centuries ago in europe the diamonds came from aluvial fields in india. THEY WERE SCARCE. only the rich and royalty had them.
there was a frontline episode on diamonds years ago. with the diamond mines in africa and todays transportation diamonds ARE NOT SCARCE. jewelry stores are everywhere, they have more diamonds than anything else. BUT DAIMONDS ARE A GIRLS BEST FRIEND. women are nuts. these broads have some of us spending big money on useless COMMON rocks. de beeres has the nerve to make ads telling us how many months salary to spend on a ring. HOW MANY WOMEN BELIEVE THAT CRAP?
i’d rather buy oriental rugs.
it’s supply and demand but demand is can be psychological.
Well, I would disagree. We (in the US) don’t have a SHORTAGE of necessary goods. But scarcity still abounds.
Again, economists make a distinction between the two - scarcity is about making CHOICES. Look at it this way, if you decide to respose to this post, you have made a choice. A choice out of an infintite amount of other choices you could have made. By choosing to respond to this post, you have giving up the opportunity to do whatever you could have done. And that giving up of the choice/choices you could have made is the opportunity cost of the decision you made. In a market economy (capitalism), prices reflect those opportunity costs.
Scarcity arises due to the conflict between human’s potentially infinite capicity of needs/wants versus the finite resources that human actually have (time, labor, resources, etc.). Because of this conflict, humans have to make choices. Economic systems arise to deal with this situation.
I think the whole problem stems from the definition and use of the term scarcity. Use shortage - you’ll get less flack from the economists.
Well, you’ve sort of lost me. I understand the economist’s idea behind defining scarcity in that way, agreed. First day of economics class, IIRC.
If we start out with assuming the infinite and having only the finite I think we’ve got a platonist vs constructionist problem here.
As well, we were discussing (albeit undefined) necessary goods. My original beef was that that term is very subjective and thus, as it stood so far in the thread, meaningless for debate purposes.
Opportunity cost in an econ sense refers to what I mentioned about the only thing being scarce is effort, no? What are you willing to do to get said good? Scarcity in a goods sense means there are more people wanting this good than is available by any means. Scarcity in an opportunity-cost sense is that there are a finite number of ways to expend effort to aquire goods, and so we need to maximize our good intake while minimizing effort. Well, there again is that funny “need” term. But anyway, if all people have the same amount of time then it, really, is the least scarce of all things, wouldn’t you say?
We are having that age old problem wher ethe lay definition is different than the professional definition. It is like debits and credits in accounting. YOu can add money to the account with a debit.
Scarcity, as an economic concept is widely understood and accepted. In common parlance, it may mean a different thing. unless we agree on the meaning of the term, arguing about it is pointless (because there is a shortage of points.)
Demand IS psychological. It’s all based on our own perceptions of how much we are willing to spend for something. The only reason we buy things like diamonds or cell phones is we think we “want” or “need” them. But you’ll love this:
Yes diamonds were originally valuable because they were RARE (not SCARCE in the economics definition, but I understand your meaning. I don’t feel like continuing the “scarcity” debate). That drove the price up. Until recently, nearly ALL diamonds were distributed by deBeers (some diamonds come out of Russia now). Because deBeers had a monopoly, they would intentionally limit the supply in order to drive the price up!
Ever cram for an economics exam the night before the test? Time gets REAL scarce around 2:00am when you still have 6 chapters to go!
I think you would agree that the most economic advanced countries of the world whose market system is capitalistic (in whatever form) have done a good job of meeting most people’s basic needs - if not actually, then potentially. Now, you can certainly argue what those basic needs are and whether they are, in fact, being met by everyone in that country. That’s a whole 'nother debate.
Right, what “price” are you willing to pay to chose doing something, buying something, making something, etc.? That price is the opportunity cost - the cost of making that choice by foregoing alternative choices.
Well, I (and other economists) would consider this a shortage (there is more of something demanded than is actually supplied).
In general, you’re correct.
I agree, need is a very subjective term. The “wants” of previous generations often become the “needs” of current generations. It still boils down to making choices.
If everyone that has lived, is living, and will live had the same amount of time to live their lives, then scarcity would still exist. Because my needs/wants are different from your needs/wants, are different from his/her needs/wants, etc. Multply that by eveyone alive (or who lived and is yet to live). And factor in changes in peoples’ wants and needs.
Put another way - if everyone has an infinite lifespan and all their needs/wants could be met instantaneously, then scarcity would not exist. That because all my choices could be satisfied. I’ve sacrificed nothing - no opportunity cost.
To sum, economics deals with making choices. Whether the economic system in place is pure Communism or pure Capitalism (and varients in between), scarcity will always have to be dealt with.
True. And my point is: scarcity, in general, doesn’t exist in the present. Thus, we move into the realm of theory – theoretically, without capitalism, at some future point scarcity would result.
But, this is ultimately a theory that hasn’t been tested, except by replacing capitalism with systems that have even more constraints and overhead, such as communism or socialism or feudalism, etc.
As such, I don’t have any data to support the idea that this theory is false, any more than anyone here has data to support the idea that this theory is true.
Not sure what your getting at. Scarcity still exists. It will always exist as human beings have finite existences. Humans will always have to make choices as to what their needs/wants are. And the range of choices/decisions that humans have available to them far surpasses the time, energy, labor, goods, etc. that exist. Various systems can be used and have been used in helping humans make choices - but scarcity (the conflict between humans unlimited wants/needs versus finite resources) will always be present.
Market capitalism is an effective allocation system in helping humans make choices and meet their needs/wants. Many of these needs/wants are being met by many societies that have adopted capitalism, but as those wants/needs are met, new ones arise.
I don’t think we’re in disagreement as to the benefits of capitalism. Just trying to clarify what economists and other mean by scarcity.
People have limited needs. But I don’t think people have unlimited wants. If they did, everyone would be constantly miserable because their wants are consistently not met by society. I don’t find that to be the case. You may find specific examples of people who are driven by unreasonable wants (conquering Europe, for example) but I don’t think that in turn means infinite scarcity in the practical sense (there’s only one Europe). A society could not survive long if it did not meet its members wants.
I know what you mean. In light of infinite wants our petty finite haves would keep us damn near suicidal!
But, I think I can beat ep to the punch on this one in that it is assumed that the human race will never stop desiring things. That is, you have finite wants, but were you to have those things there would still be more for you to want.
To say otherwise would be to say that you would be happy never learning another thing again, never performing any specific action, etc etc. This scarcity refers not just to goods and services but time spent aquiring them, time enjoying them, etc etc.
I consider that a bit of a stretch, but you know how those economists are
