Scarcity in economics is sanctioned on the belief that human and nonhuman resources are finite. We produce only a limit amount of goods and services, given the resources and technology at hand, and that includes the finite number of us.
Because scarcity limits production, should we assume it limits wealth, too? The inquiry is reasonable enough. After all, no one is so privileged to perpetually have what he wants when he wants it or be wherever he wants whenever he wants. Scarcity, the economists pontificate, demands we ordinally rank our wants and then decide how best to allocate our finite resources to satisfy these wants to achieve the greatest satisfaction.
All I’ve said so far is the stuff of economics 101. It’s understood and accepted without complaint, especially by the econ 101 student whose primary concern is to receive a passing grade so as not to repeat econ 101. As someone who has received a passing grade, I, nevertheless, will complain. I dislike the word “scarcity.” I dislike it because of the other words it conjures. Words that convey most everything negative and most everything wrong: shortages, privation, depletion, even poverty. Wander through the aisles of any big-box retail outlet, scarcity is the last word that comes mind (at pre-Covid).
Worse yet, the premise belying the word scarcity is simply wrong, even if physics says its right.
The earth’s diameter is approximately 8,000 miles; its circumference, approximately 26,000 miles. Unlike the universe, ever-expanding, the astrophysicists claim, the earth’s dimensions remain constant. The laws of physics, therefore, dictate that the resources that constitute a constant, defined earth must be finite. To cram the infinite into the finite would violate the laws.
True enough, I suppose, but why does the empirical evidence suggest otherwise?
What natural resource – particularly that of the putatively non-replenishable, hard-commodity variety – have we consumed to extinction? The history of the industrial age contradicts the concept of the finite, the scarce: the more we use, the more we find, the greater the reserves we develop. The price trend for commodities in aggregate over the past 200 years is down. That’s hardly an indicator of scarcity. It points to abundance more than anything.
And when market prices rise to suggest that a systemic shortage in a particular resource is emerging, ingenuity arises to develop substitutes as good, if not better, than what it replaces: petroleum supplants whale oil, fiber optic supplants copper. Every nihilist’s predication declaring the end of whatever resource has failed to materialize.
Surely, surface land is finite. The earth’s surface is about as constant and defined as it gets. Finite in mass, that is, but that observation alone fails to negate the possibility of infinite production.
A hundred years ago, a hectare of farmland produced two metric tons of corn. It produces ten metric tons of corn today. Jonathan Swift should take a bow. The Anglo-Irish satirist was ahead of his time when he wrote 300 years ago that “whoever could make two ears of corn or two blades of grass to grow upon a spot of ground where only one grew before, would deserve better of mankind, and do more essential service to his country than the whole race of politicians put together.”
The word scarcity conjures something even more insidious than the finite. That would be the zero-sum game.
People who know not of what they speak – politicians, college professors, journalists, man on the street – analogize business transactions with sporting events. In sports, you win, I lose. The same holds in the business transaction, the influencers assume. Their zero-sum-game analogies imply that if you drive a Porsche than I must drive a Kia (or nothing). You win, I lose.
But sports and business are unalike in both degree and kind. In capitalist economies, we are far more likely to cooperate than to compete. In the voluntary business transaction, we always cooperate. You win, I win. Capitalism demands that it be no other way because the parties to the transaction demand it be no other way.
Money is the root of all evil? Not as evil as the prevaricating propaganda perpetuated by a culture of scarcity. We are locked in a culture of scarcity and its corollary, zero-sum mindset, because of this prevaricating propaganda.
The scarcity culture begs for the interventionist, the referee, the arbiter. Someone who will right the zero-sum-game wrong. No individual engenders all three attributes to the extent of the government bureaucrat. The bureaucrat sees nothing but scarcity, and, of course, its corollary, inequity, through the lens framed in the zero-sum game.
Now, follow the money. The bureaucrat benefits from the scarcity culture more than most because the culture validates his role as equalizer. If you have more than the bureaucrat deems fair, deemed by the most arbitrary of measures, you’re strong-armed through taxation to disgorge a portion of your bounty so that the bureaucrat can distribute, by considerations that benefit the bureaucrat, your property to someone deemed impaired due to no fault of his own.
The bureaucrat is equally zealous in promoting the welfare of his partners in crime. Cottage industries arise that exist on the admonition to conserve and recycle and forgo. The industry participants realize soon enough that by soliciting the aid of the bureaucrat they can be assured a customer base captured through legislation, thus bypassing the inconvenient, uncertain, expensive means of acquiring customers through persuasion.
Economics would be better served to jettison the concept of scarcity and replaced it with the concept of constrained. Resources are constrained, not scarce. They are constrained by a dearth of entrepreneurship, energy, alertness, curiosity. They are constrained by the edicts that ensconce the bureaucrat, protect the status quo, penalize success, and inhibit the development of new ideas.