Scarcity and Abundance
I ended the previous post by noting that the free and virtuous pursuit of self-interest is essential to just economic production and human flourishing, but I also noted self-interest alone is insufficient. We will deal with the latter qualification in time, but first, we must look at economic production.
Most economics textbooks will tell you that economics studies how societies manage scarce resources. Two key aspects of economics are production and distribution. Each society must determine how much of any good or service will be produced, and each must decide on what basis goods and services will be distributed.
Yet when intellectuals, theologians, and activists focus on economic issues, there is a pervasive tendency to focus on economic distribution to the near exclusion of economic production. A particular aim is taken at the notion of scarcity, claiming instead that we live in abundance. Read these selections from Douglass Meeks’ God the Economist: The Doctrine of God and Political Economy, a popular theological text on economics written twenty years ago and still used in some seminaries and colleges today:
What the market mechanisms actually require is scarcity in the sense of blocked access to what people need for livelihood and work. Scarcity in this sense is the conditions for exclusive private property. (Meeks, 172)
Scarcity may not be made the starting point of a system of economic justice. As a starting point, scarcity is an illusion. In almost all situations of human life scarcity has been caused by human injustice. (Meeks, 174)
Either by ignorance or by design, this line of reasoning is oblivious to economic production. Based on this reasoning above, one might be forgiven for thinking that cars, cell phones, loaves of bread, clothes, and all other goods we buy simply exist somewhere. All we need is a better distribution mechanism to ensure everyone has some.
Assuming you live to be eighty years old, and assuming you had the aptitude for all the following, why would you not learn to be a concert pianist, a physicist, a lawyer, an expert auto mechanic, a professional athlete, a business mogul, a senator, and a movie star? Because even with an aptitude for each of these, you would not have the time to pursue all of them in one lifetime.
Let’s bring the lens in even tighter. When you awoke this morning, you likely charted activities you would do today. In choosing to arise at 6:00 a.m., you decided not to arise at 5:00 or 7:00. In eating your Cheerios, you decided not to fix scrambled eggs or make waffles. In choosing to go to work, you decided not to play golf, go shopping, or rob a bank. We cannot do everything all at once. We have a limited number of hours each day and a limited number of days in our lives. Scarcity is inescapable. The fundamental reality of human existence is that time is a scarce resource. We must choose some things and not others.
Furthermore, as we take a global view, we can observe that on any given day, there is a relatively fixed number of people with a fixed set of skills and knowledge, a fixed amount of productive capacity (technology and infrastructure), and a fixed amount of raw materials that can be accessed in twenty-four hours. Each day, our world collectively decides how it will allocate limited labor, productive capacity, and raw materials. In short, we manage scarcity.
When Meeks writes, “Nothing is deeper in the spirit of capitalism, and of socialism as well, than the belief that there is not enough to go around,” the “enough” seems to imply the basic goods to sustain life. This is just plain silly. Within capitalism or socialism, there is the belief that there is not enough of everything everyone might conceivably want to go around. Both ideologies presume that basic needs can be met with their systems. Meeks’ pejorative misrepresentation of economics is inexcusable, yet I find it regularly reflected in the mindsets of people who identify with progressive Christianity (and even some who aren’t progressive.)
Now if by scarcity we simply mean everyone not having enough to sustain life at some basic level, then only in recent years have some societies found ways to eliminate scarcity. But societies around the world have also been mired in the Malthusian Trap. Thomas Malthus, writing 200 years ago, noticed that societal prosperity has led to population growth across history. Population would eventually outstrip the resources to sustain itself (i.e., scarcity), causing famine and disease (sometimes conflict and war.) Population would decline to manageable levels, prosperity would again take root, and the whole process would endlessly repeat itself.
Only in the past two or three centuries have some societies broken through the Malthusian trap. How did they escape? They found a way to produce an abundance that outstripped Malthus’ scarcity trap, not a better way to allocate some mythical pre-existing abundance that some had kept away from others. Contrary to Meeks’ notion that abundance is the norm and scarcity an illusion, scarcity is the inescapable human condition, and abundance is the product of human beings transforming matter, energy, and knowledge from less useful states into more useful ones. Without sufficient economic production, there is no abundance to distribute. Critical to achieving sufficient economic production has been the freedom of individuals to act on their self-interest in the marketplace. We turn to the importance of this in the next post.
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