The Long Tail is all about abundance: the economic effects of infinite shelf space. Unfortunately, neoclassical economics has virtually nothing to say about abundance. Indeed, the economics of abundance is almost exclusively the domain of extropians, a few other transhumanists, and science fiction writers. How can this be?
Well, for starters the classic definition of economics is “the science of choice under scarcity”. That’s a warning sign right there. From Adam Smith on, economics has focused almost exclusively on behavior within constraints. My college textbook, Gregory Mankiw’s otherwise excellent Principles of Economics, doesn’t mention the word abundance. And for good reason: if you let the scarcity term in most economic equations go to nothing, you get all sorts of divide-by-zero problems. They basically blow up.
Read full article by Chris Anderson at http://longtail.typepad.com/the_long_tail/2005/03/the_tragically_.html