Let's pretend I own an orange tree that produces unlimited oranges - whenever someone picks one, another instantly grows in its place. Now imagine that I live in a village with 100 people, and from market research I think there is a demand for 50 oranges. As the tree owner, I have the right to distribute my oranges as I see fit. I can sell exactly 50 oranges, I can flood the market with 500 oranges, or I can sell only a few and create a scarcity. Sure, it would be a completely artificial scarcity, but it doesn't matter if it is artificial because as the tree owner I have the right to sell as many or as few oranges as I want.
But then one day some guy decides he's going to pick oranges from my tree at night and hand them out to the villagers for free. I haven't lost any oranges, it's true, but I'm still screwed out of the true value of my tree.
Why? Because the guy jacking my oranges is damaging my scarcity power.
By handing out an unlimited number of my oranges for free, my oranges have lost almost all of their value. It doesn't matter that there are theoretically infinite oranges - it is my right to control their distribution because the value of my oranges is largely based on their relative scarcity. Mr. Orange Robin Hood is causing demand for my product to be obliterated by oversupply. And no matter how nice and accommodating I am to my customers, I will never be able to compete with the orange snatcher so long as he continues to have free access to my tree. I could deliver the oranges to customers' homes for no cost, I could slash the price to pennies, but whatever my competitive effort "X" is, the orange thief's method is always "X minus one".
But then one day some guy decides he's going to pick oranges from my tree at night and hand them out to the villagers for free. I haven't lost any oranges, it's true, but I'm still screwed out of the true value of my tree.
Why? Because the guy jacking my oranges is damaging my scarcity power.
By handing out an unlimited number of my oranges for free, my oranges have lost almost all of their value. It doesn't matter that there are theoretically infinite oranges - it is my right to control their distribution because the value of my oranges is largely based on their relative scarcity. Mr. Orange Robin Hood is causing demand for my product to be obliterated by oversupply. And no matter how nice and accommodating I am to my customers, I will never be able to compete with the orange snatcher so long as he continues to have free access to my tree. I could deliver the oranges to customers' homes for no cost, I could slash the price to pennies, but whatever my competitive effort "X" is, the orange thief's method is always "X minus one".