If you could choose between a pile of salt and a pile of gold, you would probably choose the gold. After all, you know that you can always buy a container of salt for about five rands at the local supermarket.
But what if you could not easily get salt, and without it you could not survive? In fact, throughout history salt has been very difficult to obtain in many parts of the world, and people feared a lack of salt the way we in the industrialised world fear a shortage of petrol.
Once cultures began relying on grain, vegetable, or boiled meat diets instead of mainly hunting and eating roasted meat, adding salt to food became an absolute necessity for maintaining life.
Throughout history, many people have chosen a pile of salt instead of a pile of gold. Gold is pretty, but you cannot live without salt, and when it was more scarce than gold, it became valuable enough to use as a currency itself. (The word “salary” is even related to the Latin for “salt.”)
In olden time of Rome, the warriors serving the empire were payed with a handful of salt each day. Later, the officers in charge of distributing salt started finding the transport and preservation (from rain etc.) of the huge bulk inefficient, hence, the reward of salt was replaced by a sum of money allowing each man to buy his own.
The money thus received was referred to as their ‘salarium’ (Latin) or salt-money. The term salarium entered into English which modified to modern day salary.
Today, of course, salt is close to worthless. Given the choice between a pile of salt and a pile of gold, you would go for the gold every time, because there is less of it around.
Scarcity, it seems, has a lot to do with value.
Today we are running out of a lot of important things; clean water, free time, breathable air, the ozone layer, and honest leadership, just to name a few.
At the same time, we have to worry about something that is about to affect just about every business I can think of. We’re running out of scarcity.
Scarcity, after all, is the cornerstone of our economy.
The best way to make a profit is by trading in something that is scarce.
This is why the music and movie industries are so terrified by the millions of people who download entertainment from the Internet every day. Downloading threatens to make supply virtually unlimited, and that therefore makes the sale of CDs less lucrative.
Are your offerings becoming more in supply [salt], or are they becoming scarce to find [gold]?
Humans place higher value on objects that are seen as rare or hard to obtain.
Create demand by creating scarcity.