Scarcity

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Contents

Citation

Alan Rosenblith:

"Some would say that while non-rival goods like information are not inherently scarce, rival goods like oil are. I disagree. There is the amount of oil that there is. It is neither abundant nor scarce. It just is. What makes us perceive oil as scarce are the humsn systems we have built that create a context for it." (http://alanrosenblith.blogspot.com/2010/09/scarcity-is-illusion-no-really.html)


Typology

Economic Scarcity

"In economic terminology, "scarcity" refers to the fact that the same resource - regardless of its quantity - cannot be put to more than a single use at a time. Scarcity in an economic sense refers simply to the choice as to what use to put a specific resource, not to the quantity available. Most schools of economics, following the paradigm of Thomas Malthus, implicitly equate economic scarcity with insufficiency, and erroneously conclude that insufficiency is inevitable. Technological change, however, according to critics of Malthus, makes shared abundance a plausible goal of development theory, offering hope that world poverty is a solvable problem.


Effective Scarcity

The popular understanding of "scarcity;" that is, the quality or condition of insufficiency. In non-binary economics, effective scarcity exists as an unyielding constraint on growth and development. Binary economics holds that the constraints of scarcity can be overcome by invention and more efficient exploitation of existing resources through the process of "ephemeralization," the redesign of our technologies to "do more with less." (See "Ephemeralization".) TOP^


Post-Scarcity

Any arrangement or transformation of an economic system that helps overcome the constraints of insufficiency or effective scarcity. This is not a rejection of economic scarcity, but a refutation of the assumption that effective scarcity is inevitable. In binary economies, any insufficiency resulting from economic scarcity can be overcome through substitution or improvements in technology. Thus, Louis Kelso can be termed a "post scarcity" economist for devising a logical framework and comprehensive strategy for harnessing voluntary private-sector initiatives to overcome the artificial constraints to shared abundance. The post-scarcity challenge of the 21st Century is to restructure the social order through acts of social justice to overcome basic social and economic problems." (http://www.cesj.org/definitions/glossary.html)


Discussion

Scarcity and the typology of goods

Herman Daly:

"There are two sets of important distinctions about goods, and they make four cross-classifications. Goods can be either rival or non-rival, and they can be either excludable or non-excludable. My shirt, for example, is a rival good because if I’m wearing it, you can’t wear it at the same time. The warmth of the sun is non-rival because I can enjoy the warmth of the sun and everyone else can enjoy it at the same time. Rivalness is a physical property that precludes the simultaneous use of goods by more than one person.

Goods are also excludable or non-excludable. That’s not a physical concept, that’s a legal concept, a question of property. For example, you could wear my shirt tomorrow if I let you, but that’s up to me because it’s my property. My shirt is both rival and excludable, and that’s the case with most market goods. Meanwhile, the warmth of the sun is both non-rival and also non-excludable. We cannot buy and sell solar warmth; we cannot bottle it and charge for it.

Goods that are rival and excludable are market goods. Goods that are non-rival and non-excludable are public goods. That leaves two other categories.

Fish in the ocean are an example of goods that are rival and non-excludable. They are rival, because if I catch the fish, you can’t catch it. But they are also non-excludable, because I can’t stop you from fishing in the open seas. The management of goods that are rival and non-excludable gives rise to the famous tragedy of the commons – or the tragedy of open-access resources, as it’s more accurately called.

Now, the other problematic category consists of goods that are non-rival and excludable. If I use the Pythagorean Theorem, I don’t prevent you from using it at the same time. Knowledge is non-rival, but it often is made excludable through intellectual property and patent rights.

So those are two difficult categories that create problems. One is the tragedy of the commons, and the other we could call the tragedy of artificial scarcity." (http://peopleandplace.net/featured_voices/2010/10/19/sustaining_our_commonwealth)


Scarcity under a price system

The reason why there is inherent scarcity is not because of physical restraints in the territorial base, according to the economist, but has more to do with the consumer demand. The assumption is that all demands are equal, that for example the needs of a single mother in a favela in Saõ Paolo in Brazil, is equal to Jay Leno's wants of a 611th Chrysler with gold plates from year 1958.

In this model, all demands are absolutes and all other infringements upon the demands except poverty are seen as unacceptable as they lead to "inefficiencies". According to this model, as earlier stated in my article about Energy Accounting, all human needs and wants are equivalent to each-other, and all needs and wants are without any borders, i.e, human beings always want to possess more and more.

Thus, scarcity is actually relative in this model, as a knight with a silver plate armour would envy the knight with a golden plate armour, and it is inherently based on subjective judgements about value, rather than physical scarcity in itself.

Thus, when economists and technocrats are talking about scarcity, the economist is talking about something which is going on inside a person's head, while the technocrat is talking about the physical constraints of a particular geographical zone. How much fresh water there is, how many minerals, how much capacity to grow food. For the economist, the important thing is rather "how much are people willing to work to get hold on these resources,

Thus, relative scarcity according to the economist will always be absolute." (http://en.technocracynet.eu/index.php?option=com_content&task=view&id=155&Itemid=137)


Oppressive Scarcities

Book Source: Wolfgang Hoeschele. The Economics of Abundance: A Political Economy of Freedom, Equity, and Sustainability. pp. 19-20

Wolfgang Hoeschele:

"The discussion in Chapter 1 claims that needs and wants can be consciously generated in order to create profitable scarcities. However, it is important to go beyond such general claims and systematically examine the various methods of scarcity generation. Scarcity, we must remember, is the condition when available goods do not meet current demands. There are basically three ways in which scarcity can be generated. First, the total amount of a good or service can be reduced. For example, the expansion of market activities may reduce the amount of goods provided by nature (such as clean air) or by nonmarket mechanisms (for example, self-provisioning of food, free exchange of knowledge), or those that result from the absence of commercial activities (such as silence and open space). Second, barriers can be placed between people and a good. Of potentially many ways to obtain that good, only one or a few may be left available, leading to the creation of a bottleneck. People can be made to pay in various ways for taking goods through the bottleneck. An example of this mechanism is the elimination of diverse forms of movement to the point that “mobility” is reduced to the use of a privately owned car. Monopolies also fit into this category of scarcity generation—a particular good is available, but must be purchased from a single seller. Third, new wants or needs can be created, or existing ones modified, so that demand for a commodity exceeds supply—for example, by means of advertising, ideological indoctrination, or legal standards. All three basic mechanisms not only increase scarcity, but also curtail freedom by forcing increased expenditures on people and reducing available options of how to satisfy their needs.

Throughout history, we can conceive of social power as having been based in part on the construction of scarcity, but the methods of producing scarcity have continuously changed as a result of changing social circumstances, new technologies, and differing natural environments. Every historical period is characterized not only by varying combinations of methods to create scarcity, but also by specific ways of institutionalizing these methods—that is, its own scarcity-generating institutions. In this chapter, I begin the discussion with several such institutions which are normally considered neither economic nor modern, but which continue to persist and interact with modern economic institutions. Any attempt to avoid the scarcities invented in modern times should also avoid the scarcities created by these older institutions—romanticizing the past will not lead us forward. What these institutions have in common is that they explicitly prohibit people from engaging in certain types of behavior or expressing deviant thoughts, often based on the “station in life” into which they were born. In a word, they oppress."

Key Books to Read

Recommended by Dougald Hine:

  • In Illich's own work, Toward a History of Needs (1978) marks the emergence of a theme which runs through his later work. By focusing on "the sociogenesis of needs" (as he puts it in this article, written for the 20th anniversary of the Whole Earth Catalogue), he brings a historical perspective to the demand side of the scarcity equation.
  • Michael Perelman, Marx, Malthus, and the Concept of Natural Resource Scarcity (1979).
  • John Kincaid, 'Of Time, Body, and Scarcity: Policy Options and Theoretic Considerations' (1983).
  • Nicholas Xenos's Scarcity and Modernity (1989).
  • The Limits to Scarcity: Contesting the Politics of Allocation, edited by Lyla Mehta, is a collection due out in late 2010 which looks very interesting.



More Information

General:

  1. Abundance vs. Scarcity ; Artificial Scarcity;
  2. Pre-Scarcity: a prior phase of human history before the Scarcity paradigm became dominant.
  3. Post-Scarcity ; Post-Scarcity Age ; Post-Scarcity Fiction


Specialized:

  1. Monetary Scarcity: the current monetary system is based on artificially creating scarcity.(Bernard Lietaer) on the artificial scarcity of the present money system
  2. Monetary Sufficiency - Non-scarcity based monetary systems
  3. Ludocapitalism and the scarcity in gaming worlds
  4. Abundance vs. Scarcity Mentality: the subjectvive aspects of abundance and scarcity.
  5. Against the artificial scarcity induced by IP law
  6. Post-Scarcity Anarchism
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