If lacking the resources to live well is the fundamental problem that economics is supposed to solve, then surely the economics of consumerism has become part of the problem. As one want is satisfied, another one is created. The result is poverty rather than wealth — an economics of scarcity rather than abundance. From the idea that scarcity is created rather than naturally occuring in response to unlimited wants, Hoeschele unravels the whole political economy of capitalism, and then attempts to re-create something more fair, more healthy, and more sustainable.
There are several ways that scarcity is generated: 1 creating new wants, 2 limiting access to a resource, or 3 reducing the amount of the resource available. Society is full of scarcity-generating institutions using one of these three methods.
Fashion creates new wants all the time. Patent systems put fences around innovation and knowledge, granting monopolies. Interest makes money more scarce than it should be. Industry pollutes the air, making fresh air more scarce. These scarcities are what drives the economy. Having explored the systems and consequences of the production of scarcity, Hoeschele turns towards solutions and the production of abundance instead.
How can we use less and redistribute the resources we free up? How should we manage resources, especially the non-renewable ones? Here is where the book takes a slightly unexpected turn. Instead, he argues, we should consider everyone to be like artists, out to live their lives as a creative, self-actualising project. There are some great ones, around civil rights, equality, and resource management, but however good the individual ideas may be, I was disappointed with the underlying philosophy. It errs towards the individual and lacks a vision for community or society. The idea is that everyone has their own view of enough, their own definition of what a flourishing life will entail.
But can you run an institution on that basis? Can you structure a government whose primary purpose is empowering people to live life as art? Steady state economics, the wellbeing agenda, equality advocates, all these movements seem to converge on the same sorts of policies — reducing the work week, co-ops, local currencies, restrictions to advertising, microfinance. Excellent — I remember thinking similar things when teachers taught me about economics in High School — the basic foundations of it were clearly wrong.
The idea of capitalist institution being the science of profitable allocation of scarcity is very powerful. A radical text with a thought provoking argument. As opposed to other sharing websites ecoSharing.
This is the kind of thinking that the citizens of Bhutan have modeled their campaign of national happiness upon,. We all known that dere is a difference between need and want. Wants have to be endlessly created in order for the economy to keep ticking along. You are commenting using your WordPress.
If anything we seem to have an abundance of food and manufactured goods, and the cost of moving and manipulating information has fallen very very sharply. I am two-handed on this issue.
On the one hand, just because food, say, has become more abundant does not mean that we can ignore scarcity. At any moment in time, for a given state of know-how, the conventional definition of economics as dealing with the allocation of scarce resources among competing ends applies. On the other hand, some of the most interesting economic observations concern relative abundance. Look at our standard of living compared to years ago. Look at South Korea compared with North Korea.
I think that there is a market opportunity for a book that can fix that. It was remarked somewhere not too long ago that one of the crucial lessons economists teach non-economists is that everything involves trade-offs. I believe everything Gary Becker ever studied did involve trade-offs. It is true that food is not a scarce commidity, but it would be very scarce with me if I did regularly buy it. Likewise, even when there is a labor surplus, an employer who stops paying his employees will find that workers are scarce in his business.
So scarcity or the prospect of it , even of goods which are not themselves scarce in the economy as a whole, does drive economic activity. The key point is that people must engage in economic activity to avoid scarcity, not that scarcity continually plagues those who do engage in economic activity. In my first day of my Microeconomics class I was told that the economy had 2 problems. The first one is scarce resources and the other unlimited wants.
Everyone knows that human resources are limited. First, suppose there is a heaven — would there be scarcity up there and would we need economists? Thanks for the Lucas quote.
Raghunathan: I'm not trying to argue in the book that the scarcity mindset is either shallow or completely useless. Your why always comes from living in the now. They might go around with feelings of deep insecurity. It is a phenomenon with roots deeper than our money system, for it depends on the prior quantification of time. The Secret To The U.
I always thought that economics was the study of human behavior. As the variety of topics this blog touches on, even if there was an abundance of every material good, we would still be talking about competition for social status.
Scarcity is the milieu in which human behaviour operates. And there are things man desires that will always be scarce, top of the list being time and the perfect mate. Scarcity informs the functioning of economies of any kind socialist or market. Particular indistries that have abundance in their current form does not negate the fundamental law of scarcity that determines the possibilities for the functioning of the economy and even the individual industry.
Agriculture is abundant, but it was not under socialism. That is why it is part of the core definition of economics. To forget that is to wash away the foundations of the science. Economics is the study of human action. This is the definition, however encompassing it may be. Scarcity is a big factor of human action. The proposed definition seeks to unite the social and market actors. Personally, I would like to see a clearer line drawn between them.
The market actors produce wealth. The social actors redistribute wealth. The market actors work within the concept of scarcity. The social actors try to get around it. From the US perspective, all food is abundant.
The abundance is an illusion. What is abundance? Sex is free — yet, unless you want to go it alone, it requires some cooperation. Food is scarce, even in the richest societies. Or why does it cost money, money that can be used to buy other goods? That very few people in the US are hungry does not mean that food is abundant the same way daylight is abundant.
It only means that most people command enough resources to cover their basic need of calories. The earth itself nothing but a tightly compounded ball of resources—so in that sense we are not lacking resources—there is such a large amount there for the taking that running out of it all should not be a worry. Food is wealth not a resource. It is the application of the human mind to resources that make our consumption of food possible.
We must think and act to make resources proper to eat. How do the amazing things around us get done? Surely this is obvious from reading Leonard Read?
Economics is a subset of sociology. Sociology studies the behavior of humans in society. Economics limits that to how humans allocate resources. Robert Pirsig Zen and the Art of Motorcycle Maintenance would tell you that it depends on how you apply the scalpel.