What is an economy? Well it’s a way to make scarce resources go around, or at least go further around. Perhaps “further” is the key word.
I was reading Thomas Sowell on the subject recently, in his Knowledge and Decisions he lays out this very clear picture of the fact that economics involves scarcity. It’s a fact that has to be acknowledged and underlies every economic interaction. What’s the other alternative to scarcity? Abundance.
The quest for total abundance is the quest for a utopia, and the admission that there are not enough resources to go around is an admission that we do not live in a utopia. We don’t live in a utopia. There is not enough of everything. There’s only enough when we pay for it.
In some areas this seems obvious, and no one argues that we have everything we would ever need. But when it comes to the areas where governments spend money, no one likes to talk about the scarcity that government itself faces. We can seemingly go on spending forever in whatever areas we desire, no matter what the cost. There’s no realization that we will run out eventually. No one is sounding the wake-up call that we’re not in utopia. What’s the deal? Does no one see it?
It’s not that people don’t see it, although some probably don’t. The reason we don’t have more politicians and bureaucrats sounding the alarm is that they have no incentive to. If they come right out and say that we don’t have enough for certain things, an uproar would result. No one wants to speak the truth. But it’s out there. We have issues.
What can we do to change the incentives facing politicians?
[This post is part 1 of a series]