Economics Uses a False Definition of Scarcity (and Ignores Abundance)

     Mainstream economics is using an incorrect definition of scarcity.

     Scarcity is usually defined as if it were synonymous with finite, limited, and fixed.

     But scarcity, finitude, limitedness, and fixity are not the same thing. That's why we have different words for each of those concepts.

     If you examine the various definitions of scarcity, it is almost as if scarcity has no independent definition unto itself; it seems to be defined solely through its relation to limits, and being finite and/or fixed. At best, the definition of scarcity is incomplete.

     Fixed means there will never be more and there will never be less of a given resource (for example: naturally-occurring, non-manmade land on earth, if you ignore the formation of islands by volcanoes).

     Limited means that the amount of a given resource can never exceed a certain number or size (like how wolf populations are limited by the amount of prey animals available to them for food).

     Finite means that the amount of a given resource can be quantified with reference to a real number; that is, it is not infinite.

     Scarcity refers to a state in which you have less than you need, and need more than you have. It is not the same thing as the resource being fixed or finite (although they may be related; it is a supply and demand relationship).

     The real trouble in defining scarcity incorrectly, and assuming these terms to be interchangeable, is that we come to believe that every resource is scarce (and also fixed, finite, and limited, all at the same time).

     The most popular prevailing definition of economics (coined by British economist Lionel Robbins) is (to abbreviate) "the study of human management of scarcity". Management of abundant resources is not mentioned. 

     Is there something about the management of abundant resources which is inherently "against economics", or which is "not economics"? No. Is there something about management of abundant resources which is completely unconnected to the management of scarce resources, that would merit giving the study of them two different names? No.
     So, then, why isn't abundance included in the definition of economics?

     What this shows is that the prevailing definition of economics implicitly assumes that all resources are scarce. Mere definitions of words are not supposed to make such haughty claims. The issue of whether all resources are scarce, should be determined through debates between economists, not by the dictionary.

     But still, we go on assuming that all resources are scarce, because we have been told that since we were born.
     And since the primary form of 'human management of scarcity" is through governance by the state (which entails the use of legitimized violence), it is further assumed, by the teachers of mainstream economics, that all resources which are scarce (which is supposedly all of them) must be managed by the centralized, monopolistic state.
     This way of thinking leaves absolutely no room for free markets, heterodox economics, nor decentralized planning of resource distribution.

     Scarcity is not defined as "a state in which everything is scarce, which is everything, always, and therefore we must have one supreme government rule over us, and over all of our economic affairs"; it is a situation in which we have less of a given resource than we need.
     These two definitions have almost nothing to do with one another, and yet most of us do not care which of these things is the actual definition of "scarcity". And the reason why we don't care, is because we would never guess that knowing its true definition might have some positive effect on our lives, or make it easier for us to live (and acquire the resources we need) without having to work so long and so hard.

     Those who study economics must not make the mistakes, and wild leaps in logic, which come with defining scarcity as something it's not.
     Scarcity, finitude, limitedness, and fixity are four different things, and abundance of some resources (such as air) exists. Therefore, any definition of economics which does not address these differences (or at least take them into account), is an incorrect definition of economics.

     The idea that all resources are scarce is being used to excuse and justify more competition, and more ruthless competition, than is necessary. Truth be told, competition is the less efficient and less ethical choice, in emergencies and non-emergencies alike, as compared to cooperation. It is because of the over-emphasis of the role of competition in solving economic problems, that the role of cooperation (especially voluntary cooperation) is being undermined and under-emphasized.
     Entire business schools, and university systems, are founded upon the principle that education is necessary to help individuals compete in a global economy in which resources are scarce.
     If universities cannot prove that all resources are scarce, and prove that competition is preferable to cooperation when it comes to managing resources in emergency as well as non-emergency situations, then our educational institutions are guilty of widespread education fraud, and should be found legally responsible as such.

Written on May 17th, 2023.
Published on May 17th, 2023.

Thanks to Tom o'Donnell and Tim o'Donnell
for teaching me this information.

Resource Map for the March 2010 Rainbow Gathering Near Apalachicola, Florida

     The map below is based on data I and a friend collected at the March 2010 Rainbow Gathering near Apalachicola, Florida.

     Rainbow Gatherings are events in which "hippies" and people of alternative lifestyles come together to camp in state and national parks, set up mobile "kitchens", trade arts and crafts and other things, and enjoy festivities and one another's company.

     I collected this information to assist another camper in a student project of his. His aim was to collect information about the camping, kitchen, and trading locations on the campsite.

     You can learn more about Rainbow Gatherings and the Rainbow Family of Living Light by visiting www.welcomehome.org and www.welcomehere.org.

     Note: "Yippie! Joe's Reaganville" refers to the tent which was set up by the author. The term "Reaganville" is a neologism combining "Reagan" with "Hooverville" (a kind of makeshift home which became popular during the Great Depression).

Map created in February 2010

Published on October 9th, 2019

States Could Experiment with Export and Resource Backed Currencies

Written on September 15^th, 2016

 

Edited and Expanded on October 4^th, 2016

 

            Balancing government budgets, instituting Georgist taxation, and legalizing competing currencies, could potentiate new ways to back legal currencies.

Imagine that community land trusts flourish; that state and local governments had balanced budgets, based their revenue sources solely on user fees, voluntary contributions, and a Land Value Tax; and that they governments establish citizens' dividends and residents' dividends and permanent funds, funded by exports and fees on natural resources.

If each state were to produce its own official state currency, within its own boundaries, controlled by a state public bank, based on and backed by its chief export, it would provide a local alternative to the fiat paper dollar, and to gold and silver.

 

The three states whose chief export is gold - Utah, Nevada, and Massachusetts - would have only gold, silver, and paper dollars as their official legal currencies; unless they were to produce their own state currencies to compete with the $10 U.S. Golden Eagle, or legalize Bitcoin, or undertake some other measure. Perhaps two or all three of these states would adopt a single gold currency.

Four states - Illinois, Michigan, New Jersey, and Texas - export gasoline more than anything else. North Dakota exports crude oil the most; and Montana, West Virginia, and Pennsylvania claim coal as their biggest export. Unless these eight states were to join into a single currency backed by fuel and energy exports, we would likely see them adopt "Gas Dollars", "Crude Oil Dollars", and "Coal Dollars". Gallon tanks of gas might even become media of exchange.

Six states claim food products as their chief exports; they might join into a united currency - or currency composite - based on the average of the values of food exports across all six member states. Colorado and Nebraska would have a "Beef Dollar"; South Dakota and Virginia would have a "Soy Dollar"; Iowa would have a "Corn Dollar"; Maine would have a “Lobster Dollar”; and Idaho would have a “Potato Dollar”. Well-preserved potato, corn, and soy products - as well as beef jerky - might become media of exchange under such systems.

Eighteen states export vehicles more than any other good. Alabama, Maryland, and South Carolina would have a "Car Dollar"; while Michigan and Missouri would have a "Truck Dollar". States adopting an "Airplane Dollar" include Arkansas, Arizona, California, Connecticut, Florida, Georgia, Hawaii, Kansas, Kentucky, Louisiana, Ohio, Oklahoma, North Carolina, and Washington State.

New Hampshire, New Mexico, Oregon, and Vermont would have an "Electronics Dollar", exporting electronic devices more than anything else. Delaware, Indiana, Tennessee might have a "Medicine Dollar", chiefly exporting medical goods.

Other states would take unique approaches to establishing their own currencies, having unique chief exports. We would likely see such things as the "Alaska Zinc Dollar", the “Minnesota Needle Dollar”, the “New York Diamond Dollar”, the “Rhode Island Metal Waste Dollar”, and the “Wyoming Soda Ash Dollar”. Finally, the District of Columbia - exporting arms and armaments - would adopt a “D.C. Arms Dollar”.

 

Of course, the downside to each state having its own currency backed by its chief export, would be that states would be largely incapable of avoiding promoting their own industries; and this would interfere with free trade. States and the federal government subsidize - and grant other favors and protections to domestic industries - too much as it is; and such currencies would only embolden government to put more taxpayer money into increasing exports.

The federal government would be obligated to get involved, given its role in ensuring regular, uninhibited, uninterrupted flow of interstate commerce in such goods. This is especially so, if states were to attempt to tax the same goods they back their currencies on, when those goods come from out of state.

Truth be told, if every state subsidized its own chief export in order to keep its state currency strong, then the states couldn't rightfully blame each other without being hypocrites. But on the other hand, the federal government doesn't hold states accountable for favoring themselves or for interfering with free trade, and that rationale ought to stop.

     Another thing to consider is whether states should be encouraged to back their currencies on - instead of their chief exports - their chief natural resources (by whatever measure). This might ultimately prove to be better for the economy and for the environment, because when a state's chief natural resource is a mineral resource or an agricultural product - like wood, fiber, oil, coal, or gasoline - it might be less hazardous to the environment, and more popular among the voting populace, that the real value of the product lies in leaving it in the ground.