Scarcity

"Scarce" redirects here. For the surname, see Scarce (surname). For the New York based band, see Scarce (band).

Scarcity is the fundamental economic problem of having humans who have wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be pursued at the same time; trade-offs are made of one good against others. In an influential 1932 essay, Lionel Robbins defined economics as "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses."

In biology, scarcity can refer to the uncommonness or rarity of certain species. Such species are often protected by local, national or international law in order to prevent extinction.

Scarcity in Economics

Goods (and services) that are scarce are called economic goods (or simply goods if their scarcity is presumed). Other goods are called free goods if they are desired but in such abundance that they are not scarce, such as air and seawater. Too much of something freely available can informally be referred to as a bad, but then its absence can be classified as a good, thus, a mown lawn, clean air, etc.

Economists study (among other things) how societies perform the allocation of these resources — along with how communities often fail to attain optimality and are instead inefficient. More clearly scarcity is our infinite wants hitting up against finite resources.

Certain goods are likely to remain inherently scarce by definition or by design; examples include land and positional goods such as awards generated by honor systems, fame, and membership of elite social groups. These things are said to derive all or most of their value from their scarcity. Even in a theoretical post scarcity society, certain goods, such as desirable land and original art pieces, would most likely remain scarce. But these may be seen as examples of artificial scarcity, reflecting societal institutions - for instance, the resource cost of giving someone the title of "knight of the realm" is much less than the value that individuals attach to that title.

On the other hand, that ease with which some goods can be obtained or replicated (for instance, intellectual property) led to the introduction of artificial scarcity in the form of legal or physical restrictions which limit the availability of such goods.

See also

• Economic problem
• Economic shortage
• An Essay on the Nature and Significance of Economic Science
• Value theory
• Post scarcity
• Rare species

References

• Milgate, Murray (March 2008). "goods and commodities". In Steven N. Durlauf and Lawrence E. Blume. The New Palgrave Dictionary of Economics (2nd ed.). Palgrave Macmillan. pp. 546–48. doi:10.1057/9780230226203.0657. http://www.dictionaryofeconomics.com/article?id=pde2008_G000080. Retrieved 2010-03-24. 
• Montani, Guido (1987). "Scarcity". In Eatwell, J. Millgate, M., Newman, P.. The New Palgrave. A Dictionary of Economics. 4. Palgrave, Houndsmill. pp. 253–54. 
• Malthus, Thomas R. (1960) [1798]. Gertrude Himmelfarb. ed. On Population (An Essay on the Principle of Population, as It affects the Future Improvement of Society. With Remarks on the speculations of Mr. Godwin, M. Condorcet, and other writers). New York: Modern Library. pp. 601. http://books.google.com/books?id=dzsOAQAAIAAJ. Retrieved 2010-03-24. 
• Burke, Edmund (1990) [1774]. E. J. Payne. ed. Thoughts and Details on Scarcity. Indianapolis, IN: Liberty Fund, Inc.. http://www.econlib.org/library/LFBooks/Burke/brkSWv4c4.html. Retrieved 2010-03-24.