The only case of scarcity that we see is when people are starving. Food becomes priceless, and so no price is charged. All that could be exchanged has already been exchanged for food. If the humanitarian agencies asked for something in exchange, slavery would readily be offered, all the clothes worn, sex, whatever. When there is true scarcity, there is no way to bargain, and prices are not suggested.
When starvation is not at hand, people make choices about the excess. You go to buy fruit. The grocer has lots of fruit, but which are you going to buy. The grocer notices that his oranges are going to run out before the next shipment, and the apples are nearly ready for the dumpster. He puts the price of the apples down to influence your decision about which fruit to purchase. His oranges are limited (so are the apples) but the limits on the sales are not the amount of fruit he has, but on the amount of dollars that he can entice out of your pocket. Demand is always short of supply There is no scarcity. Prices do not illustrate scarcity, but only limits.
When the humanitarians are setting up their tables, they do not ask who wants fish and who wants chicken. When there is true scarcity, there are no choices. Prices are about influencing choices. Prices are about limited abundance.
I think you are trying to argue the humanity out of me. I argue that business is a non human machine; a factor in the system. I argue that business reacts to human desires, and does not contain its own desire. In examining the functioning of the macro economy, I don’t see how wants are relevant. They are relevant to the wanter, but not to the economist. Demand is relevant… that is, once the consumer has sorted out his means and conflicting wants and decides to spend his money, then examination is relevant to the economist, and not before. For an economist to try to list the plain wants of a single person would exceed the economists lifetime, and what would be the point?
That would be an appropriate adjective to describe yourself. “Scarcity” is a well established concept to anyone with an ounce of economic knowledge.
Your proved your own obtuseness all the more when you claimed any town in the US would be able to prosper if it were suddenly cut off from all the rest of the world. The obtuseness went even further when you correct that claim with the sufficient food stipulation yet stead-fastly claiming that no other goods other than food would be needed to be imported for any isolated town for economic prosperity to take place. It’s downright comical.
So you are talking about price-qualified demand (“quantity demand” in economics). So why is there a price qualifier in the demand? Why don’t the supplier just give away the goods for free? or sell it for less than the existing price? After all, more demand would emerge at lower price point, right? That’s because the supplier has to pay for the price of production. Why is there a price of production? Because the resources that go into production are scarce.
You are once again going off the far wall on your own invented definitions. People exchange sex for food all over the world, whether it’s in the refugee camps of Africa or in the streets of New York. Money is often an intermediary between sex and food whether in refugee camps or in the streets of New York. Yes, there is currency in the refugee camps too . . . often times food items horded not for consumption but for exchange. Yes, refugee camps and relief organization in general generate a lot of waste too, including rotten apples and oranges.
Of course they too ask who wants what. Try bring pork to a muslim refugee camp, and see if you come back out alive. When humanitarians set up their tables, they are feeding people who choose to eat at the table of free lunch instead of working for a living. . . and by serving at the table, the humanitarians get to build a career that nowadays is often government-funded. Don’t believe me? Check out the Palestinian refugee camps that have been running for over half a century.
Your definition of “scarce” is really warped. You are thinking up scenarios that belong to the la la land conjured up by statists who live off the existence of dependent populations. Disasters, both man-made and natural, have happened at high frequency throughout human history. Historically, people and goods usually move from place to place to adjust to the availability of resources in times of disaster and in times of normalcy. Scarcity is constant, and choice is also constant.
Because the resources that go into it are limited and not because demand exceeds supply. As I posted to inquisiter above…
If there are any exchanges going on at all, then there is not any real scarcity. Abundance can be extremely limited, but exchanges can only take place after there is food in excess of absolute need.
Resources being limited and less than all the (un-price qualified) demand is the very defition of scarcity. What you posted and quoted again was already rebutted. There is no clear line called “complete lack of choice.” Scarcity is constant, and so is choice. That’s why there is economics: the choices that one has to make in the context of constant scacity
Try tell that to the millions of Ukrainians who were starved to death by Stalin’s collectivist policies when he took their food and exchanged for heavy industrial equipment.
Exchanges are going on with humanitarian agencies. But alas, you call this scarcity. Then you go on to say that if exchanges are going on at all, then there is not scarcity. Since humanitarian agencies are “exchanging” something, then there is no scarcity of food in refugee camps, using your logic. Also, the grocer doesn’t use prices to say what he is going to throw out, nor can he just simply lower prices to influence your decision. His limit on how much he can sell DOES depend on his supply. From your statement you gave to inquistor…businesses need to not worry about maintaining relationships with suppliers. Businesses should only care about demand, and getting supply to their stores does not matter.
Nope. Goes to show that government coercion leads to starvation, and that excess food is not a pre-requisuite for exchange, contrary to your earlier claim.
All food distributions are done through exchanges. Most of the time, food is exchanged for money or other resouces, as part of the trade system. If you are talking about the “aid agencies,” then the other side the exchange can include: sex (yes, UN troops and their on the ground operatives are nortorious for their sex appetite), local political influence, local mineral rights, corrupt monetary gains for the individuals involved (UN “food for oi” program for Iraq was only the tip of the iceberg), the country/group’s vote in the UN, the faces of the “victims” in advertising and fundraising for the professional “aid workers.” Your abstract vision of “helpless” and “completely lacking choice” people hardly ever exists in the real world: try bring some pork to a muslim refugee camp, and you will not survive the mob lynching unscathed, regardless how hungry they are. Choices are constant, and so is scarcity; the real world is not made up of selfless bureacrats riding to the rescue of people who have no choice whatsoever, despite what the statists would like to brainwash you.
This is an instance of extreme scarcity. As JimS has said, this is not a good argument.
Non sequitur. You postulate an example of extreme scarcity, say this and nothing else is scarcity and say that this means that prices are predicated on non-scarcity. Yet at all times the grocer is bidding for scarce factors, i.e. the capital and labour involved and the goods he is buying to sell. If scarcity were a non-issue (or if goods were indeed abundant relative to demand), it would be no problem whatsoever for goods to remain unsold. Yet it is - repeated failure rid of one’s excesses will mean the business fails.
Only if you define scarcity to be the extreme case you initially posited. Which, even if it were accepted, would have no impact whatsoever on economics as it is mere semantics.
Isn’t the sorting of means and conflicting wants an economic activity? An economist doesn’t have to list specific wants. What’s important, what fuels economic activity, is want. It’s not an automated process. It’s fueled by man’s wants. The economist doesn’t have to list every single product to assume products as an economic factor. Same applies to wants. They’re categories.
You still haven’t told me how the guy w/ $1 has more power than the guy w/ 1,000 cans of corn.
So economic activity leading up to economic activity is not economic activity? What do you call this, pre-economics? Is pre-economics a factor in economics or even post-economics?
No. It is fueled only by those wants that have turned into economic demands.
The guy with the dollar has choice over where he will spend it. The guy with the corn has little choice in what to do with it. He can store it or sell it to anyone that happens along that wants corn. There are lots more places to put a dollar then there are to put a can of corn. Now if he succeeds in selling some, then he has power with the dollars he holds. He does not have the same kind of power while he is trying to sell his corn.
But I thought cash was power. To say businesses handing over more cash to an employee is merely a ‘debit against sales income’ is inconsistent w/ your views on the power of cash. The business is handing over cash/power to an employee. You say, handing over more cash, that powerful stuff, is not a cost to employers.
COST- cause loss of something: to cause somebody or something to lose, sacrifice, or suffer something
So a business handing over powerful cash to someone or something outside their business is a ‘mere debit against sales income’? You’re saying the cash is going to come back anyway. OK, let’s assume they’re going to get that same cash back. Guess what, the $7 that found it’s way back ‘home’ isn’t going to be 100% profit. If they make a 10% profit on sales, they’ll get back 70 cents out of the $7. But you don’t draw a distinction between businesses, right? The other $6.30 will go to some business somewhere, whether it’s business a, b, c, d, or zzz. So it’s not really a debit against sales income for THAT business but for ALL businesses, ie macro, right? You just see this big nebulous blob of non-thinking circulators of paper and materials to-and-fro. Money could constantly be redistributed evenly to all persons and they’d still be able to circulate paper. Man acts economically for a reason ( a motive or cause for acting or thinking in a particular way)
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But the trades between cash and corn have the convenience of cash already built into the mutual valuation. It’s not a value external of the trade. So when the guy with 1,000 cans of corn and the guy with $500 agree to trade, the so-called power of cash is figured in the trade agreement. The power of corn is figured into the trade agreement. One provides sustenance, while the other provides trading convenience. Each quality, at the agreed to quantity, effects a mutual trade. But this convenience of cash is not even a possibility unless it was being used for goods and services. What good is a million dollars in everyone’s hands if the last good on earth is a single can of corn? What good is $1 at effecting a trade if the other trader is bringing 1,000 cans of corn to the ‘table’? $1 is not SO convenient it ‘outdoes’ the value of 1,000 cans of corn.
Yea, and a house must REALLY be worthless, since you can’t take it anywhere!
“Have turned into”? If man wanted nothing, what would happen to economic activity? That unlimitedness of our wants is what makes resources to be considered scarce. Since man is always wanting more and his wants are infinite, scarcity describes the relationship between our wants and the means available to satisfy them. In the light of wants, everything is scarce. You say nothing is scarce because the nature of man does not figure into your economic system. Man acts economically so as to please man, not to please economics.