It looked like a virtuous cycle.
But the abolition of scarcity implied the abolition of value. Value and
scarcity are two sides of the same coin. Prices reflect scarcity.
Abundant products are cheap. Infinitely abundant products - however
useful - are complimentary. Consider money. Abundant money - an
intangible commodity - leads to depreciation against other currencies
and inflation at home. This is why central banks intentionally foster
money scarcity.
But if intellectual property goods are so abundant and cost-free - why
were distributors of intellectual property so valued, not least by
investors in the stock exchange? Was it gullibility or ignorance of
basic economic rules?
Not so. Even "new economists" admitted to temporary shortages and
"bottlenecks" on the way to their utopian paradise of cost-free
abundance. Demand always initially exceeds supply. Internet backbone
capacity, software programmers, servers are all scarce to start with -
in the old economy sense.
This scarcity accounts for the stratospheric erstwhile valuations of
dotcoms and telecoms. Stock prices were driven by projected
ever-growing demand and not by projected ever-growing supply of
asymptotically-free goods and services.
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