BifogadFil_Articulating a Holistic Approach of Relative Scarcity and Abundance

Absolute Scarcity and Abundance In a given system, one kind of need or want is measured in relation to its satisfiers resource, with no regard to its alternative use.. Relative Scarcity

Articulating a Holistic

Approach of Relative Scarcity

and Abundance– the Case of Simplicity

1 Introduction 1

1.1 A categorical distinction 2

2 Mainstream economics and the Scarcity Postulate 3

2.1.1 The prominence of scarcity 5

2.1.2 Scarcity in ME analysis – Budget-lines and Indifference-curves 7

3 The Case of Simplicity: relative abundance 10

3.1 Formulating a working hypothesis 11

3.2 Review of Previous Research 12

3.3 Results 18

3.3.1 Text-analysis 18

3.3.2 Interviews 18

4 Elaboration: articulating a holistic approach of relative scarcity and abundance 18

5 Conclusions 19

6 References 20

Definitions and Categories

that try to increase the importance of material wants

that try to reduced the importance of material wants This is the referent of the generalization of the conclusions of this essay

form of complexity.

form of simplicity.

Tibetan Buddhism In this essay viewed as a partial sub-set to VS but as a complete

sub-set to simplicity Accordingly, the interviews conducted refer partially to VS but completely to simplicity The interviewees adhere to this tradition

Voluntary Simplicity (VS) Refers to the intersection between voluntary simplicity which is

most notably related to Duan Elgin as well as Tibetan Buddhism

as manifested in Western society; the main element of this intersection is the deliberate tendency to reduce a persons material wants.

Critical Realism in Economics (CRE) All the general sets of ontological, epistemological and

methodological propositions transferred into a specific set adapted for socioeconomic inquiry

Mainstream Economics (ME) Refers mainly to the neoclassical school of economics It is the

dominant school in the Universities of the Western world One of its essential rationales is the scarcity postulate

Absolute Scarcity and Abundance In a given system, one kind of need or want is measured in

relation to its satisfiers (resource), with no regard to its alternative use If the resources are not enough to satisfy all needs in a given system then absolute scarcity prevails; absolute abundance prevails when the reverse relation exist

Relative Scarcity and Abundance For a given individual, several kinds of needs or wants measured

in relation to a satisfier with alternative use If the satisfier is not enough to satisfy all needs or wants then relative scarcity exists; relative abundance exist in the reverse relation This type of scarcity and abundance is the focus of the essay

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The purpose of this essay is to unfold the scarcity postulate of mainstream economics (ME) 1

in order to develop a holistic understanding of relative scarcity and abundance This is done

by contrasting a typical consumerist (adherent to consumerism; denominated as thecomplexifier) and a voluntary simplicity consumerist (adherent to anti-consumerism;denominated as the simplifier) Following Tony Lawson, this study will utilize contrastive

explanations This means that the social scientist is not concerned with “explaining event X” but with understanding “why event X occurs rather than Y”; where event X and Y are believed

to have the same causal history and thus ought to turned out the same but have not.2 This can

be translated to our case, the case of simplicity (X) and complexity (Y) in the following terms:

what are the reasons for the development of the practice of simplicity rather than complexityfor a give group of people when both simplicity and complexity have actualized in modernmass consuming society (same causal history)? This elicits three more specific researchquestions:

(α) How could a typical consumer and a voluntary simplicity consumer be characterized,respectively?

(β) In which way does the scarcity postulate of mainstream economics apply to the economic analysis of complexity and simplicity, what are its premises and conclusions?

socio-(γ) As we shall see question β will lead to unsatisfactory analytical implications, being so,how could we reformulate or assemble a new theoretical perspective of relative scarcityand abundance with greater explanatory power than the mainstream conceptualizationwith reference to simplicity?

One of the fundamental premises of ME is the scarcity postulate It claims that the world

is saturated by scarcity and that the discipline of economics (ME) is the study of how peoplecope with this fact Nevertheless, it is argued in this essay that mainstream analysis (provided

by ME), and socioeconomic analysis in general which is in close proximity to the scarcitypostulate, generates a static picture of the deeper structures of scarcity and abundance –hindering an adequate explanatory account of these events Consequently, this explanatoryinsufficiency is accounted for by this paper by grounding the analytical arguments in the realworld event of the contrasts between consumerism and anti-consumerist way of life; as aresult, a model of scarcity and abundance with greater explanatory power is presented

In previous research I was able to provide an account of the absolute dimension of scarcityand abundance This was done with reference to the reality of global hunger The scarcitypostulate was disputed on the basis that global hunger persist despite that there is anabundance of food goods An alternative model of the underlying structures of the events ofscarcity and abundance was developed by synthesising necessary concepts from the notions ofCarl Menger, Amartya Sen and the philosophy of critical realism In this essay I will continuethe critique of the scarcity postulate but with focus on the relative dimensions of scarcity andabundance.3

Hence, the essay shall synthesise relevant aspects of ME understanding of scarcity withthe general account of reality provided by critical realism in economics (CRE) The main

1M Parkin, Economics, Harlow: Addison Wesley, 2000, p 36; P A Samuelson and W D Nordhaus, Economics, Boston:

McGraw-Hill, 2001, p 4.

2T Lawson, Reorienting Economics, London: Routledge, 2003, p 86.

3 See below for the definitions of the relative and absolute dimensions of scarcity and abundance

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argument is that, contrary to ME,4 both events of scarcity and abundance are relevant forsocioeconomic analysis and that their underlying structures and mechanisms are inherentlydynamic, holistic and open

The disposition of this essay: first some definitional issues of scarcity; then we willdemonstrate how the scarcity postulate informs mainstream analysis; after that, an abstraction

or ideal-type of anti-consumerism (with reference to consumerism) are constructed in order toguide the analytical argumentation and show the real inconsistencies of ME’s postulate; lastly,these inconsistencies is accounted for by the articulation of a new theoretical approach guided

by this anti-consumerism as well as critical realist ontology

A categorical distinction has to be made between the ‘relative’ and ‘absolute’ dimensions ofscarcity and abundance Relative scarcity refers to generally all wants and needs an individualhave in relation to a given resource with alternative use; whereas absolute scarcity refers toonly one kind of want or need in a given system, but commonly to one need which is defined

as the basic necessities to maintain life (e.g food, water, air) Wants, which is synonymous to

‘wishes’ or ‘desires’, refers to non-necessities of life (e.g cell phones, televisions, football).5

Of course, the distinction between needs and wants is not clear cut, for example, do we need

art, or intellectual stimulation in the same way as we need food? Our biological body would

arguably survive without such stimulation, but maybe our psychological and sociological

development will be impaired

Consequently, relative scarcity arise when the ‘many wants’ (competing ends), or

‘unlimited wants’ in terms of the scarcity postulate, exceeds the given resources The givenresource is commonly expressed in monetary terms, but could also be ‘time’, ‘energy’,

‘cognitive abilities’ or other resource with alternative use For example if you want to be both

a philosopher and a mathematician but does not have the time or cognitive ability to do boththings completely, then some part of your want have to be foregone.6 But if my wants do notexceed the given time or abilities I could be said to experience ‘relative abundance’

Absolute scarcity, like relative scarcity, arise when needs exceed the given means orresources But in opposite to it, absolute scarcity refers only to one kind of want or need in agiven system, but commonly to the necessities of life But if there are enough resources tofulfil given needs, then ‘absolute abundance’ prevails Absolute scarcity is more visible thanrelative scarcity As Raiklin and Uyar writes:

…absolute scarcity which manifests itself during times of social disturbance, economiccrisis, revolution, war, or as a result of natural disasters; this is when the system fails toproduce adequate amounts of items needed for survival (Raiklin and Uyar, 1996, p 54)

Hence, it follows per definition that when the goods available are not enough to satisfy all

human needs of one particular kind in a given system then an event of scarcity emerge;

abundance is the reverse relation.7 Resources can thus not be scarce or abundant as such, theymust be related to a need or want This is the absolute definition of scarcity, that is, when only

one kind of need evaluated with reference to its satisfiers Relative scarcity is when several

4 Cf C Menger, Principles of Economics, trans J Dingwall and B F Hoselitz, Grove City, PA: Libertarian Press; Ludwig

von Mises Institute, 1871/2004 ; L R Robbins, An Essay on the Nature and Significance of Economic Science, London:

Macmillan, 1932/1945 ; Samuelson and Nordhaus, Economics.

5E Raiklin and B Uyar, 'On the Relativity of the Concepts of Needs, Wants, Scarcity and Opportunity Cost', International

Journal of Social Economics 23 (7), 1996, pp 49-56., pp 50, 53.

6Robbins, Essay, p 14.

7Menger, Principles, p 94.

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kinds of needs (ends) are related to a resource that has the capacity to satisfy all the givenneeds; the resource has thus alternative use Relative scarcity presupposes substitutability ofalternative consumption bundles.8

According Raiklin and Uyar, the focus of ME is relative scarcity, which is its raison d’être

– i.e allocation of scarce means (resources) among competing wants (ends).9 Maybe so, butsuch an important demarcation is absent in many prominent books, I argue This conceptual

distinction is never made explicitly by ME This comprises a significant absence in

Samuelson definition of economics10; Smelser and Swedberg characterization of ME;11 orGee’s outline of neoclassical economics.12

This critical identification is supported by Karl Polanyi Polanyi uses the concept

‘substantial economy’ in similar way as ‘absolute scarcity’, whereas ‘formal economy’ issimilar to ‘relative scarcity’.13 Consider Polanyi’s articulation:

…[T]he concept of “economic” in which the two meanings, the substantive and theformal, are naively compounded Such a merger of meanings is, of course,unexceptionable as long as we remain conscious of its restrictive effects But the currentconcept of economic fuses the “subsistence” and the “scarcity” meanings of economicwithout a sufficient awareness of the dangers to clear thinking inherent in that merger.14

As a consequence of this absence, confusion arises about what kind of scarcity ME isactually referring to, is it absolute, relative or both? With this categorical distinction in mind

we now turn to ME and how the scarcity postulate actually conditions economics analysis

2 Mainstream economics and the Scarcity Postulate

Mainstream economics (ME), according to Alec Gee, refers mainly to the neoclassical school

of economics It is the dominant school in the western world University courses that major ineconomics are overwhelmingly grounded on neoclassical notions These notions, embraceamong other, the premise that people rationally maximize utility, moreover, the generalmethodology to study this behaviour is founded on mathematics He writes,

In fact, the orthodox economist [ME] would regard the type of economics taught as beingdefinitive, rather than as belonging to a particular school among alternative equally validschools The neoclassical school is a broad church, offering a methodology and paradigmembracing many sects The high priest of the church are well versed in mathematicaltechnique, which they employ to trace out the consequences of individual behaviour onthe assumption that economic agents constantly strive to maximize their economic well-being.15

8 S Baumgartner, C Becker, M Faber, and R Manstetten, 'Relative and Absolute Scarcity of Nature: Assessing the Roles of

Economics and Ecology for Biodiversity Conservation', Ecological Economics 59 (4), 2006, pp 487-98, p 489; Raiklin and Uyar, 'Relativity'.

9 Raiklin and Uyar, 'Relativity', p 55.

10 Cf Samuelson and Nordhaus, Economics.

11 N J Smelser and R Swedberg, eds., The Handbook of Economic Sociology (Princeton, N.J.: Princeton Univ Press,

1994), pp 3-6.

12A Gee, 'The Neoclassical School', in A G Miller and D Mair (eds), A Modern Guide to Economic Thought: An

Introduction to Comparative Schools of Thought in Economics,Aldershot: Elgar, 1991, pp 71-77.

13 See Polanyi (1957), pp 243-6 for explanation

14 K Polanyi, ed., Trade and Market in the Early Empires: Economies in History and Theory (New York: Free Press, 1957),

p 244.

15 Gee, 'Neoclassical', p 71.

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Compared to economic sociology, which is the harbour of this essay, the neoclassical schoolhas developed a strong dominance or hegemony over other schools (e.g Austrian, feminist,post-Keynesian, and Marxist).16 Nonetheless, the creative environment within economicsociology will enable a holistic understanding of scarcity and abundance which will providetheoretical tools for explaining and understanding phenomenon beyond ME

I want to advance to proposals The first, which is less controversial, is that without thescarcity postulate, the ME model of human action cannot be sustained It is imperative for the

ME analysis that the rational utility maximizing actor is constrained by scarcity Without itthe mainstream analysis looses its applicability Still, how this scarcity arises and theunderlying causes of this event are rarely accounted for in ME; it is either left absent or seen

as a natural event The second proposal is thus that the underlying structures and mechanism

of both an event of scarcity and abundance ought to be holistically perceived, that is, scarcityand abundance is the emergent (synergy) effect of the outcome of social, cultural and naturalstructures; reinforcing the fact that economics is indeed part of sociology, but at the samemoment that sociology is part of economics In the following section I will give an account ofthe former proposal and in the remaining sections of the last

The large majority – if not all – of the definitions of the practice of ME include the notion

of scarcity The scarcity postulate in ME is generally found in every economic book andtextbook.17 Samuelson claim, “The essence of economics is to acknowledge the reality ofscarcity and then figure out how to organize society in a way which makes the most efficientuse of resources That is where economics makes its unique contribution.18 Some versions ofthe scarcity postulate are as follows According to Michael Parkin:

Two facts dominate our lives: [1.] We have limited resources, [2.] We have unlimitedwants These two facts define scarcity A condition in which the resources available areinsufficient to satisfy people’s wants…Scarcity is a universal fact of life It confrontseach one of us individually, and it confronts our families, local communities, andnations.19

Or as the prominent neoclassical theorist Alfred Marshall (1842-1924) articulates the issue Human wants and desires are countless in number and very various in kind: but they aregenerally limited and capable of being satisfied The uncivilized man indeed has notmany more than the brute animal; but every step in his progress upwards increases thevariety of his needs together with the variety in his methods of satisfying them Hedesires not merely larger quantities of the things he has been accustomed to consume, butbetter qualities of those things; he desires a greater choice of things, and things that willsatisfy new wants growing up in him.20

How people chose among these varieties of desires, or allocate limited resources, is the

subject matter of economics, according to Marshall Samuelson asserts that scarce goods are

one of the essential foundations of ME A world of abundance, free from scarcity, ischaracterized as follows:

16Smelser and Swedberg, eds., The Handbook, p 4.

17Menger, Principles, ch 2; Parkin, Economics, p 36; L R Robbins, An Essay on the Nature and Significance of Economic

Science, London: Macmillan, 1935/1945, p 15; Samuelson and Nordhaus, Economics, p 4.

18Samuelson and Nordhaus, Economics, p 5.

19Parkin, Economics, p 36.

20A Marshall, Principles of Economics, London: Macmillan, 1920, p 73.

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People would not worry about stretching out their limited incomes because they couldhave everything they wanted…since all of us could have as much as we pleased, no onewould be concerned about the distribution of incomes among different people or classes

In such an Eden of affluence, all goods would be free, like sand in the desert or seawater

at the beach All prices would be zero, and markets would be unnecessary Indeed,economics would no longer be a useful subject.21

Samuelson promptly emphases that the present world has not research such an utopia:

But no society has reached a utopia of limitless possibilities Ours is world of scarcity, full of economic goods A situation of scarcity is one in which goods are limited relative

to desire An objective observer would have to agree that, even after two centuries ofrapid economic growth, production in the United States is simply not high enough tomeet everyone’s desires If you add up all the wants, you quickly find that there aresimply not enough goods and services to satisfy even a small fraction of everyone’sconsumption desires.22

These citations raise at least two important questions: (1) why does this notion of scarcity playsuch a prominent roll in economic analysis; and (2) exactly in which way does the scarcitypostulate, as a fundamental premise, affect economic analysis Let us examine these twoquestions Still, we have to consult other sources than Samuelson, Parkin and other modernmainstream economists in order to find reasons for the prominence of scarcity in ME – suchaccounts are simply absent

2.1.1 The prominence of scarcity

Carl Menger is the first economist who systematized the notion of scarcity, which laterbecame a fundamental postulate in ME.23 In the marginalist revolution and thus thedevelopment of the marginal utility theory Menger developed some of the fundamentals for anew social science – simultaneously but independently of Staley Jevons and Léon Walras.24For Menger, the end of the human economy is to seek the full satisfaction of human needs It

is an essential project that is fundamental to human existence The act of economizing andthus the economy arises as a consequence of the fact that the world does not contain enoughgoods to satisfy the needs of people Economizing is however both tied to the notion ofabsolute scarcity, but mostly to relative scarcity.25

The relative notion can, for example, be observed even if not explicitly acknowledged inRobbins argumentation,

…by itself the multiplicity of ends has no necessary interest for the economist If I want

to do two things, and I have ample time and ample means with which to do them, and I

do not want the time or the means for anything else, then my conduct assumes none ofthose forms which are the subject of economic science Nirvana is not necessarily single

bliss It is merely the complete satisfaction of all requirements Nor is the mere

21Samuelson and Nordhaus, Economics, p 4.

22 Ibid.

23 Hayek in Menger, Principles, p 18; L R Robbins, A History of Economic Thought the Lse Lectures, S G Medema and

W J Samuels (eds), Princeton, N.J.: Princeton University Press, 1998, p 277.: my emphasis ; E Roll, A History of Economic

Thought, London: Faber & Faber, 1973, p 387; N Xenos, Scarcity and Modernity, London: Routledge, 1989, p 68.

24A G Miller and D Mair, A Modern Guide to Economic Thought: An Introduction to Comparative Schools of Thought in

Economics, Aldershot: Elgar, 1991; B Sandelin, H.-M Trautwein, R Wundrak, and Studieförbundet Näringsliv och

samhälle, Det Ekonomiska Tänkandets Historia, Stockholm: SNS förl., 2001, p 79-81.

25 Baumgartner, Becker, Faber, and Manstetten, 'Scarcity' ; Raiklin and Uyar, 'Relativity'.

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limitation of means by itself sufficient to give rise to economic phenomena If means of

satisfaction have no alternative use, then they may be scarce, but they cannot beeconomised The Manna which fell from heaven may have been scarce, but, if it wasimpossible to exchange it for something else or to postpone its use,it was not the object

of any activity with an economic aspect Nor again is the alternative applicability ofscarce means a complete condition of the existence of the kind of phenomena we areanalysing.26

Accordingly, the multiplicity of ends has no necessary economic interest, nor the limitation ofmeans as such sufficient to qualify as an economic phenomenon, nor again the alternative use

of the means in question adequate for economic analysis: it is when all of this conditions arefulfilled simultaneously that the significance of the economic arise – that is, on the basis ofrelative scarcity Consequently, for Robbins the relevance of the economics science lies in thefollowing version of scarcity:

…when time and the means for achieving ends are limited and capable of alternative application, and the ends are capable of being distinguished in order of importance, then

behaviour necessarily assumes the form of choice Every act which involves time andscarce means for the achievement of one end involves the relinquishment of their use forthe achievement of another It has an economic aspect.If I want bread and sleep, and inthe time at my disposal I cannot have all I want of both, then some part of my wants ofbread and sleep must go unsatisfied If, in a limited lifetime, I would wish to be both aphilosopher and a mathematician, but my rate of acquisition of knowledge is such that Icannot do both completely, then some part of my wish for philosophical or mathematicalcompetence or both must be relinquished.27

This state of insufficiency, or scarcity, is by now made static, unchanging and thusuniversally applicable; A feature of our natural being or the human condition He continuous: The ends are various The time and the means for achieving these ends are limited andcapable of alternative application At the same time the ends have different importance.Here we are, sentient creatures with bundles of desires and aspirations, with masses ofinstinctive tendencies all urging us in different ways to action But the time in whichthese tendencies can be expressed is limited The external world does not offer fullopportunities for their complete achievement Life is short Nature is niggardly 28

Nevertheless, even if there is some reasonableness to this claim it harbours severalimplicitly premises which is disputable: the main one, that scarcity is a natural feature of thehuman condition The naturalness of scarcity can also be observed in Menger’s work Even ifthe question seems to be more complicated for Menger it lays nonetheless in convergencewith Robbins’ reasoning Menger begins with the absolute definition of scarcity andabundance but moves step by step into the domain of relative scarcity – which ultimatelydefines the subject matter of economics Because the set of goods available for an individual

is generally not enough to satisfy his complex of needs He argues,

… in ordinary life the relationship between available goods and our needs is generally

much more complicated Usually not a single good but a quantity of goods stands

26Robbins, Essay, pp 13-14.

27 Ibid , p 14.

28 Ibid , pp 12-13.

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opposite not a single concrete need but a complex of such needs Sometimes a larger and

sometimes a smaller number of satisfactions, of very different degrees of importance,depends on our command of a given quantity of goods, and each one of the goods hasthe ability to produce these satisfactions differing so greatly in importance.29

He illustrates the principle of scarcity with Robinson Crusoe, the isolated economizingindividual Imagine Crusoe living alone on an island, where his only needs are dependentupon the supply of fresh water Crusoe needs (1) one unit of water daily for the maintenance

of his need for liquids, (2) nineteen units of water for the animals, which provide him withmilk and meat, (3) forty units, for the preservation of his health and well-being, namely toclean his body, his clothes, and his implements, and (4) forty additional units, some to supplyhis flower garden with water and some for additional supply for some animals to provide himwith mere companionship Crusoe needs consequently a total of hundred units of water tocover all this wants and needs.30 Now assume two cases The first case, where the supply ofwater on the island is enough to support at least thousand of individuals with needs and wantsvery similar to Crusoe’s – a situation of abundance Then Crusoe would have no reason toeconomize Additionally, in this case the subject matter of ME does not apply

The second case is where the supply of water on the island is only sixty units of water – asituation of scarcity In this case Crusoe is forced to economize and manage best he can, hiswell-being and ultimately his existence is threatened How does he manage in the mostoptimal way? In principal the problem is about allocating the limited (scarce) water of sixtyunits to his four needs (or ends in Robbins view) Now four different ends are competingrelative to scarce means Consequently some needs, or ends, have to be foregone – but whichones? According to Menger, it is very likely that Crusoe will value his first and second needmore because of the larger utility he derives from such consumption If so, he will consumetwenty units of water and left with forty units Moreover, it seems that the third need has somepriority over the forth Therefore a greater amount of the rest of the units of water will beconsumed on the third need – however, incomplete – and the forth need either left totallyunsatisfied or beggarly satisfied.31 Now, even if Crusoe is an unrealistic approximation of reallife events, he is the model of how ME reasons about real events what ever the needs, wants

or ends are This fact can be illustrated further with a more modern textbook example, namelybudget-lines and indifference curves that is in convergence with Menger’s reasoning

2.1.2 Scarcity in ME analysis – Budget-lines and Indifference-curves

Even if the scarcity postulate permeates numerous economic models and economics thinking

in general, in this essay only one such application is demonstrated, namely curves and the budget-lines We will apply its logic to Crusoe’s situation It is a simpletextbook example

Indifference-29Menger, Principles, p 129.

30 Ibid , p 133.

31 Ibid , pp 133-36.

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Figure 1 Crusoe’s most preferred consumption combination in a situation of relative scarcity

Figure 1 is an illustration Crusoe’s situation and thus his way of allocating water supplywith regard to his third and forth need The budget-line is a representation of the budget

constraint (Crusoe’s water supply) The horizontal axel represents good X (which satisfies Crusoe’s forth need) and the vertical axel represents good Y (Crusoe’s third need) The

indifference curve represents any combination of consumptions possibilities which Crusoe isbelieved to be indifferent to.32 Moreover, it is stated by ME that persons consume in a waythat yields maximum utility (rational actor) and therefore consumer along any point at thebudget-line Consuming above this line is not possible because the means are limited,consuming below is possible but believed to be an ineffective way of utilizing a person’smeans (monetary budget, or Crusoe’s water supply) Therefore, the rational actor will choosethe point where the indifference curve is tangent to the budget-line Hence, the point wherethe indifference curve is tangent to the budget line is the predicted consumption combination

(a units and b units) that Crusoe chooses; thus there is a well-defined, or unambiguous,

solution to the problem of how to allocate scarce resources, or means.33

It is clear from the example of Crusoe, in the first situation where water supply wasabundant, that he had much more water in the river than he needed – supply was enough forthousands of individuals with needs similar to Crusoe In that situation he does not have torelinquish any of his needs; he reaches his maximum satisfaction at hundred units of water,now even if he uses, say two hundred of units, he will reach a point where furtherconsumption of water (say tree hundred of units or above) will impede his well-being and thushis satisfaction Drinking too much of water will harm his bodily functions and eventually killhim (his first need); the animals will refuse to drink more water because of saturation, andstop producing milk or produce with significantly lower quality (second need); cleaning yourclothing, and implements too often will of course hamper their functionality (third need);supplying the flower garden with too much water will eventually destroy the garden (forthneed) Therefore consumption of a particular good has a saturation point In ME terms, thismeans that Crusoe will consume below his budget line But at which point we may ask?

32 Indifference curves can be represented on higher and lower levels of satisfaction, U 1 is only one possibility

33Samuelson and Nordhaus, Economics, pp 102-07.

Good X (Crusoe’s (4) need)

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Figure 2 Crusoe’s preferred consumption combination in relative abundance

See Figure 2, any point below the budget line that will not hamper his well-being is sufficientfor Crusoe, I argue This means that any point along any given indifference curve, forexample, U1, U2, U3 or Un is sufficient for Crusoe; but not more than his needs can absorb,which is assumed to be around three hundred units of water If he consume more on his fourneed, say what is supplied by the whole river, along U4, then he would either eliminatedhimself, his garden or his animals In this situation of great relative abundance ME’s analysishave little to contributed, in the worst case scenario it will even collapse This is so, becausethere is not one well-defined solution to the question (What consumption combination Crusoechooses), but infinite number of solutions In this case, and all other similar cases ME’sanalysis is redundant Accordingly, the scarcity postulate play an essential role in ME’sanalytical framework in order to uphold relevant answers to economic issues

Maybe this is the reason why the scarcity postulate is formulated in so general and staticterms, that is, by claiming that there are unlimited wants and needs; and with no satisfactoryaccounts of such claim This gives ME a very general but firm analytical grasp of variousphenomenons, from explaining consumption choices to analyzing addiction and crime

What is disputed in this essay is the continuous unreflecting role the premise of scarcity isallowed to play in economic analysis A fundamental question ought to be; what causesrelative scarcity (and abundance) to arise in the first place; what are the social, cultural andnatural conditions for such an event to arise in the first place? It seems to me that ME haslittle to offer for answering that question

The aim of this paper is thus to fill this gap by articulating an alternative model of relativescarcity and abundance The new model shall demonstrate at least three points: (1) bothscarcity and abundance is equally relevant for a socioeconomic theory in order to explainhuman action; (2) the underlying mechanism of scarcity and abundance is an important socioscientific goal in order to understand why scarcity and abundance arise; (3) both (1) and (2) is

a sine qua non for emancipatory practices The next section will demonstrate by a case study

and by contrastive explanation how these three points hinge on each other It is however notuntil the final section of this essay that we reach a more satisfactory account of the issue ofrelative scarcity and abundance Now we turn to the case of simplicity which shows that a