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Commerce · II.01 · MMXXVI · daylight

La Bourse  /  Volume II  /  Nº II.01  /  Ten concept briefs

TEN CONCEPT BRIEFS · Chapter II.01 — From Scarcity to Abundance

One page each. A reader who reads only these ten pages has the chapter.

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BRIEF 1 — Scarce in Four Senses

The idea. The word scarce names four different situations that behave nothing alike, and using one word for all four is the reason two people who agree on the facts can disagree completely about the remedy.

1. Thermodynamically bounded. The universe imposes a floor — a separation, a conversion or a concentration whose energy cost cannot go below a known number. Real, immovable, rare.
2. Positional. The stuff exists in quantity. It is in the wrong place, the wrong form, the wrong concentration, or available at the wrong time.
3. Entitlement-limited. It exists, it is here, and it belongs to somebody else who is entitled to keep it.
4. Institutionally enclosed. It is not physically limited at all. We have built an arrangement that makes it behave as though it were.

Worked example. Four sentences about water, each true, each requiring a different response. Separating salt costs at least 1.06 kWh per cubic metre — thermodynamic. The desalinated water is at the coast and the farm is inland and uphill — positional. The well exists and the neighbouring estate owns it — entitlement. The aquifer model that would tell us how much to draw is behind a licence fee — enclosure.

The figure. One out of four. Only the first sense is a fact about the world. The other three are facts about arrangement, and arrangement is what an economy is made of.

You already know this because you have been in a meeting where everyone agreed something was in short supply and nobody could agree what to do, and the argument went on for an hour before somebody asked where it actually was.

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BRIEF 2 — Rival and Excludable: Two Axes, Not One

The idea. A good is rival when one person's use reduces what is left for another. A good is excludable when it is practically possible to stop someone using it. These are independent, and the first is physics while the second is a choice.

Worked example. Two things that look alike and are not. A vaccine dose is rival: one arm, one dose. The vaccine formulation is non-rival: a thousand manufacturers can hold it simultaneously without any of them holding less. Almost every serious dispute in pharmaceutical policy is about people arguing the dose and the formulation as though they were one object.

The figure. The marginal cost of the ten-thousandth copy of a non-rival good is approximately what the first copy cost to reproduce, which is approximately nothing.

Why it matters. Rivalry cannot be legislated away and excludability cannot be discovered in nature. Knowing which one you are looking at tells you whether you are facing a physical problem or a drafting problem.

You already know this because you have lent someone a book and been without it, and told someone an idea and still had it.

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BRIEF 3 — Reserves Are Not Resources

The idea. The number everyone quotes as the measure of how much of something there is, is not a measurement of the earth. It is a measurement of price, law and permission.

The United States Geological Survey is exact about this. Reserves are that part of the identified resource which could be economically extracted at the time of determination — current technology, current prices, current law, ground somebody currently has the right to dig. Resources are what has been identified, at any grade, whether or not extracting it pays today.

Worked example, USGS Mineral Commodity Summaries, January 2024.

The figure. 3.75×. Between the number that sounds like the earth's contents and the number that actually describes the identified rock, there is a factor of nearly four — and neither figure moved because any rock moved.

Why it matters. "We are running out of X" is, in almost every case anybody has said it, a claim about price rather than about geology. That is not reassuring. A price event is exactly what running out feels like to anyone who cannot pay.

You already know this because you have watched a house you could not afford become a house you could afford, without anyone building anything.

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BRIEF 4 — The Exponential Eats the Stock

The idea. When draw grows at a constant rate, how much there is barely matters. How fast the drawing compounds is nearly the whole answer.

        T  =  ln(1 + g·L) / ln(1 + g)

  L = static life = stock / current annual draw
  g = growth rate of the draw
  T = years until the stock is gone

Worked example — lithium, USGS 2024 figures, draw growing 10 percent a year.

The figure. Finding 3.75 times more lithium buys 13.4 years. Halving the growth rate buys 15.1. Halving g beats nearly quadrupling the stock.

Why it matters. This is the honest negative of the whole chapter, and no reframing touches it. A stock that does not regenerate, under a draw that compounds, is a finite race whose finish line moves logarithmically with everything you find. Only two things move it: the growth rate, and circulation.

You already know this because you have seen what happens to a savings account when the withdrawals grow a little each month, and how little the opening balance turned out to matter.

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BRIEF 5 — The Circulation Multiplier

The idea. A stock you keep using is not a stock any more. It is a flux you made, and it is the only lever inside the depletion arithmetic that behaves kindly.

        M  =  1 / (1 − p)

  p = fraction of material in service that returns to service each cycle
  M = service delivered per tonne of virgin material

Worked example. Copper. Every identified copper resource on the planet is 2.10 times reserves. Copper's end-of-life recovery — which nobody planned and no ministry funds, because scrap has always been worth collecting — is already above 50 percent, worth 2.00 times. The scrap trade has already done what every undiscovered deposit in the USGS global assessment would do. Raising recovery from 50 to 80 percent is worth 5.00 times: more than identified and undiscovered resources combined.

The figure. The last ten points of recovery are worth more than the first fifty. Going from 80 to 90 percent doubles the multiplier; going from 0 to 50 merely doubles it too.

Why it matters. It converts an exploration budget into an engineering budget, and engineering budgets are inside your control.

You already know this because you have owned a good coat for fifteen years and a cheap one for two, and you know which one was the bargain.

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BRIEF 6 — Anti-Rival Goods

The idea. There is a third category beyond rival and non-rival. Some goods become more valuable the more people use them. Steven Weber named these anti-rival in his study of open-source production.

A language. A standard. A protocol. A currency. A body of case law. A road network. A shared vocabulary. For each of these, an additional user does not diminish your holding — they increase it, because the value is in the number of people you can now reach with it.

Worked example. Two people who both speak a language can trade. A hundred million can build an economy. The hundred-millionth speaker makes the language more valuable to the first, not less, and no amount of speaking uses it up.

The figure. For a rival good, value scales with your share. For an anti-rival good, value scales with the count of other holders — which is why network effects look like magic in a spreadsheet built for rival goods.

Why it matters. Charging for access to an anti-rival good does not merely exclude the non-payers. It reduces the value of what the payers bought. This is the one case where enclosure destroys value on both sides of the fence, and it is routinely missed because the accounting only has two boxes.

You already know this because you have chosen a file format, a messaging app or a spoken language on the basis of who else was already there, and you were right to.

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BRIEF 7 — The Five Positions

The idea. When a shortage is positional — which it usually is — it is positional in one of exactly five ways, and each has a different remedy. Naming which one turns an argument into a work order.

Worked example. Iceland in 1970 burned imported oil to heat houses sitting on one of the most geothermally active landmasses on earth. The heat was not scarce in any sense but one: it was not plumbed. That is a form and place problem, and within two decades the pipework had solved it. The resource never changed.

The figure. Five. The fifth — title — is the one most often skipped and most often decisive.

Why it matters. "There is not enough" has no handle on it. "It is in the wrong country, in the wrong chemical state, and the contract gave the title away in 2011" has three.

You already know this because you have searched a full house for something you definitely own.

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BRIEF 8 — Entitlement

The idea. People starve in the presence of food. Amartya Sen's Poverty and Famines established this against the standing model, and it is the strongest empirical evidence in existence that scarcity is positional.

An entitlement is the bundle of goods a person can lawfully command with what they have: their labour, their assets, their trade, their claims on the state. Famine is an entitlement collapse. It does not require food to disappear.

Worked example. Bengal, 1943. Food availability per head was not markedly below that of years with no famine. What collapsed was what a landless labourer's day of work could command, as wages lagged a price spiral. Now the counter-case: Maharashtra, 1972–73, where the fall in food output was proportionately far larger than Bengal's and mortality a small fraction of it, because a public employment programme held purchasing power in the hands of people whose crops had failed. Same physical shortfall. Different entitlement structure. Incomparably different outcome.

The figure. Two droughts, one larger physical shortfall, and the larger shortfall produced the smaller catastrophe.

Why it matters. The remedy for an entitlement failure is a transfer, and transfers are cheap, fast and well-evidenced. The remedy applied instead is usually production, which is slow, expensive and — in this class of case — beside the point.

You already know this because you have been short of money in a week when there was plenty of money in the world.

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BRIEF 9 — The Thermodynamic Floor

The idea. A few constraints really are physical, and there is a clean test for whether you are looking at one: compute the ratio of current practice to the theoretical minimum.

        headroom  =  current energy cost / thermodynamic minimum

A large ratio means engineering headroom and the constraint will yield. A ratio near one means you are at the floor, and no amount of cleverness, capital or good intention moves it.

Worked example. Seawater desalination. Thermodynamic minimum, about 1.06 kWh per cubic metre. Best reverse-osmosis plants today, about 3.5. Headroom: a factor of 3.3 — real, but bounded, and the remaining gains are the hard kind. Compare a coal-fired boiler at the point where combustion-to-electricity efficiency approached its Carnot bound: that constraint did not yield and the industry changed technology instead.

The figure. 3.3×. Enough to matter. Not enough to be unlimited.

Why it matters. It is the one honest way to tell a real limit from a habit. Most claimed limits, tested this way, turn out to have a headroom of ten or a hundred. The ones that do not are where research money should go, and the test costs an afternoon.

You already know this because you can tell the difference between a car that is badly tuned and one that is at the limit of what its engine can do, and you do not try to fix them the same way.

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BRIEF 10 — Jurisdictional Concentration

The idea. The most common real scarcity in a modern supply chain is not geological and not technical. It is that the material sits, overwhelmingly, inside one or two sets of borders.

Worked example — phosphate rock, USGS 2024. World reserves 74,000 Mt, of which Morocco holds 50,000 — 67.6 percent. World production 220 Mt in 2023, of which China mined 90 — 40.9 percent. Static life at current draw: 336 years. Resources: more than 300,000 Mt. By every quantity measure there is no shortage whatever. In 2008 the phosphate price rose roughly eightfold in fourteen months and smallholders across sub-Saharan Africa farmed that season without fertiliser.

The USGS's own flat sentence on the commodity: there are no substitutes for phosphorus in agriculture.

The figure. 67.6 percent in one jurisdiction, against 336 years of static life. The abundance and the exposure are both real and they are not in tension — they are answers to different questions.

Why it matters. This is the form of positional scarcity that abundance thinking handles worst, because every quantity figure says there is no problem and every quantity figure is true. The remedies are inventory, second sources, recovery from waste streams and long-dated contracts. None of them is a production remedy.

You already know this because you have had a single supplier for something essential and known, without needing a model, that it was a bad position to be in even while everything was fine.

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All figures in these briefs are computed in lib/verify/II_01.py and sourced in the chapter's Works Cited. Reserve, resource and production figures are from the U.S. Geological Survey, Mineral Commodity Summaries, January 2024.