The Citizen Media Law Group points us to an even better explanation of this very point, by Eric Reasons, noting that artificial scarcity is facing massive deflation. It's such a great concise way of making the point, I wish I'd thought of it:Every business model relying on intellectual property law (patent and copyright) is heading for massive deflation in our lifetimes. We've seen it with the music industry and newspapers already. The software industry is starting to feel it with the maturity of open source software, and the migration of applications to the cloud. Television, movies, and books are next. I've come to question the ability of copyright and patent law to foster innovation, but leaving that aside, the willingness of people to collaborate and share, and the tools provided for it on the internet, may render these laws obsolete.
He then explains why he believes deflation is the right term:Why is deflation a better descriptor? Because as businesses whose product is reliant on intellectual property shrink due to Internet-based efficiencies, consumers are reaping the rewards of these efficiencies.Exactly. The reason old business models are at risk is because the free distribution of content is simply more efficient due to modern technology, and it's about as close to impossible to hold back economic efficiency, once enabled. Artificial scarcity is based on pretending you can hold back that efficiency.
Masnick then goes on to point out that I'm being a tad negative, in which he's absolutely right. Of course, that post was largely a reaction to all of the cheerleaders I have heard touting a "knowledge economy" as our sanctuary. I merely wanted to issue some caution not to take that point for granted.
There's some great discussion going on over there in the comments section. Dive in!
Joe Trippi generously linked my post (The Economic Reset Button) in his Eric Schmidt on Innovation.
I'm pretty sure it was to grab the video of Jeff Jarvis and Eric Schmidt, but still... If Howard Dean's 2004 National Campaign Manager, and author of The Revolution Will Not Be Televised wants to link you, you're gonna take it any way you can get it, and you're gonna damn well link him back.
Finally, a smattering of tweets for The Economic Reset Button:
Most notably, @williamfischer dragged @jeffjarvis over for some comments on the post. Color me flattered!
If I get linked by either Clay Shirky or Larry Lessig this week, I'm throwing a party.