Economic Lesson V: Scarcity
Photot by Jedimentat44 via Wikimedia Commons
Scarcity is the economic concept that everything is finite, that everything has a limited quantity. Time, money, resources, sandwiches, you name it. It is a rather basic point but it isn’t simplistic.1 If it were, you wouldn’t see literally every person on Earth misunderstand it at some point. Yes, some know better and act on malice. We call those people brophaloms. You would probably call them politicians or insurance salesmen or criminal defense attorneys. We all have our mental shortcuts.
Since it is rather easy to understand, I won’t overcook the grenade here. Those who pretend scarcity doesn’t exist are playing you. Yes, you, in the back there, Adrian.2 Politicians are almost always the ones to utilize this one, but academics and journalists (who are both just unelected politicians, in my book) do it often as well. Some if not most are just idiots, people perpetually stuck in Sociology 101 as a fall semester college freshman whose mind was totally blown who then annoyed their parents and (“for reals, totally racist”) uncle with their pedantic nonsense at Thanksgiving dinner.
But let’s delve into why this is stupid. Karl Marx was an economic illiterate who didn’t realize labor wasn’t the only cost in the production of a product. Or how pursuit of profit is what causes investment that leads to people having jobs in the first place. I don’t blame him for the atrocities of the 20th century. I blame the evil and corrupt people who enacted his beliefs, however much they may or may not have twisted them. “Real communism has never been tried!” I hear you, Noam Chomsky fanboy. It is because real communism can never fundamentally work in the real world as it wildly misinterprets human nature. No one will ever care about the collective good more than himself and his tribe (however he defines that.) Refusing to believe your lying eyes with the glut of evidence just in the last hundred years of humanity is not my problem, brophalom.
Human beings by nature are tribalistic. In fact, human males are naturally not monogamous. The way to tame our baser natures is to provide a benefit to doing so. Incentives matter! The love of a woman who truly cares for you deeply and profoundly can tame most men.3 But let’s get back to the topic at hand: Lying liars who lie.
Lying is a natural consequence of being a public figure others trust. You will lie to maintain that trust for as long as the gravy train lasts. Honest politicians don’t last long, either being ground into the dirt face first or just giving up and joining the liars. No, not Ron Paul, you dumb Paulbots! Dr. Anthony Fauci lies all the time and defends his lies by portraying himself as the avatar of science, all that which is good and true. Seriously, he recently did that. He’s a whackadoodle bureaucrat.
If a majority of the media loves you, you can get away with pretty much anything. See Barack Obama. Or Hillary Clinton. Or Bill Clinton. Or Al Gore. Or John Kerry. Or Kamala Harris. Or “The Squad.” Or Dr. Fauci, as if I needed to repeat that. People getting high on their own supply of media adulation. A vicious cycle of nonsense.4
As a Hayekian-style fiscal libertarian (don’t capitalize me, bro!), I try to see the world as it is, not how I wish it to be. That means practicality. I know Medicare will implode because the only person who tried to seriously fix the problem (Paul Ryan) eventually realized zero people were actually with him once he had the power to make entitlement reform a reality. I pray my worst fears surrounding it don’t come to pass, but I really wouldn’t want to be a worker at a nursing home if it does. And, no, I won’t explain that one.
This is far too heavy on rhetoric and too light on substance. You’re just making a bunch of assertions about how wrong and stupid and dishonest other people are. I’m not saying you’re wrong about that, but you do actually have to do the work to make that case. You need concrete examples of people making claims that assume away scarcity or the importance of incentives.Report
Concur, this needs a Part 2 with more meat.
Talk about how people lie about scarcity, or how governments and businesses manipulate scarcity (and then lie about it).Report
This actually is the second part. I already wrote about contrived scarcity before.Report
The extra work wouldn’t just give the article more substance, it would give it more meaning. As it stands now, the non-economist reading it would wonder why he should care about some random people denying an economic concept.
Bonus points: once you’ve explained the denial of scarcity with regard to, say, Medicare and the minimum wage, the likely response would be if there is scarcity, that’s all the more reason for equity with the goods we have. Answering that might go beyond the goal of the piece, but it’d be good at least to expect that argument.Report
An additional form of scarcity that would need to be touched on would be the whole “positional goods” thing.
There are goods that can only, and I mean *ONLY*, exist because someone else does not have them.Report
For fun, there is a lesson on scarcity in this article.Report
Also Marx wasn’t an economic illiterate, most of his work was just done before the marginal Revolution. It’s like calling Newton ignorant about physics. Yes, his theories are wrong, but it is anachronistic because we only know they’re wrong in virtue of later developments in the fieldReport
Minor post-Ricardian is a formulation of Marx the economist theorist within the non-Marxist tradition.Report
For those unfamiliar with the phrase (as I was twenty minutes ago), this is a reference to comments in an AEA address by Paul Samuelson:
https://delong.typepad.com/sdj/2013/10/robert-paul-wolff-on-paul-samuelson-on-karl-marx-thursday-whiskey-tango-foxtrot-bang-query-bang-query-weblogging.html
Richard Wolff, who is quoted at the beginning, is a Marxist. It should be noted that Samuelson himself was fairly left-wing by economist standards, and while highly respected for his technical contributions, was notorious for predicting that the USSR would soon catch up to the US economically, and for pushing back his prediction of the year this would happen in each new edition of his textbook. So it’s not like he had a vendetta against Marx or anything.Report
This is correct; Marx and the early marginalists were contemporaries, so it’s entirely understandable that he didn’t have a good understanding of marginalism.
However, I think the comparison to Newton is a bit off, since Newton was essentially correct for most practical purposes, and our modern understanding of physics builds upon his work. Marx, by comparison was simply wrong, and his work was essentially a dead end. And while he had no way of knowing better, modern Marxists have no such excuse.Report
However, I think the comparison to Newton is a bit off, since Newton was essentially correct for most practical purposes, and our modern understanding of physics builds upon his work. Marx, by comparison was simply wrong, and his work was essentially a dead end. And while he had no way of knowing better, modern Marxists have no such excuse.
Fair point.Report
And yet people still listen to Marx. And he was illiterate. Valuing a produced good by only the labor that went into it is dumb.Report
HIndsight is 20/20. At the time, LTV was pretty much the received view.Report
Anybody that declares “this is human nature” and the Rules Which Define the World is far more likely to be fooling themselves then anyone else. Saying people are tribal isn’t saying much. How individual or communal are people? That’s question whose answer would include lengthy discussion of places like China, India, Japan etc. American western individualism is not actually the definition all human nature.Report
Anyone who thinks Paul Ryan was serious about anything other than self-promotion and magic asterisks has a LOT of work to show.Report
There are never enough good discussions of scarcity.Report
The problem with scarcity is that it’s everywhere.Report
All right, you 2, that’s more than enough.Report
Are you saying we’ve reached post-scarcity with regards to scarcity discussions?Report
scarcity is a social construct…Report
Being and Nothingness: ontological scarcityReport
Scarcity is terryfying. That’s why it’s called “scare city”.Report
No, it’s called “scar city”. You americans and your deviant pronunciations!Report
Frank Miller’s latest economic treatment?Report