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01 September 2003 @ 10:26 pm
The economics of scarcity  
The classical concept of scarcity is unlimited wants vs. limited resources. That people's wants are unlimited but the means to satisfy those wants are not. There are two flavors of limitation that create scarcity – external limitation which is a hard ceiling on the amount of a resource available (ex. oil), and internal, or 'man-made', limitations where there may be a sufficient amount of the resource in question but it is unevenly distributed or badly managed (ex. food).

Scarcity exists in closed economic systems. And other systems as well, but I'll get to that later. Scarcity can be alleviated in a couple of ways. Increasing the supply of goods and services will do so, as will improving the apportionment of the resources in question.

Markets (are supposed to) regulate scarcity by storing information about consumer's wants and needs and harmonize the supply and demand thereof. In economic systems they accomplish this through the price mechanism. Money therefore acts as both a vital unit of information and conductor of the price signal. As we've all experienced, increasing scarcity leads to higher prices. If a resource is freely available, then it (supposedly) has no value. Keep in mind that price is merely an indicator of the market value of an asset, and that resources can have non-monetary value.

Scarcity and markets are intimately intermingled, for markets would be completely unnecessary in the absence of scarcity. Then it would be like living in Star Trek, where money didn't exist and one only had to ask for what they wanted. Nice place – maybe we should all go there…

So, why do we fear scarcity? Some of us fear it because we have known times of deprivation. We fear it based on having suffered it. Generally we thing about it in terms of money but we are also exposed to scarcity of natural resources, such as oil and natural gas, as well.

So I said all that, so I could say this…

But how many of us fear scarcity because we've suffered not a lack of material resources, but emotional ones? Love, caring, nurturing, friendship? Security? Respect? To feel important somehow? What happens when one doesn't get those sorts of things? Just as one can hoard physical things, so can we 'hoard' our time, our energy, our emotions.

Scarcity applies to several non-monetary things in life that affect us, most notably time, love, understanding, and respect.

Are all these things really finite? Do we have to settle for internal limitations on these precious resources, or can more be created? Can they be managed better?

Is time more than just a commodity, but a sign of worth as well? How are we supposed to measure the worth of love?

This concludes the randomly geeky interlude for the day. We now return you to your regular programming…

-the redhead-
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vewvew on September 2nd, 2003 03:18 pm (UTC)
So, why do we fear scarcity?

Many of fear what we do not understand. Scarcity or limits are one of the things we learn about young, esp when other siblings or parental units being unavailable.

Maslow talks the Hierarchy of Needs

Our basic need for physiological survival: shelter warmth, food, drink, and so on.

Once these physiological needs are met, individuals then are able to address the need for safety and security, including freedom from danger and absence of threat.

Once safety has been assured, belonging or love, which is usually found within families, friendships, membership in associations, and within the community, then becomes a priority.

Maslow stressed that only when we are anchored in community do we develop self-esteem, the need to assure ourselves of our own worth as individuals.

Maslow claimed that the need for self-esteem can be met through mastery or achievement in a given field or through gaining respect or recognition from others.

Once the need for self-esteem has been largely met, we will develop a new restlessness and the urge to pursue the unique gifts or talents that may be particular to that person.

What a man can be, he must be. He must be true to his own nature"

Maslow referred to this final level of need as "Self-Actualization."

So when I look at Hierarchy of Needs and think about time. It falls in the section about family, love and community.

Time is a unit of measure, we have so much time and how we spend it often tells us what is important to our lives.

Love takes practice and understanding, we have to share ourselves to do that and if we have been rejected or hurt it is harder to make the effort. Not impossible but harder. So we are less likely to share our time and efforts the next time...

According to Folk wisdom... it is better to love and loose then never love at all.

I have to agree. But that does not mean stop growing.


-the redhead-theredhead on September 2nd, 2003 08:15 pm (UTC)
Once safety has been assured, belonging or love, which is usually found within families, friendships, membership in associations, and within the community, then becomes a priority.

Maslow stressed that only when we are anchored in community do we develop self-esteem, the need to assure ourselves of our own worth as individuals.


I've always disagreed with Maslow on the community point. Tho in some ways I suppose that family can be considered community. But I think that self-esteem, for adults at least, in some ways comes before community for it is what allows one to participate *in* the community. Perhaps they develope concurrently.

Time is a unit of measure, we have so much time and how we spend it often tells us what is important to our lives.

Yes. What is that one philosopy of yours about time and payment?

Love takes practice and understanding, we have to share ourselves to do that and if we have been rejected or hurt it is harder to make the effort. Not impossible but harder. So we are less likely to share our time and efforts the next time...

Yes, mich harder.

-the redhead-