684:
developed to suit their needs. The business would profit not on the program, but on the resulting boost in efficiency enabled by the program. The subsequent abundance of the program would lower operating costs for the developer as well as other businesses using the new program. Lower costs for businesses result in lower prices in the competitive free market. Lower prices from suppliers would also raise profits for the original developer. In abundance, businesses would continue to pay to improve the program to best suit their own needs, and increase profits. Over time, the original business makes a return on investment, and the final
33:
759:
625:, large scale production of most drugs is inexpensive, but developing safe and effective drugs can be extremely expensive. Typically, drug companies have profit margins that extract much more excess profit than necessary to repay their initial investment. It is argued that this high payoff attracts more investment and labour talent, increasing the pace of
721:
Socialists extend their argument to include "socially wasteful production" such as the production of goods which are seen as "status" goods (e.g. diamonds or expensive cars). This sort of production leads to a situation of artificial scarcity of socially useful goods because a large part of society's
683:
An economic liberal argument against artificial scarcity is that, in the absence of artificial scarcity, businesses and individuals would create tools based on their own need (demand). For example, if a business had a strong need for a voice recognition program, they would pay to have the program
337:, an enterprise is judged to be successful and efficient if it is profitable. To obtain maximum profits, producers may restrict production rather than ensure the maximum utilisation of resources. This strategy of restricting production by firms in order to obtain profits in a capitalist system or
344:
Artificial scarcity essentially describes situations where the producers or owners of a good restrict its availability to others beyond what is strictly necessary. Ideas and information are prime examples of unnecessarily scarce products given artificial scarcity as illustrated in the following
322:
629:. The expiry of patents works to limit the period of exclusive rights to sell a new drug. After a time of profiting from legally enforced artificial scarcity, the patent expires, and other companies can make generic versions, and compete on price in a free market.
435:
make it difficult for new producers to enter the market. These may be inherent to the business (such as the cost of building a new factory), related to government regulation, or intentionally created (sometimes illegally) by incumbent suppliers to reduce
730:
Some socialists argue that not only artificial scarcity but even the doctrine of scarcity itself is a creation of the capitalist system because any kind of property was considered a burden for the nomadic lifestyle when civilisation was in the
516:
might be manufactured in artificially low quantities to take advantage of the reputation of the brand and the difficulty other suppliers have in replicating the design, even if not protected by intellectual property rights.
535:
that create artificial scarcity, including payments for non-production, government purchasing at a guaranteed price, and even deliberate destruction. This is typically done in agricultural markets to aid farmers. Examples:
508:, and can extract a monopoly price. This succeeds only to the degree that substitutions are unavailable or less desirable or the identity of the producer is considered important. For example, there is only one original
349:
If you have an apple, and I have an apple, and we exchange apples, then you and I will still each have one apple. But if you have an idea, and I have an idea, and we exchange these ideas, then each of us will have two
717:
argue that artificial scarcity is beneficial for the owner, but unfavourable towards the consumer, as it enables the owner to capitalise off ideas and products that are otherwise not property in the physical sense.
726:
issues, and other such activities to protect capitalism such as weapons research and the development of security firms; socialists argue that the allocation of resources to these activities is not socially useful.
621:. In the example of digital information, it may be inexpensive to copy information almost infinitely, but it may require significant investment to develop the information in the first place. In the example of the
722:
resources are being diverted to the production of these goods. For example, capitalism has led to the growth of money-based activities like banking-retailing services, remedial measures to deal with
95:
645:
There is an argument that copyright is invalid because, unlike physical property, intellectual property is not scarce and is a legal fiction created by the state. The argument claims that,
1110:
964:
399:, plus a profit that makes entering the market worthwhile compared to other opportunities. Circumstances with insufficient competition can lead to suppliers exercising enough
1316:
659:
1103:
1632:
1029:
672:
oppose artificial scarcity on the grounds that their lack of physical scarcity means they are not subject to the same rationale behind material forms of
747:, both questioning the scarcity of physical and intellectual goods as currently imposed by artificial cultural, bureaucratic, or economic constraints.
273:
1281:
1096:
929:
415:- a small number of producers - can also sustain an undersupply if no producers attempt to gain market share with lower prices at higher volume.
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974:
364:
Even though ideas as illustrated above can be shared with less constraints than physical goods, they are often treated as unique, scarce,
326:
512:, which is very expensive, even though the work is out of copyright so that copies and reproductions are available at low cost. A luxury
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has access to a program that suits their needs better than any one program developer can predict. This is the common rationale behind
242:
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80:
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464:, and allow others to do the same to derivatives of that code. Producers use various means to self-enforce payment and make
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in a particular marketplace. The inefficiency associated with artificial scarcity is formally known as a
1406:
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952:
Ruthlessly resolved to force coffee prices up, Brazil's
National Coffee Council continues to burn coffee
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701:
677:
373:
247:
520:
Non-manufacturers can create artificial scarcity and extract monopoly prices (at least temporarily) by
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Producers uninterested in the market due to low expected profit margins compared to other opportunities
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689:
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202:
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85:
425:- a group of suppliers explicitly agree to constrain supply. This is usually illegal under national
1266:
1052:"Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects"
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Artificial scarcity is said to be necessary to promote the development of goods or prevent
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Monopolies created in law to encourage innovation and make certain businesses worthwhile
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pricing structures, such as those enabled by laws that restrict competition or by high
123:
105:
563:
European Union guaranteed purchases of certain agricultural commodities falling below
1621:
1525:
1480:
1250:
1047:
965:"$ 30,000,000 of Coffee Destroyed by Brazil In Year Under a Price-Stabilization Plan"
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Robust competition among suppliers tends to bring the consumer price close to the
32:
1088:
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987:
Brazil's program of destruction of coffee to support the price of that commodity
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669:
601:
597:
461:
456:
software is a counterexample where copyleft advocates use copyright licenses to
149:
1336:
1159:
859:
754:
334:
306:
649:
on copyright, unlike theft, does not deprive the victim of the original item.
407:, where a single producer has complete control over supply and can extract a
1211:
1080:
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558:
509:
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54:
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680:, are creations of the state that limit the rights of the individual.
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422:
377:
134:
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purchases of dairy products from WWII to the 1990s, resulting in
876:
1092:
448:, when used to disallow copying or disallow access to sources.
840:. Vol. 32–34. Honor Society of Phi Kappa Phi. p. 45.
418:
Lack of supply competition can arise in many different ways:
553:
Conversion by the French government of wine into industrial
504:, expensive cars) are manufactured as one-of-a-kind or in a
468:
difficult, including controlling physical access to copies,
31:
550:
Destruction of coffee by the Brazil
National Coffee Council
676:, and that most instances of artificial scarcity, such as
856:
Antitrust, Patents, and
Copyright: EU and US Perspectives
1569:
1518:
1443:
1427:
1420:
1384:
1259:
1127:
1083:: Revolver—Archiv für aktuelle Kunst, 2005), p. 20.
900:"Software and Artificial Scarcity in Digital Media"
739:libertarians and anarchists, they will argue for
660:Libertarian perspectives on intellectual property
806:
804:
802:
460:the right to copy, access, view, and change the
480:, and disruption of illegal marketplaces (e.g.
403:to constrict supply. The clearest example is a
347:
1104:
267:
8:
587:, where overproduction can result in a fine
429:, but some cartels are government-approved.
1424:
1111:
1097:
1089:
341:is known as creating artificial scarcity.
274:
260:
20:
235:Enforcement authorities and organizations
1282:Business models for open-source software
1077:Open Cultures and the Nature of Networks
1059:Harvard Journal of Law and Public Policy
320:
798:
234:
113:
41:
23:
904:The Political Economy of Communication
1471:Organization for Transformative Works
640:Criticism of copyright § Non-scarcity
7:
293:of items despite the technology for
1633:Criticism of intellectual property
898:Sullivan, John L. (20 June 2016).
600:artificially reduce the supply of
500:Some products (e.g. works of art,
372:, and thus allotted protection as
14:
531:Governments use various types of
243:International Competition Network
1292:Commercial use of copyleft works
757:
638:This section is an excerpt from
544:in the United States during the
1272:Alternative compensation system
879:. Free Software Foundation, Inc
376:in order to allow the original
327:production–possibility frontier
297:or the sufficient capacity for
1456:Electronic Frontier Foundation
973:. 12 June 1932. Archived from
248:List of competition regulators
1:
1297:Commons-based peer production
1165:Legal aspects of file sharing
1001:Against Intellectual Property
938:. 6 June 1932. Archived from
388:Causes of artificial scarcity
301:. The most common causes are
1392:Access to Knowledge movement
1027:When Stealing Isn't Stealing
575:Commodity Credit Corporation
930:"Brazil: Destroy! Destroy!"
557:, related to the idea of a
542:Agricultural Adjustment Act
528:on a particular commodity.
1649:
1013:Ludwig von Mises Institute
699:
657:
637:
567:, resulting in occasional
115:Anti-competitive practices
81:Herfindahl–Hirschman index
50:History of competition law
1506:Students for Free Culture
1402:Cultural environmentalism
1359:Prizes instead of patents
1155:Digital rights management
1037:(2012) The New York Times
1032:January 30, 2018, at the
811:Cox, Robin (April 1998).
474:digital rights management
1461:Free Software Foundation
1006:October 8, 2022, at the
1592:RiP!: A Remix Manifesto
1302:Electronic sell-through
1197:Monopolies of knowledge
1140:Censorship by copyright
864:Edward Elgar Publishing
745:post-scarcity economics
735:stage. Along with some
623:pharmaceutical industry
374:intellectual properties
1606:The Internet's Own Boy
1412:Free software movement
1239:software patent debate
1145:Copyright infringement
834:Phi Kappa Phi (1952).
817:The Socialist Standard
466:copyright infringement
362:
330:
160:Occupational licensing
36:
1407:Free-culture movement
1317:Libertarian positions
1312:Free-software license
1277:Anti-copyright notice
1120:Intellectual property
837:Phi Kappa Phi journal
813:"Artificial Scarcity"
702:Post-scarcity economy
678:intellectual property
384:from their own work.
357:Phi Kappa Phi Journal
324:
35:
1327:Open-design movement
783:Planned obsolescence
690:open-source software
526:cornering the market
450:Proprietary software
203:Occupational closure
198:Dividing territories
186:Essential facilities
86:Market concentration
16:Concept in economics
1267:All rights reversed
1135:Artificial scarcity
942:on 25 February 2020
877:"What is Copyleft?"
854:, & Elgar, E.,
565:intervention prices
502:non-fungible tokens
287:Artificial scarcity
1585:Good Copy Bad Copy
1531:Alexandra Elbakyan
1435:Copyright Alliance
998:Kinsella, Stephan
970:The New York Times
788:Rentier capitalism
666:classical liberals
397:cost of production
331:
329:showing trade-offs
222:Regulatory capture
37:
1615:
1614:
1514:
1513:
1466:Open Rights Group
1081:Frankfurt am Main
1024:Green, Stuart P.
977:on 17 August 2021
773:Artificial demand
741:sharing economies
585:production quotas
579:government cheese
494:for useful things
486:torrent poisoning
433:Barriers to entry
335:capitalist system
284:
283:
213:Misuse of patents
208:Predatory pricing
193:Exclusive dealing
76:Barriers to entry
64:Coercive monopoly
1640:
1546:Richard Stallman
1491:Public Knowledge
1451:Creative Commons
1425:
1332:Open music model
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852:Shelanski, H. A.
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765:Economics portal
762:
761:
674:private property
627:drug development
619:source depletion
596:Restrictions on
573:U.S. government
569:butter mountains
546:Great Depression
482:cease-and-desist
360:
276:
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167:Product bundling
69:Natural monopoly
21:
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1578:Steal This Film
1565:
1541:Lawrence Lessig
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1380:
1376:Video on demand
1255:
1150:Copyright troll
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1117:
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1034:Wayback Machine
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1008:Wayback Machine
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733:hunter-gatherer
707:Social liberals
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506:limited edition
470:copy protection
452:is an example.
427:competition law
390:
380:to potentially
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311:deadweight loss
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176:Refusal to deal
155:Tacit collusion
101:Relevant market
25:Competition law
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409:monopoly price
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1048:Palmer, T. G.
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850:LĂ©vĂŞque, F.,
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1561:Aaron Swartz
1486:Pirate Party
1444:Pro-copyleft
1322:Open content
1307:Free content
1207:Orphan works
1202:Music piracy
1134:
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883:28 September
881:. Retrieved
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227:Rent-seeking
140:Price fixing
91:Market power
18:
1556:Peter Sunde
1551:Peter Suber
1371:Share-alike
1342:Open source
1337:Open patent
737:free-market
724:trade union
598:immigration
462:source code
436:competition
307:fixed costs
150:Bid rigging
1622:Categories
1481:PiratbyrĂĄn
1229:biological
1160:Gripe site
860:Cheltenham
794:References
715:anarchists
711:socialists
700:See also:
658:See also:
654:Right-wing
647:infringing
633:Opposition
366:inventions
317:Background
295:production
217:copyrights
96:SSNIP test
1385:Movements
1212:Biopiracy
981:17 August
946:17 August
696:Left-wing
608:Arguments
559:wine lake
540:The 1933
510:Mona Lisa
484:letters,
458:guarantee
446:Copyright
413:oligopoly
129:Collusion
59:oligopoly
1628:Scarcity
1364:contests
1352:software
1347:hardware
1287:Copyleft
1260:Concepts
1244:trolling
1234:software
1122:activism
1050:(1990).
1030:Archived
1004:Archived
751:See also
686:consumer
613:Advocacy
522:hoarding
514:supercar
478:paywalls
454:Copyleft
405:monopoly
394:marginal
353:—
303:monopoly
291:scarcity
55:Monopoly
1599:TPB AFK
1496:Sci-Hub
1224:Patents
1175:digital
1011:(2008)
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555:ethanol
492:Patents
378:authors
345:quote:
299:sharing
135:cartels
1519:People
1190:videos
1170:Mashup
1128:Issues
423:Cartel
382:profit
350:ideas.
1185:novel
1180:music
1055:(PDF)
914:3 May
664:Some
602:labor
411:. An
333:In a
171:tying
144:cases
1065:(3).
983:2021
948:2021
935:Time
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885:2022
743:and
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