Lion of the Blogosphere

Scarce goods in a post-scarcity economy

Land. There’s a fixed quantity of land. So if other people get richer but your income stays the same, the price of land will go up and become less affordable to you.

It should also be noted that people cluster together, and where people cluster together (like in cities), the price per acre of land is a lot higher. And where rich people live, land is more expensive than where poor people live.

Housing. Theoretically housing shouldn’t be that scarce (as long as there are enough natural resources to build houses) because you can always build more and squish them together and build vertically. But the reality is that in many places in the United States, whether because of zoning or because of a long lag between increased demand and the creation of housing to meet that demand, houses behave more like a fixed-quantity good just like the land beneath them.

Human labor. The total amount of human labor per capita is fixed. However, during the last several decades we have seen a drop in demand for United States labor because of higher labor productivity and outsourcing to third-world countries with much lower labor costs. But nevertheless, in the long run, labor intensive products like education, childcare, and healthcare will remain expensive. Unless we can replace teachers, doctors and nurses, and nannies with robots. I suspect that this isn’t going to happen in my lifetime.

Status. The amount of status per capita is also fixed. Only 1% can be in the top 1% of status. (I note once again that “status” is a term I use here, but people don’t normally think in the language of “how can I increase my status,” but rather they feel like losers if everyone else has an iPhone 6 and they don’t. The desire to be better looking, to have more friends, to have more respect, these are all status desires.)

Positional goods. These are goods that are valued because they are rare. Like a Gauguin painting. Or the artificial scarcity of luxury brands like Patek Philippe watches. These items have no intrinsic value (or an intrinsic value that’s a fraction of the sale price, for example a Timex watch tells time just as well as a Patek Philippe for 1/1000 of the price) except that they impress others or impress the owner.

The cost of these scarce goods and service is related to your relative wealth and not your absolute wealth. For example, if rich people’s tax is increased by 10%, the price of these goods will drop by 10% because all of the rich people have 10% less money.

Written by Lion of the Blogosphere

February 13, 2015 at 1:54 PM

Posted in Economics, Taxes, Wealth

65 Responses

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  1. great post! I’d say that political influence is a subset of status, or at least the two are very closely intertwined.

    cowabunga

    February 13, 2015 at 2:16 PM

  2. Raw materials: oil, natural gas, precious metals.

    McFly

    February 13, 2015 at 2:38 PM

    • I think you’re right. Raw materials is one that Lion left out, unless you could really stretch and define them as “positional goods” due to their rarity.

      cowabunga

      February 13, 2015 at 4:18 PM

  3. Sex

    Live-Evil/Lion of Judah

    February 13, 2015 at 3:16 PM

    • For you Manosphere guys out there, access to 9s and 10s are scarce.

      Nothing is scarce, when you have the privilege to access it.

      JS

      February 13, 2015 at 3:54 PM

      • Lucky for us curvy chasers that there are a lot of 9s and 10s.

        Dave

        February 13, 2015 at 5:56 PM

      • For you Manosphere guys out there, access to 9s and 10s are scarce.

        No, for them access to 5s and 6s are scarce.

        3s and 4s are about right for them.

        Those guys are delusional.

        Rifleman

        February 13, 2015 at 6:40 PM

    • Sex is a subset of status.

      cowabunga

      February 13, 2015 at 4:19 PM

      • Sexual desirability is a subset of status. Probably, people who claim they don’t care about status usually do care about their sexual desirability, that is if they are young. People get beyond that as they grow older. A lot of septuagenarians, for example, don’t care about their sexual desirability.

        Lion of the Blogosphere

        February 13, 2015 at 4:24 PM

  4. But nevertheless, in the long run, labor intensive products like education, childcare, and healthcare will remain expensive. Unless we can replace teachers, doctors and nurses, and nannies with robots. I suspect that this isn’t going to happen in my lifetime.

    hmmm perhaps it’s overoptimistic to assume automation will lower prices for services, because the market is accustomed to charging a certain amount, and that is how much people will pay. If with robots it costs $2 hour to nanny children versus $4 hour with humans, maybe prices will fall a little but not 50%.Despite technological advances and automation, healthcare has become more expensive, for example.

    grey enlightenment

    February 13, 2015 at 4:24 PM

    • If there is less jobs due to automation this means there is more supply of labour. This glut of labour should drive down the price of other jobs even if they cannot be automated.

      Workers have many other options than nursing today, but in the future if nursing is the only way to get a job, then you will have a lot more nurses. Then the hospital can pay less wages for nurses.

      nycisdirty

      February 13, 2015 at 5:28 PM

  5. the prevailing ideology from Keyrock:

    feudalism bad because only so much land.

    capitalism good because capitalist make land ex nihilo.

    ex nihilo nihil fit.

    Robert Gabriel Mugabe

    February 13, 2015 at 4:34 PM

  6. Housing prices should lower in a post-scarcity environment. With better public transportation like subways, high speed rail, hyperloop and self-driving taxis, people can live further away from the city center while still be able to commute there cheaply and in a reasonable amount of time. This will significantly increase the supply of land for housing in a metro area hence dropping housing prices. Plus developers will have more flexibility to bargain with the suburb which cuts the the best deal with the least tape since a city council actually has to compete with neighboring suburbs.

    nycisdirty

    February 13, 2015 at 5:25 PM

  7. I always think of “status” as it’s used in these Lion posts with an implied “social” preceding it.

    Jokah Macpherson

    February 13, 2015 at 5:42 PM

  8. Would you consider a major league sports team a positional good? Sure, they are a business and I suppose an analyst might make the case that prices for these teams can be rationalized by earnings and projected earnings, but when I see the price escalation of these things I’m reminded more of the price of paintings than anything else. BTW – I remember once reading an article or blog comment where the writer said that airlines were positional goods (though they may not have used that term) because so many buyers think of them as a sexy business and they want to own a sexy business. Same with bars and restaurants.

    Curle

    February 13, 2015 at 5:54 PM

  9. It’s hard to predict what will happen with urban land in a post-scarcity economy. Part of the reason land is so expensive in NY is that it gives access to high-paying jobs. It’s likely that in a post-scarcity economy, a lot of people would pack up and move South for the better weather. And either live off their Basic Income or telecommute.

    On the other hand, part of the reason land is expensive in New York is that it is high status to live near other high status people. In a post-scarcity economy, people will have a lot more money to spend on status-chasing.

    Each of these factors points in the opposite direction, so it’s difficult to say which will prevail.

    sabril

    February 13, 2015 at 6:35 PM

  10. Brilliant post, insightful and succinct. Understanding these arguments from reading Lion moved me away from some of the last remnants of libertarianism.

    Victarion

    February 13, 2015 at 6:38 PM

  11. When elites say labor is “high cost”, they mean “not free”. Child care is prohibitively expensive at little more than minimum wage for the not rich, but the rich don’t even want to pay minimum wage, they want a nanny for less.

    I suspect that due to this slavery will make a comeback amongst rich Americans, not just foreign Moslems. Domestics will be paid food, a closet to sleep in and a little spending money.

    thrasymachus33308

    February 13, 2015 at 7:10 PM

  12. Wood
    Firewood and for construction
    Water.
    Tools.
    Seeds.
    Land.
    and the means to defend.

    Imogen

    February 13, 2015 at 8:27 PM

  13. Example of this was Russian millionares buying lakeside summer cottages in Finland. Economically this was good for finns as there was Russian money coming as windfall to the finns that sold the lakeside properties, stimulating the whole economy. But it also meant that though middle income finns where richer and could buy more imported goods they were priced out of buying a summer cottage. I guess with more money finns could build a better equipped and bigger cottage, but the beautiful scenery by the lake became the scarce good that only the richest finns and Russian millionares could afford.

    That has now changed as Russians have trouble and are afraid to buy properties in EU countries.

    Paavo Ojala

    February 13, 2015 at 8:53 PM

    • Where’s Simho Hayha when you need him?

      Motti

      February 14, 2015 at 2:09 PM

  14. Only 1% can be in the top 1% of status.

    If you’re going to write bromides against the elite until they cave and bribe you into silence, at least get your damned math right.

    1% are 6 digit earners, AKA the upper middle class. Doctors, accountants, middle managers aren’t TOOS. They don’t own private jets, gather in Davos for global warming conferences, buy their children Porsches every few years, or manage EVPs (SVPs are worthless proles). Those who do are the 0.01% at most, probably 0.001%.

    The Undiscovered Jew

    February 13, 2015 at 9:32 PM

    • I would disagree. I think to be at 1% income you need minimum $400k. Most people who earn around 150k are nowhere near the 1%. In New york and California, 150k is barely middle class. Even most doctors don’t earn that anymore – only some of the specialists perhaps like heart surgeons or doctors that cater to the rich like dermatologist. Unless you an accounting firm or well into upper managment, most people are not earning above 400k. And that’s just income. Real wealth determines how rich you are, not how much you are earning.

      unam

      February 14, 2015 at 3:37 PM

    • I would disagree. I think to be at 1% income you need minimum $400k.

      1% are $300-350 thousand. But the upper middle’s income is deceptively skewed upwards because they’re grouped with the wealthy 0.1%, very wealthy 0.01% and super wealthy 0.1% and <= 1% and you end up with the low 6 figure upper middle class.

      The Undiscovered Jew

      February 14, 2015 at 9:47 PM

    • I would disagree. I think to be at 1% income you need minimum $400k.

      The 1 percent earn $300-350 thousand. But the upper middle’s income is deceptively skewed upwards because they’re grouped with the wealthy 0.1%, very wealthy 0.01% and super wealthy 0.1% and <= 1% and you end up with the low 6 figure upper middle class.

      The Undiscovered Jew

      February 14, 2015 at 9:49 PM

    • I would disagree. I think to be at 1% income you need minimum $400k.

      1% are $300-350 thousand. But the upper middle’s income is deceptively skewed upwards because they’re grouped with the wealthy 0.1%, very wealthy 0.01% and super wealthy < 0.01%.

      Restrict the range to those between > 0.1% and <= 1% and you end up with the low 6 figure upper middle class.

      The Undiscovered Jew

      February 14, 2015 at 9:50 PM

    • His math is right, TUJ. Only 1% can be in the top 1% of status. Just as only 20% can be in the top 20% of status, and only 1% can be in the bottom 1% of status, etc. Lion didn’t say anything about how well the top 1% are doing financially. Lion’s asssertion assumes that all people rank status the same way. If people rank status differently, then any number of people can be in the top 1% of status, depending on whose metric you use. But if you were to get a general status consensus, then only 1% can be in the top 1%, logically speaking.

      Commenter Jackson

      February 15, 2015 at 11:58 AM

    • But if you were to get a general status consensus, then only 1% can be in the top 1%, logically speaking.

      Sure, but Lion usually uses 1% to mean TOOS, when really whom he’s referring to are the 0.1%, or rarer.

      The Undiscovered Jew

      February 15, 2015 at 4:10 PM

      • I have a few clients who would be considered TOOS to some of the naive readers here. $500K to a $1 million in annual salary, residing in NYC is not TOOS, by any stretch of the imagination.

        I perceived TOOS as those with optimum success, in terms of schooling, career and income without worrying about class/status drifting to a lower rank. Starting point would be the 3 digits millionaires in net worth. Anyone with less, doesn’t qualify.

        JS

        February 15, 2015 at 5:00 PM

      • Right – but this is the point in the first place – American class warfare has always been farcical, primarily because the lowest echelons of the 1% are always the most willing to argue and thereby become targets, while the 0.1 and 0.01% walk away with the necessary tax loopholes they need to maintain transgenerational wealth. Surely you do realize that this isn’t an accident…right?

        Negro of the Bongosphere (formerly Viscount Douchenozzlé)

        February 15, 2015 at 5:51 PM

      • $500K to a $1 million in annual salary, residing in NYC is not TOOS, by any stretch of the imagination.

        For New York, $1 million usually qualifies as upper class; $500,000 is within striking distance of upper class.

        Surely you do realize that this isn’t an accident…right?

        Of course it’s no accident. Additionally, the 0.01% and 0.001% aren’t numerous enough in absolute terms to provide the tax revenue liberals need for their endless social engineering/’research’ grant schemes. They have to shakedown the greater number of low 6 digit earners to meet their ‘non-profit”s budgets.

        The Undiscovered Jew

        February 15, 2015 at 8:19 PM

      • TOOS = 100 million or more, in net worth

        JS

        February 16, 2015 at 11:58 AM

      • In New York $1mil salary means you just get into the door.

        The real TOOS do not have to care about such prole thing like salary. If you need to draw a salary, no matter how much, you are not upper class.

        toos is god

        February 16, 2015 at 1:45 PM

  15. Could this blog have some commentary on the Aaron Hernandez trial?

    Latias

    February 13, 2015 at 9:49 PM

    • Aaron is a Guidospanic (part Italiano, part Boricua, probably with a small subset of negro genes from his Puerto Rican Side). Italians and many Hispanics get along well. Both are about being prolish and working class. And many of them hate blacks.

      He killed a black dude. And your question is?

      JS

      February 14, 2015 at 10:53 AM

      • Hernandez has an attractive black girlfriend who has stayed by his side and attended his court hearings. I’m not sure he hated blacks as it seems like his social circle was mostly blacks and he tatted himself up heavily like many blacks. Hernandez allegedly killed one black guy because Hernandez felt that the guy disrespected Hernandez in a club.

        E. Rekshun

        February 14, 2015 at 7:11 PM

      • So the trial isn’t that interesting. Any relevant comparisons to the OJ trial.

        Latias

        February 14, 2015 at 9:56 PM

      • Many proles who associate with blacks like the liberal panderizers, will come to the realization that most prole blacks are up to no good, as they become miscreants over and over again. Liberals are oblivious to this fact, because they have a black male token friend, usually who is usually better off than the ones that befriend proles.

        Out of all the Hispanics, Puerto Ricans are the most likely to befriend blacks, but that’s changing now, due to the fact that blacks are pretty much a lost cause in American society, where everyone else has gotten more educated, more income, more this and more that.

        If Caribbean Hispanics in NYC, who speak poor English and run bodegas that caters to organic induced hipsters, what does that tell you of blacks in terms of the “American Dream”?

        JS

        February 15, 2015 at 3:23 PM

    • Who cares?

      Negro of the Bongosphere (formerly Viscount Douchenozzlé)

      February 15, 2015 at 5:51 PM

  16. I see that Lion is going back to economic basics. He is a smart guy, maybe smarter than me, but he left out what smart guys almost always leave out.
    Time is the economic variable that puts all other variables to shame. There are few people, celebrities, sports stars, Buffetian robber barons, artists, or “regular guys” or “soccer moms” (although the soccer Moms from the day when the phrase was new – the sad days of Bill Clinton’s electoral triumphs and Bill Clinton’s evasions of civil and criminal liability – are now, at best, soccer “grandmoms”) who would not, if they knew what was good for them, pay many years worth of salary to go back in time and marry that twenty something “5” from 1985 (or, for the really high SMV people, that 6 or 7 or more) who was a nice girl who would have been a good wife (or vice versa, women make this mistake as often as men). Lion and similar bloggers should write more often about the fives who got away….Although maybe there a lot of people, on the one hand, who wanted to hook up with nice fives or fours or threes, in their twenties, and who got repeatedly rejected, and a lot of people, on the other hand, who figured these things out early and would hate to go back in time because they got everything right the first time around. I wonder how many of them post on HBD blogs …

    what would ernest borgnine do

    February 13, 2015 at 10:04 PM

    • Good observation.

      Curle

      February 14, 2015 at 1:46 AM

  17. Consider the Dodge Hellcat. It’s a very limited edition of the Dodge Challenger coupe, only a couple thousand being built each year, with a ridiculous 707 horsepower. It is so powerful that it’s dangerous to drive unless you are a trained race driver. Dodge has priced the Hellcat at $60,000, but demand is so high and supply so limited that “stealerships” are charging $100,000. And getting it.

    Peter

    ironrailsironweights

    February 14, 2015 at 11:16 AM

    • This is a result of stupidity, not scarcity. There are $4,000 kits for $25,000 used Corvettes that will give you the same. You’re simply observing that there is no scarcity of stupidity in America, which is not exactly a new observation.

      Negro of the Bongosphere (formerly Viscount Douchenozzlé)

      February 15, 2015 at 5:54 PM

  18. We’ve been in a “post-scarcity” economy ever since the first hunter gatherer killed one more rabbit than he needed for food.

    SJ

    February 14, 2015 at 2:07 PM

    • Except in Ethiopia.

      Bobongo

      February 14, 2015 at 3:08 PM

  19. Slightly O/T – Lion, this morning I saw scores of black men in Manhattan buying flowers on Valentines Day, and no other types of men doing the same.

    Can we call it low future time orientation, for a high value positional good (flowers via sex)?

    * btw, despite the pompous Manhattan high life, the island is still infested with a lot of undesirables (blacks in most cases).

    JS

    February 14, 2015 at 3:14 PM

    • * (sex via flowers)

      JS

      February 14, 2015 at 3:20 PM

    • white guys buy flowers a day before, to get a better selection and give the flowers time to open and look good

      Anonymous

      February 16, 2015 at 8:16 AM

  20. A post-scarcity economy is impossible because there is always something that can be made or invented as scarce.

    Kant

    February 14, 2015 at 8:05 PM

    • One of the few times I’ve agreed with you. Lion’s post argues that there is scarcity in land, housing and status. Ironic, given the title he chose.

      destructure

      February 15, 2015 at 1:43 AM

    • The things Lion lists are scarce because they can’t be produced. In, say, the 1950s the US could produce so many goods that compared to the 1200s you might as well call it post-scarcity, but if a huge portion of US workers stopped working then those goods would no longer be produced, so the 1950s weren’t post-scarcity. But now a huge portion of US workers could stop working and the goods would still be produced because of foreign factories owned by US companies and automated labor, and this will only increase. So the goods would keep being produced for consumption in the US without the people working, so post-scarcity is appropriate.

      chairman

      February 15, 2015 at 4:06 PM

  21. The amount of status per capita is also fixed. Only 1% can be in the top 1% of status. …

    This isn’t entirely true because there isn’t universal agreement about who is in the top 1%.

    James B. Shearer

    February 15, 2015 at 12:10 AM

  22. It’s obvious that Leon’s real beef with rich people is that they can afford things he can’t. I don’t care for the ostentatious displays, either. Or the attitudes. But my objection is to the displays, attitudes, misplaced priorities and political views; not the money. Not to mention how many rich people have no class. Class has nothing to do with money. In fact, there are few things more classless than wealth showing off. This video of instagrams by “rich kids” shows what I mean. Plenty of money but no class. If one has money then they should have an extra does of humility to go with it. Otherwise, they’ll look like a jerk and be hated.

    destructure

    February 15, 2015 at 1:41 AM

    • “It’s obvious that Leon’s real beef with rich people is that they can afford things he can’t.”

      Well yes, that is ALWAYS EVERYONE’S beef with rich people. Or that they can afford things other people than oneself can’t. It’s a perfectly valid reason to have a beef with them too.

      chairman

      February 15, 2015 at 12:19 PM

    • Those items are what the well off Joisey Shore Gweedos with their spendthrift ways would buy. Prole and prole over again!

      JS

      February 15, 2015 at 4:01 PM

      • By the way, Lion, do you think the Diamond District in Manhattan is prole? I think so.

        JS

        February 15, 2015 at 4:03 PM

  23. a timex watch would likely tell time better than a patek phillipe, as quartz watches are superior to watches that use mechanical mechanisms to tell the time.

    james n.s.w

    February 15, 2015 at 3:57 PM

    • The Citizen Eco Drive tells the best time, because the battery never runs out. But be careful, many Citizen watches look very prole.

      Lion of the Blogosphere

      February 15, 2015 at 4:15 PM

      • agreed that a lot of citizen watches look very prole. the more elaborate ones with the dressed up faces that have a lot of gewgaws and doodads all over them in particular look like cheap imitations of higher end sports watches like the omega speedmaster. the only thing worse than a lot of citizen watches are mid-tier watch brands TAG heuer which invariably have gaudy, dated and ostentatious designs.

        i have a citizen quartz watch i bought for $120. i’m not really a fan of the roman numerals on it but i liked its minimalist design on top of its low price.

        james n.s.w

        February 16, 2015 at 5:17 AM

    • I wear a watch for one reason: it gives me a way to know what time it is so that I can easily make an excuse when trying to get away from someone tedious. This is difficult to do gracefully if one needs to pull out a phone, but today, this is the only good reason to wear a nice watch beyond its value as a status symbol. If you care about how well your watch tells the time, you’re missing the point.

      Negro of the Bongosphere (formerly Viscount Douchenozzlé)

      February 15, 2015 at 5:57 PM

  24. No matter what, toos will always be toos because they are the ‘chosen ones’. They call the Jews the Chosen ones but the prole hasidim would probably want to disagree.

    toos is god

    February 16, 2015 at 1:41 PM

  25. Lion has finally emphasized looks at a measure of status, which some of the readers here, believe social status is all about wealth and credentials.

    JS

    February 16, 2015 at 7:17 PM

  26. It seems like Asians are the biggest status worshipers and have “outproled” prole spenders in America, with their frivolous spending.

    http://www.scmp.com/business/money/spending/article/1372775/asian-americans-outspend-other-us-households-nielsen-study

    JS

    February 17, 2015 at 2:06 PM

    • Asian households spend more money because they have more money to spend in the first place. Think of all those Indian H1Bs making $70,000/year as computer programmers and their wives make $50,000 working in QA. They have a lot more income than most Americans, so they spend more.

      Lion of the Blogosphere

      February 17, 2015 at 2:09 PM

  27. Time is the ultimate scarce resource out there – I’m kind of surprised you overlooked that one. Whether or not it will remain so in a post-scarcity economy could be an interesting topic for you to develop sometime.

    SW EU Man

    February 18, 2015 at 6:24 PM


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