What is Scarcity

Chapter 3, Section 2: What is Scarcity

"Better more than less" is how economic goods are defined, and that defines "scarcity" as well. That's saying, all economic goods are scarce and insufficient. What then does "insufficient" mean? If the breeze from a river and bright moon in mountains are, like Su Dongpo the Poet said, inexhaustible, they are sufficient (Translator: the poet lived almost 1000 years ago). In that way, they can only be free goods — although in today's real world breezes and bright moon are no longer easy to get and thus have become economic goods. Strictly speaking, "insufficiency" doesn't have to be linked with the quantity supplied. For example, there are more good eggs than bad ones, yet good ones are insufficient and bad ones are excessive. Good eggs are greatly needed and thus insufficient; bad ones are disliked by everyone, so even a few are already excessive.

If a good is not demanded, there'd be no "better some than none" for it; and if supply of the good is not insufficient, there'd be no "better more than less". So "scarcity" happens only when a good is demanded and its supply insufficient. When demand increases, more supply (still limited) remains scarce; if demand decreases, limited supply may become abundant. That's to say, scarcity is determined relative to demand.

A scarce item — an economic good — is something whose supply cannot meet people's demand. So the item is better more than less. As it's better more than less, if one wants more of it, he must pay a certain sacrifice. If nobody is willing to pay a sacrifice for more of the item, it cannot be counted better more than less, which is logically inarguable. Therefore, any item, that there is someone willing to pay a sacrifice for more of it, is scarce and insufficient, thus an economic good. On the market, the sacrifice we need pay is price. So we can conclude anything that has a price is scarce and insufficient. In some societies — like extreme communist society — there is no such a market and thus no price for a good, but sacrifice doesn't vanish. Therefore we have another assertion: an item without a price can possibly be economic good as well, and scarce of course — as is scarce (people want more), some sacrifice is inevitable.