Peter Drucker Interview

WSJ has republished a 2000 interview with Peter Drucker, who died recently:

WSJ: You also said the scarcity axiom was becoming obsolete. Do you mean the idea that things have value only insofar as they’re limited in supply?

Dr. Drucker: What I mean is that the scarcity axiom does not pertain to information. Let me give you two examples, one where they understand this and one where they don’t. I will not give company names.

There is the company that gave you the map and driving direction you used to get from the Los Angeles airport to my home; you go to the Internet, and they don’t charge a penny. They make their money from advertising, which you have to look at to get these directions. They understand that the scarcity axiom does not apply to information because they can keep giving away information and receive more revenue in another way.

On the other hand, there is a major newspaper, one I am very fond of, which believes in selling subscriptions to the online edition of the paper, which is a total misunderstanding. It should be given away to create a larger subscription base.

This first company understands information, the second one has yet to learn.

Economics holds that if you sell something, if you transfer something, you no longer have it. That does not apply to information. On the contrary, you have no information, basically, unless you share it. Sure, of course, you try to keep strategic information to yourself. But when your product is information, information accrues as you release it.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.