[p2p-research] open-source gadgets have the best chance in markets where the technology has matured to the point that it is commonplace.

[Ryan Lanham]

On Thu, Mar 25, 2010 at 4:51 PM, Patrick Anderson <agnucius at gmail.com>wrote:

> On Thu, Mar 25, 2010 at 9:29 AM, Ryan Lanham <rlanham1963 at gmail.com>
> wrote:
>
> > Once the technology slows, it becomes free because markets really only
> > support differentiation.  What people buy is differentiation.  The idea
> that
> > people can sell "utilities" that maintain consistent low levels of
> service
> > is absurd.  There is no market theory to support it except monopoly.
> >
> > The same is true of medicine too.  As soon as doctors start to all do the
> > same things (which they are violently fighting) then, it becomes free.
>
> Ryan,
>
> Maybe I am misunderstanding you here.
>
> Are you saying things are become "zero cost" when they are
> 'commonplace' - when they are no longer 'differentiated'?
>
> If so, then why are rudimentary things such as shelter, food and older
> medicines still *so* expensive?
>
> Thanks,
> Patrick
>

It seem that you understand me correctly.

What is expensive is differentiation.  Living in this special city in this
style of abode is expensive.  Sheer calories and basic shelter are of
minimal expense in any developed nation.  A worker of almost any sort can
make ends meet in undifferentiated locations...they can even consume
luxuries.  In equal shares?  No.  In basic shares yes.  Differentiation is
what costs and what people pay for.

What capitalism is, is specialization--rarity.  Or if you like, scarcity.
Innovation is the most common form of scarcity because it is protected.  The
incentive to deliver it, is based on its protection.  In other words, the
price of generic drugs drops dramatically when the patent expires...watch
Nexium in three or four years when it goes from one of the biggest earning
items on earth to a few pennies per pill.

The problem with labor now is that people cannot differentiation
themselves.  Skills are being surpassed by automation.  That's new in
history.  As it accelerates, labor will become free.  As each technical
domain stabilizes, that domain will become free.  Free is a sign that
differentiation is difficult.

The classic example is cell phones which are now made all around the Pacific
Rim essentially for free.  The basic foundry for manufacture is trivial.
There is no skill to speak of in operation.  Those are the businesses young
Chinese entrepreneurs seek out...the way US WW2 vets wanted to own a gas
station--easy, basic, stable and little skill.   If a field where no new
sorts of basic cell phones come forward, you get all sorts of market
entrants like that, and the price of the item falls to free.

I see it happening everywhere where huge natural resources are not required
in production.  If such resources are required, the price falls to the value
of the resources.   Labor and IP go to zero.

Ryan
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listcultures.org/pipermail/p2presearch_listcultures.org/attachments/20100325/8357df52/attachment.html>