Wednesday, August 24, 2011

Scarcity and Property Rights

It is a simple fact that our world is a world of scarcity, that is, that human wants exceed the amount of usable resources to satisfy them. This is not say that usable resources are not being discovered, or that human wants will not change. Of course change happens. Oil was once considered a nuisance, but now it's considered a usable good.

When people need the same resources (economic goods) to satisfy their wants, conflict ensues. This is what economists call the "economic problem": How are things to be produced and the factors of production allocated in a world of scarcity? There are ways of handling conflict over scarce resources. People can fight over them, and to the victor go the spoils. Or, people can reason. They can use the resource between their ears to come up with ways of ending, reducing, and preventing conflict, leading to the creation of wealth and prosperity. One of those ways has been through the formulation of a theory of property rights.

Every school of economic thought today recognizes that we live in a world of scarcity, and that property rights are a necessary tool in avoiding conflict. In other words, they are all trying to solve the economic problem. Here're some resources to better understand scarcity and property rights:

Scarcity - Russell Shannon
The Ethics and Economics of Private Property - Hans Hoppe
Economists and Scarcity - Steven Horwitz
Economics for the Citizen, Part 1 - Walter Williams

What each of these resources will explain is the fact that we live in a world of scarcity. If we didn't, we'd have no use for the study of economics or a theory property rights. Through economic progress, scarcity is transformed into abundance. Things become abundant because human beings figure out ways to improve their processes and reduce their costs. When government creates artificial scarcity, as they do with schemes like licensing laws, economic regulations, and patent and copyright protections, progress is stifled.

One final point. To argue that God has made for us a world of abundance, and that everything is plentiful, is to demonstrate a fundamental misunderstanding of the above. Yes, God has made for us a world of abundance, but we have yet to completely discover it. It's all there, just waiting for us, but until economic progress advances to the point that everything anybody will ever want can be had in abundance, it's a little silly to insist that we don't live in a world of scarcity. And remember, the way to abundance is a market free from government intervention.

1 comment:

vontrapp said...

I don't know if we'll ever have abundance to the point that "everything anybody will ever want can be had", nor do I think that's what the scriptures mean when saying the earth is full.

The scriptures also say "by the sweat of your brow" until you die. Scarcity is just another way of saying it takes effort to have what you need and want. As long as people work, there is scarcity. If there were not scarcity, there would be only leisure.

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