A dear friend and I once spotted a starling flitting around in the grass. On looking at its glistening wings, my friend remarked – ‘these birds would be magnificent if they weren’t so common’.
His words hint at one of scarcity’s several ironies. A bird whose feathers glow with a multicoloured metallic sheen is magnificent. And yet, common starlings aren’t what most birders include in their ‘magnificent’ lists.
Even as a bird loses its majesty by being too common, rare objects can attain astronomical value despite being defective. A US penny from 1969 that was mistakenly struck twice is worth around $75,000. The manner in which a defect multiplies a coin’s value a million fold is another of scarcity’s ironies
Our mind’s affinity towards scarce bits of metal comes from a mental shortcut – if it is scarce, it must be valuable. This shortcut is often true, and serves us well in several situations. Knowing a rare craft or wielding a rare instrument lets you charge a premium. Like most mental shortcuts though, this tendency also leaves the door open for manipulation.
Real-estate agents wield scarcity only too well. When an agent encounters a particularly indecisive customer, she would inform him of a wealthy buyer (‘an out of state businessman buying for tax purposes’) paying a visit the next day. Given this news, the fence sitter who had deferred a decision for six months comes up with the money within 6 hours. The agents refer to this tactic as goosing ’em off the fence.
As deadly as scarcity might seem in the wrong hands, one can defend against it. Scarcity is a state of mind. If we aren’t collectors, that double struck coin being auctioned for $70,000 would hold no sway over our purse strings. If we aren’t desperate to purchase a house, no fictitious tax evader can rattle our resolve. The party who wants the deal the least has the most leverage in any negotiation. There goes another one of scarcity’s delicious ironies.
From diamonds to defective dimes, much of what is sold as scarce is artificial. To see through this subterfuge is to discern what is truly scarce from something that is merely a scare.