just go and tap into that reputation and attach it to another product without the chance of degrading the original product. For example, if I steal it by say, creating a counterfeit, I can certainly degrade the original if the consumer is unable to tell the counterfeit from the original. Such is not the case for music, ideas, etc…
Developing good will requires scarce resources just like every other part that comprises the final product.