- This article is about the concept in economics.
Scarcity is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. A common misconception on scarcity is that an item has to be important for it to be scarce, or vice versa. This is not true; for something to be scarce, something must be given up, or traded off, in order to obtain it.
The notion of scarcity is that there is never enough to satisfy all conceivable human wants, even at advanced states of human technology. Scarcity involves making a sacrifice—giving something up, or making a tradeoff—in order to obtain more of the scarce resource that is wanted.
The condition of scarcity in the real world necessitates competition for scarce resources, and competition occurs "when people strive to meet the criteria that are being used to determine who gets what.":p. 105 The price system, or market prices, are one way to allocate scarce resources. "If a society coordinates economic plans on the basis of willingness to pay money, members of that society will [strive to compete] to make money":p. 105 If other criteria are used, we would expect to see competition in terms of those other criteria.
For example, although air is more important to us than gold, it is less scarce simply because the production cost of air is zero. Gold on the other hand has a high production cost. It has to be found and processed, both of which require a great deal of resources. Additionally, scarcity implies that not all of society's goals can be pursued at the same time; trade-offs are made of one goal 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."
- Abundance mentality - concept by Stephen Covey
- Artificial scarcity
- Economic shortage
- Energy crisis
- Post-scarcity economy
- Scarcity heuristic - psychological phenomena
|Look up scarcity in Wiktionary, the free dictionary.|
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