Free Capitalist Network - Community Archive
Mises Community Archive
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.

Scarce and Non-scarce goods

rated by 0 users
This post has 35 Replies | 5 Followers

Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker Posted: Sun, Aug 15 2010 2:30 PM

I thought everyone would enjoy a recent correspondence I had with Kinsella.

I wrote him as follows:

How does the presence or absence of a good's consumed physical space affect its scarcity? Non-scarce goods tend to consume no space but scarce good tend to. I can think of very few exceptions here - fire consumes space but is non-scarce but ideas, images, text, techniques, etc. consume no space - unless I'm forgetting something obvious.

He responded as follows

hmm. I was having a talk w/ my kid yesterday--I was explaining the volume of a box. And that it is three dimensional.

I then asked him how many dimensions a piece of paper has. He first said two dimensions. I said so it has length and width, but no thickness at all? He thinks, then says THREE DIMENSIONAL! He got it. I said imagine a piece of paper so flat that it had no thickness at all. Would it even exist? No. It would be more like an imaginary rectangle or square that you are just thinking about.

I can't think of any existing scarce resource that does not occupy space in some manner.

BTW I was thinking about our "new dualism." The standard dualism concerns the realms of causality and teleology. Causality concerns causal laws, that pertain to the use of means to achieve ends: the means selected must be causally able to help achieve the end desired. Teleology refers to explanations about the purposive action itself--it talks about the actor as an actor, not as a causally determined cloud of particles, but as a choosing person having goals, desires, preferences, ends.

Both realms have to do with scarce means: causal laws tell you what scarce resource will serve as a means to achieve an end; the end itself is some change in the configuration of scarce things--some rearrangement.

Human action also deals with scarcity. But human action also is guided by information. So human action--the teleological realm--bridges the gap across the scarce and non-scarce realms. It takes non-scarce information and uses it to change the scarce world.

So if we view the universe as divided into scarce and non-scarce realms, causal laws apply to the scarce realm (and scarce things have some physical or space-aspect?), and teleological or praxeological rules apply to both. I think.

Publisher, Laissez-Faire Books

  • | Post Points: 65
Top 75 Contributor
Male
Posts 1,289
Points 18,820
MaikU replied on Sun, Aug 15 2010 3:22 PM

very interesting... thanks for posting.

"Dude... Roderick Long is the most anarchisty anarchist that has ever anarchisted!" - Evilsceptic

(english is not my native language, sorry for grammar.)

  • | Post Points: 5
Not Ranked
Posts 20
Points 265
soe replied on Tue, Aug 17 2010 7:26 AM

jtucker:
How does the presence or absence of a good's consumed physical space affect its scarcity?

It's not the consumed physical space which affects scarcity. Material things consume some physical space; but some of those things are scarce, some aren't (e.g. water in oceans). Their scarcity depends on their amount, whether they are plentiful or not.

Non-material things cannot be consumed, destroyed by using; their non-material nature is the reason why they cannot be consumed (and why they aren't scarce), and it is also the reason why they don't consume any physical space. So we cannot say that absence of consumed space is affecting scarcity.

  • | Post Points: 20
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 7:31 AM

As you say, the non-material nature of non-material things is the reason they are non-scarce. I think that's probably right. But one exception besides ocean water (which is actually scarce if you think of shipping lines): fire. It is a non-scarce good that takes up material space.

Can anyone think of another real-world case?

Publisher, Laissez-Faire Books

  • | Post Points: 20
Top 50 Contributor
Male
Posts 2,940
Points 49,115
Conza88 replied on Tue, Aug 17 2010 7:47 AM

To get fire though, don't you need to use scarce goods?

* Still thinking this through..

Ron Paul is for self-government when compared to the Constitution. He's an anarcho-capitalist. Proof.
  • | Post Points: 20
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 7:57 AM

Yes of course. In the same way, you have to have a computer to send email. All things mix scarce and non-scarce goods. A Lady Gaga concert is a scarce person on a scarce stage using scarce equipment to deliver what becomes a non-scarce good.

Publisher, Laissez-Faire Books

  • | Post Points: 20
Top 50 Contributor
Male
Posts 2,940
Points 49,115
Conza88 replied on Tue, Aug 17 2010 8:23 AM

Ice? Or do I still not get it? lol

By the way, was it this article which sparked the correspondence?

Ron Paul is for self-government when compared to the Constitution. He's an anarcho-capitalist. Proof.
  • | Post Points: 20
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 8:34 AM

Well, ice is just frozen water and water is certainly a scarce good. So is air. Just the morning, I came in the office and left the door open and someone said, "shut the door, you are letting the air out!"

ha ha. In any case, it is true that air is a scarce good.

Ok, here is an example of a non-scarce good that takes up space. Consider two people in paradise with a sea of bananas. You can eat and eat and never get to the end of them. Non-scarce good. However, two provisos. The bananas cannot be subject to spoiling. And there can be no free trade between paradise and the regular world, else one of the two residents might arbitrage the bananas at a price and eventually their quantity would matter.

Mostly in the real world, non-scarce goods take up no space (images, ideas, techniques, methods, recipes), and the only exception I can think of is fire.

anyone else ?

Publisher, Laissez-Faire Books

  • | Post Points: 20
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 8:35 AM

oh and yes that article helped push this forward, but Stephan and I are working on a non-scarce goods manifesto.

Publisher, Laissez-Faire Books

  • | Post Points: 20
Not Ranked
Posts 20
Points 265
soe replied on Tue, Aug 17 2010 9:03 AM

Fire is "consumed" immediately as it is produced, if you don't add fuel, it will die out.

I'm afraid you'll need to define "non-scarce good". Isn't it a contradictory term? Something what is not scarce cannot be an (economical) good. All goods are scarce. Things which are not scarce are general conditions of human action, like air which you breath. Can you imagine that you won't have enough air to breath? Or you need air to make a fire, but you don't need to worry about it if you are in an open space. The air in your room is something else - it was probably cooled by airconditioning, and so it is scarce, it is an economic good.

Maybe we can imagine situation when oxygen would become scarce. But right now it isn't, and we are talking about real, not hypothetical world... I thougt.
 

  • | Post Points: 35
Top 500 Contributor
Posts 304
Points 4,800
cporter replied on Tue, Aug 17 2010 9:28 AM

soe:
Maybe we can imagine situation when oxygen would become scarce. But right now it isn't, and we are talking about real, not hypothetical world... I thougt.

I'm kind of a hardliner when it comes to defining scarce and non-scarce goods. When discussing economic concepts I think there is an important different between goods that are truly non-scarce and goods that are scarce but plentiful enough that it doesn't matter for the purposes of the discussion. Air is certainly one of the latter. If you look at Jeffrey's list of non-scarce goods (minus fire) you'll notice that they are all actually ways in which purposeful actors use scarce goods; ways to structure scarce goods into something with meaning above that of their simple physical properties. Meaning that can only be comprehended by actors.

That's why I think fire is a scarce good. How to make fire, the particular ways to generate hotter fire, etc. are certainly not scarce but, strictly speaking, fire is just stuff you owned transformed into another state. Much like ice is to water.

  • | Post Points: 5
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 9:30 AM

We can define non-scarce in the same way that Menger, Fetter, Mises, and Rothbard did, something that exists in such superabundance that it no longer needs to be rationed by economic means. In practice, non-scarce goods are those things that can be recplicated without displacing or depreciating the integrity of the original. Ideas, speech, images, sound are all examples of non-scarce goods.

Non-scarce goods do however having economic value. Here is an example I ran into this morning. There were two boxes of baking soda on the store shelf. They were identical in size and contents and packaging. One was $1 and one was $1.50. The first one was a store brand and the second one was Arm and Hammer. What accounts for the difference in the selling price? It is the confidence and good will that consumers have toward the name brand product. Confidence and good will are non-scarce goods, capable of non-finite replication without displacement. I can develop good will and it doesn't take it from you. We can all have an unlimited quantity of it.

Tell me where this is wrong.

Publisher, Laissez-Faire Books

  • | Post Points: 35
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 9:33 AM

On fire, I would say it is a non-scarce good because of the absence of displacement. If I take your car, you no longer have it. But I can't take your fire from you. You give me a flame and I can have a flame without taking yours. To be sure, I can douse your flame but that is taking the scarce good of the fuel that makes the flame burn.

Publisher, Laissez-Faire Books

  • | Post Points: 5
Not Ranked
Posts 86
Points 2,020
mgmcintyre replied on Tue, Aug 17 2010 10:10 AM

Hydrogen "consumes" space.

  • | Post Points: 5
Top 500 Contributor
Posts 304
Points 4,800
cporter replied on Tue, Aug 17 2010 10:43 AM

jtucker:
We can define non-scarce in the same way that Menger, Fetter, Mises, and Rothbard did, something that exists in such superabundance that it no longer needs to be rationed by economic means.

I don't really like that definition. For most practical purposes it's good enough but it leaves room for non-scarce goods to transition to scarce goods which I'm not fond of. I think completely segregating the two in a way that doesn't allow for reclassification based on the surroundings (am I talking about air on earth in 200 BC, or air in China in 2005, or air on Mars?) is more definitional.

For this conversation it's not really a big deal, though.

jtucker:
In practice, non-scarce goods are those things that can be recplicated without displacing or depreciating the integrity of the original.

This is interesting. Fire definitely fits here, as you later show. To take someone's fire you'd really be taking their fuel.

edit: I agree with Jeffrey that non-scarce goods have economic value.

  • | Post Points: 50
Not Ranked
Posts 86
Points 2,020
mgmcintyre replied on Tue, Aug 17 2010 10:53 AM

xxxxxxxxxxxxxx

  • | Post Points: 20
Not Ranked
Posts 86
Points 2,020
mgmcintyre replied on Tue, Aug 17 2010 10:58 AM

Isn't it strange that Hydrogen, the most abundant element in the universe, could be considered a scarce good under certain circumstances (fuel on a space-ship), while "good-ideas" are very rare and in demand, yet can't be considered scarce.

Maybe ideas are scarce in another way:  human-brains are scarce and can produce ideas/thoughts only at some finite rate.  Therefor there are only some given amount of thought/ideas that can "exist" or have ever "existed" at any given time. (thinking of ideas as some physical configuration of chemicals, brain-matter, and electricity)

Anyway, just some random thoughts.

  • | Post Points: 5
Top 25 Contributor
Male
Posts 4,922
Points 79,590
Autolykos replied on Tue, Aug 17 2010 11:07 AM

mgmcintyre:
Isn't it strange that Hydrogen, the most abundant element in the universe, could be considered a scarce good under certain circumstances (say, fuel on a space ship) while "good-ideas" are are extremely rare and in demand, but are not scarce?

Maybe ideas are scarce in one way: human-brains are scarce, time is limited, and thoughts can only be generated by brains at some finite rate. 

Just some random thoughts.

Interesting thoughts, and I largely agree.  However, libertarians typically consider physical finity and economic scarcity to be two different things.  So while there's a finite number of human brains (or a finite amount of "human-brain matter"), one person's "use" of a human brain doesn't conflict with another's "use" of it -- in the sense of ideas.  (Zombies would consider human brains to be economically scarce.)  And certainly there are opportunity costs to devoting one's time on an idea for X as opposed to an idea for Y.  But again, once an idea is produced, one person's use of it cannot conflict with another person's use of it.

Essentially, the concept of "intellectual property" is a bad analogy to physical property, specifically the physical products of physical labor.  The analogy goes like this: as one owns what he physically produces, so he owns what he mentally produces.  But the non-scarcity of ideas (again, in an economic sense) demolishes this analogy.  This means that physical labor and mental "labor" are not equivalent.  While both take time, effort, and therefore necessarily incur opportunity costs, the products of each are fundamentally different in certain ways.

The keyboard is mightier than the gun.

Non parit potestas ipsius auctoritatem.

Voluntaryism Forum

  • | Post Points: 20
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 11:27 AM

By the way, I don't like that definition of non-scarcity either. I only use it to seque out of conventional defintions. For my own part, in my own belief, I don't see that the real world offers any examples of non-scarce goods that are not infinitely replicable goods. I would would define non-scarcity in those terms, but I don't think it is necessary to do so in order to make the point that we live in a world with two realms: scarce and non-scarce.

Publisher, Laissez-Faire Books

  • | Post Points: 5
Top 25 Contributor
Posts 2,966
Points 53,250
DD5 replied on Tue, Aug 17 2010 12:03 PM

jtucker:
Confidence and good will are non-scarce goods, capable of non-finite replication without displacement.

I think there is a serious  problem with this even according to your own criteria.

The confidence associated with a particular product is an inherent  feature of the total product that cannot be replicated or duplicated.  I cannot just go and tap into that reputation and attach it to another product without the chance of degrading the original product.  For example, if I steal it by say, creating a counterfeit, I can certainly degrade the original if the consumer is unable to tell the counterfeit from the original.  Such is not the case for music, ideas, etc....  

 

jtucker:
 I can develop good will and it doesn't take it from you.

 

Developing good will requires scarce resources just like every other part that comprises the final product.  

  • | Post Points: 5
Top 25 Contributor
Posts 2,966
Points 53,250
DD5 replied on Tue, Aug 17 2010 12:05 PM

cporter:
edit: I agree with Jeffrey that non-scarce goods have economic value

The law of diminishing marginal utility says otherwise.  It has value, certainly.  But not economic value.

 

  • | Post Points: 5
Top 150 Contributor
Posts 634
Points 12,685

Hi Jeff:

"Well, ice is just frozen water and water is certainly a scarce good. So is air."

I think this conception of things implicitly objectifies scarcity, conceiving scarcity as an objective quality of the things themselves, rather than conceiving scarcity as a feature of the attitude of the individual actor towards the object in question.

Here, we conceive that "water is (objectively) scarce," "air is (objectively) scarce."

When we approach things this way, we ask: "what objects are scarce?"  We imply that scarcity is an objective quality of the things.

But there is another way to approach the concept of scarcity, and that is to consider scarcity as a feature of goal-directed action.  In this view, things are scarce, not objectively, but to the individual subject who tries to obtain or attain the thing (or state of affairs) in question.

To the man on a boat, air is "superabundant."  To the man 100 feet below the surface, air is scarce.  We can conceive scarcity by theoretical subjectivism, and need not conceive it by philosophical objectivism or realism.

By acting to attain some thing, or some situation, the actor reveals to himself that this thing or state of affairs is "scarce" to him.  I.e., scarcity is feature or category of human action.  The attempt to attain X already implies the "not having enough" of X. 

Thus, we need not attempt to objectify scarcity.  We can conceive scarcity entirely by methodological individualism as a feature of individual action.

Paraphrasing Mises:  "Scarcity is within us; it does not come from without."

I tried to make this point in my critique of Hoppe's argumentation ethics.  More recently, Bob Schaefer made this point in his critique of Kinsella's IP theories.   I don't know whether Kinsella ever replied to this particular point of Schaefer's. 

Are you, or is anyone aware of an article that specifically deals with the topic of the objective versus the subjective conception of scarcity?

I think it is important to at least have an awareness of the philosophical and theoretical implications of utilizing an objective as opposed to a subjective conception of scarcity.

Adam

"It would be preposterous to assert apodictically that science will never succeed in developing a praxeological aprioristic doctrine of political organization..." (Mises, UF, p.98)

  • | Post Points: 35
Top 50 Contributor
Male
Posts 1,899
Points 37,230

I personally, kind of going along with Adam's post above me, don't really view anything as non-scarce.  We are all subject to time, and as long as time is scarce, everything else will be as well.  I can have all the ideas in the world, but I will only be able to have them for so long.

I'm no professional, just the way it seems to me.

In States a fresh law is looked upon as a remedy for evil. Instead of themselves altering what is bad, people begin by demanding a law to alter it. ... In short, a law everywhere and for everything!

~Peter Kropotkin

  • | Post Points: 20
Top 150 Contributor
Male
Posts 597
Points 12,920
Staff
SystemAdministrator
jtucker replied on Tue, Aug 17 2010 1:14 PM

I'm not sure that I really understand Adam's post. on the issue of copyability, there is a clean division here. My words can be taken by you without removing them from me. Not so my shirt. This sums up the scarce/non-scarce distinction.

Publisher, Laissez-Faire Books

  • | Post Points: 35
Top 50 Contributor
Male
Posts 1,899
Points 37,230

Ya, just in the end there will only be so many words you could have said.  If we take scarcity as subjective to the actor, all things are scarce unless he is immortal.

There's only so many breaths a mortal can take, only so many ideas a mortal can think.

In States a fresh law is looked upon as a remedy for evil. Instead of themselves altering what is bad, people begin by demanding a law to alter it. ... In short, a law everywhere and for everything!

~Peter Kropotkin

  • | Post Points: 5
Top 150 Contributor
Posts 634
Points 12,685

Hi Jeff:

Perhaps.  But you stopped short of saying "words are scarce/non-scarce" or "my words are scarce/non-scarce."

My point was that we can approach the concept of scarcity by methodological individualism and theoretical subjectivism.

In this conception, whether your words are scarce to me or not, depends on whether I want more of your words, or believe I already have enough of them.

If you utter a single word, I may consider this less than I want, and I may try to elicit or obtain more words from you.  (your words are scarce to me)

If you utter a single word, I may consider this sufficient, and not try to elicit or obtain more words from you.  (I have enough words from you)

Here, we consider scarcity as a feature of my individual action, not as a feature of the universe of objects, nor as a feature of intersubjective or intertemporal processes.

"It is of primary importance to realize that parts of the external world become means only through the operation of the human mind and its offshoot, human action. External objects are as such only phenomena of the physical universe and the subject matter of the natural sciences. It is human meaning and action which transform them into means. Praxeology does not deal with the external world, but with man's conduct with regard to it. Praxeological reality is not the physical universe, but man's conscious reaction to the given state of this universe. Economics is not about things and tangible material objects; it is about men, their meanings and actions. Goods, commodities, and wealth and all the other notions of conduct are not elements of nature; they are elements of human meaning and conduct. He who wants to deal with them must not look at the external world; he must search for them in the meaning of acting men." (HA, 3rd rev. p.92) (emphasis added)

Regardless of whether I can convince you of the theoretical utility of a subjective conception of scarcity, are you or is anyone else aware of an article that treats this subject (objective versus subjective scarcity) in any depth?   I'm not the only one who has brought this up.  As I mentioned, Bob Schaefer specifically pointed out to Kinsella that Kinsella was using an objective conception of scarcity. 

Bob Schaefer, "Response to Kinsella: A Praxeological Look at Intellectual Property Rights"  2009

Adam

 

 

"It would be preposterous to assert apodictically that science will never succeed in developing a praxeological aprioristic doctrine of political organization..." (Mises, UF, p.98)

  • | Post Points: 5
Not Ranked
Posts 86
Points 2,020

I like Adam Knotts definition: Scarcity is subjective in the sense that if someone is actively seeking something, it is scarce to them.  It is more general and more precise.  However, it also applies to concepts (I'm seeking happiness, etc.).

I wonder how you see the "physical/imaginary" divide under this definition.

  • | Post Points: 35
Top 150 Contributor
Posts 634
Points 12,685

"Scarcity is subjective in the sense that if someone is actively seeking something, it is scarce to them.  It is more general and more precise.  However, it also applies to concepts (I'm seeking happiness, etc.)."

And explains for example the following notions:

"Does anyone have any ideas?"   (seeking ideas)

"Where is that recipe?"   (seeking a recipe)

"I need to know more"   (seeking knowledge)

*****

A few pages discussing the concept of scarcity from the aforementioned Hoppe critique:

 

The Concept of Scarcity in Social Science

Austrian School social scientists, beginning with Carl Menger and continuing through Mises, arrive at a logically consistent social theory accounting for a wide range of social phenomena. What characterizes praxeology as it expands to account for an ever wider range of phenomena, is its ability to conceive things less in "objective" and "wholistic" terms, and more in terms of how they subjectively appear from the point of view of the individual actor.

In this essay we propose a subjectivist concept of scarcity consistent with the methodological individualism that is the hallmark of praxeology.

Methodological Individualism

"Here again, it is very important to recognize that what is significant for human action is not the physical property of a good, but the evaluation of the good by the actor."(MES p.19)

With these words professor Rothbard (at a stage of his intellectual career when he was more a student of Mises), put forth the key to the true method of praxeology. This is the method that led Menger to his original insight thus founding the Austrian School of economics and social thought.

Methodological individualism is more than just the idea that only individuals act, and that collectives do not act. Methodological individualism is the specific method for discovering and unfolding the logic of human action. The logic of human action is discovered by contemplating the relationships inherent in our own individual acting reality.  Those relationships are the necessary relations that inhere in the recurring experiences of individual action.  And methodological individualism is the procedure of conceiving those relationships as they exist in individual action. 

Properly understood, methodological individualism is not something that is to be contrasted with how the philosophers of socialism approach society.  Rather, it is a procedure of conceptualizing that helps and guides the praxeologist to make his own account of social phenomena more consistent.  In short, methodological individualism is the method for advancing praxeology from a less consistent state to a more consistent state.

Air and Scarcity

In Austrian School literature it is common to see reference made to the concept of scarcity, and to the example of air as constituting a prime example of something that is not scarce. Usually such references to air as an example of a non-scarce resource, qualify this by saying something like "in most cases" or "under normal circumstances", etc.

In considering air with respect to its physical extension and with respect to its physical volume in comparison to that of the human body, it is undeniable that air is abundant in this sense. But considered from the point of view of individual action, there are many cases in which air is scarce. So many in fact, that one may be compelled to re-think the idea that air is a free good; a good that an individual does not have to strive to attain as he does all others.

Is air not scarce for the person swimming under water or for the person climbing a tall mountain? Is air not scarce for all those flying at high altitude in commercial jetliners? Is air not scarce for all those people with oxygen tanks, for the small child under the covers of a bed, or for the sweaty person trapped for a short time with his shirt over his head as he tries to take it off? Is air not scarce for those working underground, or those travelling through long tunnels? Is air not scarce for those living in highly smog polluted areas? Is air not scarce for someone with a serious coughing spell, or with someone laughing so hard they are having a "no-breather"? Is air not scarce when someone takes a deep breath, because they feel they do not have enough air?

In short, is air not scarce for all those who find themselves in circumstances where the supply of air is not guaranteed, and where therefore they must "strive to attain" it in some way?

This is obviously an important question Austrian scholars need to ask themselves, especially if they are intending to make the concept of scarcity central to their theory or argument.

Scarcity as a Category of Action

In a formal conception of human striving (human action) we can conceive that not only "value" is subjectively determined in individual action, but also that "supply" is subjectively determined in individual action.

Whether or not the firewood next to A’s house constitutes his supply, and/or whether A has a sufficient supply of firewood, is not an objective quality of the firewood, but rather subjectively determined by A’s view of things.

The scarcity of any good (whether or not individual A strives to attain a good or more of a good) is subjectively determined within the reality of his own action.  Or: Scarcity is "revealed" to the individual within the reality of his own action, in his attempting to attain a thing or more of a thing.  By striving to attain some thing, actor A reveals that for himself, he does not have enough of it, i.e., that it is "scarce" for him.

Scarcity is a universal aspect of human action and properly understood as a formal concept of praxeology. It is not a condition of “external reality”, sometimes present and other times not.  Rather, scarcity is a necessary feature of action.  In conceiving action formally in terms of striving and attainment, we realize that the concept of scarcity is already implied in the actor’s striving to attain some thing. 

The attempt to attain some thing or state, is the not having of a wanted thing or state.  And this not having of a wanted thing is a short supply, or: scarcity.  The actor universally encounters scarcity, because the actor is at all times "striving to attain", and thus at all times revealing an insufficient supply (i.e., scarcity) of some thing.

Stated simply, scarcity is already accounted for in human action when we conceive that action is aiming at ends or striving to attain.

What prevents one from seeing this more clearly, is likely the fact that as the concept of scarcity originated with economic science, it became associated with the ordinary economic goods of exchange. The majority of such goods are conceived as physical/tangible goods flowing across borders or being physically exchanged between owners. And thus scarcity came to be associated with the objective state of things, rather than with the subjective view of the individual. The Austrian School social scientist came to classify scarcity as an empirical rather than a categorial phenomenon.

*****

Professor Hoppe’s conception of scarcity, in both its subjective and objective aspects, is evident in the following passage:

"Knowledge is a category quite distinct from those that I have explained earlier—from ends and means. The ends which we strive to attain through our actions, and the means which we employ in order to do so, are both scarce values. The values attached to our goals are subject to consumption and are exterminated and destroyed in consumption and thus must forever be produced anew. And the means employed must be economized, too. Not so, however with respect to knowledge—regardless of whether one considers it a means or an end in itself. Of course, the acquisition of knowledge requires scarce means—at least one's body and time. Yet once knowledge is acquired, it is no longer scarce. It can neither be consumed, nor are the services that it can render as a means subject to depletion. Once there, it is an inexhaustible resource and incorporates an everlasting value provided that it is not simply forgotten. Yet knowledge is not a free good in the same sense that air, under normal circumstances, is a free good. Instead, it is a category of action. It is not only a mental ingredient of each and every action, quite unlike air, but more importantly, knowledge, and not air, is subject to validation...."(Economic Science and the Austrian Method, p.67-68)

This passage represents in some respects a microcosm of professor Hoppe’s larger social theory.  In it, professor Hoppe argues for a specific conception of knowledge which once established, will then become a central concept of his social theory.  This particular passage makes relatively heavy use of three important concepts: Scarcity, knowledge, and professor Hoppe’s physical concept of action—and the relationships among the various concepts as written here, provide a glimpse into professor Hoppe’s conceptual vision.

Scarcity

Professor Hoppe’s conception of scarcity, at least as it is implicitly conceived in this passage, partially conforms to a subjectivist and formal conception.  Hoppe writes: “The ends which we strive to attain through our actions, and the means which we employ in order to do so, are both scarce values.”

Here, no content is referred to.  Hoppe writes that ends and means are both scarce values.  And as no content is referred to, this would mean that if something is an end of human action, or a means, then it is a scarce value.  In other words, something is scarce by virtue of its being an end or a means of action.  ......  At any rate, professor Hoppe acknowledges the categorical-formal nature of scarcity when he writes that means and ends are scarce values, irrespective of content.

Hoppe also writes that “once knowledge is acquired, it is no longer scarce.”  And here again this shows how we conceive scarcity not as a feature of physical reality, but rather as a feature of acting man’s experience of reality.  For acting man, there is “the acquiring knowledge” or the “attempt to acquire knowledge”, and then there is when “knowledge is acquired”.  There is striving to attain, and there is attainment.  There is aiming at an end, and there is reaching an end.  So Hoppe’s written statement conforms to the fundamental categories of action; the two categories of “striving” and “attainment”. (we note that professor Hoppe’s passage also contains an explicit mention of these categories when he writes “strive to attain”.)

In writing that once knowledge is acquired, it is no longer scarce, of course professor Hoppe implies that before it was acquired it was scarce.  Our point about the concept of scarcity is that it is in the reality of action—in the reality of striving and attainment—that scarcity is revealed.  A consistent conception of scarcity from the point of view of praxeology, cannot conceive scarcity as being a feature of objective reality.

How this is meant can be shown by considering how professor Hoppe misconstrues the idea of scarcity in providing his account of air as a free good (a free good conceived as the opposite to a scarce good).  He writes: “…air, under normal circumstances, is a free good.”  And thus Hoppe conceives something along the lines that air is objectively non-scarce (free), independent of how the individual views things. But there is a problem, because professor Hoppe has to qualify his statement with “under normal circumstances”.  The theoretical danger of this undefined qualifier is that it allows anyone to define “normal circumstances” to fit their needs.

An example of this would be the claim that “under normal circumstances” groceries are “free goods”, because only for one hour each week does a person have to “pay” for groceries, whereas all other times during the week they are “free” in his refrigerator.  If we define “under normal circumstances” with respect to the time period used in paying for some good as opposed to the time period when a person does not have to pay for it, but can simply draw from a supply without payment, then we could make a case that almost all goods are free “under normal circumstances.”  Most of the week groceries are free (that is the normal circumstance).  But once a week groceries are scarce (that is the abnormal circumstance when shopping must be done).

This is obviously not the meaning professor Hoppe intends to convey. 

Another way to see the problem in an objective conception of scarcity is the following.  Let’s assume a person is convinced that air is going to become scarce, and that therefore he should stockpile supplies of it.  Perhaps the person believes that the air in his town will become contaminated, and therefore he purchases supplies of air.  That he pays for air is a simple economic exchange based on subjective valuation.  It is firmly established Austrian economic doctrine that praxeology and economics describe man as he actually is, and not as he should or would be if his valuations were other than what they are.  An objective account of this transaction would have to conceive this transaction as “abnormal” or an anomaly of some sort, since air is suppose to be free “under normal circumstances”.  There is no universally valid way to distinguish “normal” scarcity from “abnormal” scarcity, outside of the individual actor’s attempt to attain a thing.

Groceries are scarce when the individual actor acts to attain them, whether they are in the refrigerator or in a store.  And the same holds true for air.  Air is scarce any time an actor strives to attain it.  There is no universally valid conception of “normal” that could be used to conceive that striving to attain groceries is normal and striving to attain air is not normal.  Both things, air and groceries are, as Hoppe writes previously, “scarce values” when they are means or ends of action.

"It would be preposterous to assert apodictically that science will never succeed in developing a praxeological aprioristic doctrine of political organization..." (Mises, UF, p.98)

  • | Post Points: 5
Top 150 Contributor
Posts 634
Points 12,685

"I wonder how you see the "physical/imaginary" divide under this definition."

This is another topic.  We can conceive that which is "attained" in action as that which is perceptually present to the actor.  And that which is "striven for" as that which is not yet perceptually present to the actor.  Thus, what is "physical" in action, corresponds to that which is perceptually present to the actor, while what is "imaginary" (meaning: non-physical, immaterial, etc.) corresponds to that which is not yet present.  The means are perceptually present, while the end is never perceptually present, but rather perpetually sought.  In this definition and conception then, means would be "physical" and ends would be "imaginary."  But this wouldn't mean imaginary as in "an imagined image" (since that would be perceptually present), but rather, imaginary as in "non-perceptible."

We could possibly continue this on another thread.

"It would be preposterous to assert apodictically that science will never succeed in developing a praxeological aprioristic doctrine of political organization..." (Mises, UF, p.98)

  • | Post Points: 20
Not Ranked
Posts 86
Points 2,020
mgmcintyre replied on Wed, Aug 18 2010 10:27 AM

Thanks for the good reply.  Still absorbing the Hoppe stuff but had one comment about your second post.

Adam:
The means are perceptually present, while the end is never perceptually present, but rather perpetually sought.  In this definition and conception then, means would be "physical" and ends would be "imaginary."  But this wouldn't mean imaginary as in "an imagined image" (since that would be perceptually present), but rather, imaginary as in "non-perceptible."

This is fine, but I feel we still need to distinguish the "type" of end.  Once the end arrives, it can still be either material or not.

"I sought and then found food." -vs- "I sought and then found a good story on which to base my screenplay."

This seems important to the IP issue.  Maybe I am combining a property-rights issue with a scarcity issue, but they seem intrinsically linked in the current debate.

Correct me if I'm wrong, but didn't Rothbard say something along these lines in support of IP?

  • | Post Points: 20
Top 150 Contributor
Posts 634
Points 12,685

Replied in a new thread:

http://mises.org/Community/forums/t/19092.aspx

"It would be preposterous to assert apodictically that science will never succeed in developing a praxeological aprioristic doctrine of political organization..." (Mises, UF, p.98)

  • | Post Points: 5
Not Ranked
Posts 8
Points 175
gokuju replied on Wed, Nov 23 2011 10:43 AM

In response to:

 

How does the presence or absence of a good's consumed physical space affect its scarcity? Non-scarce goods tend to consume no space but scarce good tend to. I can think of very few exceptions here - fire consumes space but is non-scarce but ideas, images, text, techniques, etc. consume no space - unless I'm forgetting something obvious.

Fire itself does not exist. Fire is a dynamic (in this case, chemical) process. Fire invokes a movie of other objects. It's like wind. Wind doesn't exist, only air does (i.e. oxygen molecules). Wind is a process (motion of air, or whatever). It's tricky, I know. Another example is 'waves'. Wave is really a verb (to wave) or perhaps an adjective (wave-like [motion]) — but it's been reified into a noun-object (for various nefarious reasons, perhaps!). But some THING (object) — e.g. water — does the 'waving' (concept). There's no wave without the water. 

Also, ideas, text, images; these do not exist either (if we're talking about on-screen objects?). They are 2d surfaces and rely on an optical illusion (atoms; vibrating on screen / inside our eyes). What exists are the LCD screen's atoms (3d objects), the LCD itself (3d object), the PC, etc. But the 2d objects on screen are just that: 2d. It's a surface only, it has no physical dimensionality (depth, presence). 

So it continues to be the case, IMO, that ONLY physical objects can be scarce and/or thus subject to property 'claims'. Not sure if that helps at all? 

EDIT: ah sorry, this was necro-thread again (I'm a Mises n00b!) :-(

  • | Post Points: 35
Top 150 Contributor
Male
Posts 630
Points 9,425

What about sand or water as a non-scarce goods that consume space? They do not fit the definition of a non-scarce good as defined by Rothbard and others but they are the closest physical good that is practically non-scarce that I can think of. When people pay for water and sand they are usually paying for the convenience of its delivery and quality of the product. But In some regions quality sand and water are definitely scarce goods.

  • | Post Points: 20
Top 50 Contributor
Male
Posts 2,551
Points 46,635
AJ replied on Thu, Nov 24 2011 5:42 AM

I side with Adam Knott on the definition of scarcity, as being only meaningful from a specific actor's point of view. Just as an Austrian would only speak of "intrinsic value" if they were speaking loosely, there is likewise no possibility of objective or intrinsic scarcity in Austrian methodology. I also agree with gokuju that fire and ideas are not subject to being scarce since they are not objects (they are not the type of thing someone can possess and exert control over lest that fire or idea go somewhere else and *leave the actor behind* - no, whether or not he fire or idea "escapes" has no effect on whether the actor still "has enough" fire or ideas). For such things as fire and ideas, we had better use a different word than "scarce," because scarcity already contains the extra baggage of so-called rivalrousness. We wouldn't need such an unwieldy term (rivalrousness) if we just defined "scarce" clearly and kept straight what is a physical object and what is not.

  • | Post Points: 20
Top 75 Contributor
Posts 1,389
Points 21,840
Moderator

value" if they were speaking loosely, there is likewise no possibility of objective or intrinsic scarcity in Austrian methodology. I also agree with gokuju that fire and ideas are not subject to being scarce since they are not objects

In so much as people are willing to pay for an idea (whatever an idea may be) it must be an object.  If people pay my body to "form ideas", do a certain action, or whatever it icould be seen as an object as the actor is the good.  You would pay me "for ideas", as you would pay me "to dance" - the fact that you pay me "for ideas" signals that my "idea actions" are valuable - as my "dancing actions" are valuable.   I could see  an "idea"  as nothing more than a specific action of a person defined by what ever the contract and general expectations are.  The person would be the scarce material object we would talk about than.

How that sorts itself out is beyond me, it's more of a custom/fashion thing.

"As in a kaleidoscope, the constellation of forces operating in the system as a whole is ever changing." - Ludwig Lachmann

"When A Man Dies A World Goes Out of Existence"  - GLS Shackle

  • | Post Points: 5
Top 50 Contributor
Male
Posts 2,551
Points 46,635
AJ replied on Thu, Nov 24 2011 8:13 AM

In modern physics they incoherently speak of waves with no object doing the waving; IP proponents incoherently speak of theft with nothing missing from the victim "stolen" from. Both are misguided phrasings and constitute large steps away from clear communication. This is not a criticism of IP per se, but a note that the whole language of IP is a faulty attempt to ape the terminology of real property. Giving privileges to whoever came up with an idea first is just a custom, whether it be beneficial or detrimental. But it's merely confusing to call ideas "property" and speak about them with property-related terms.

  • | Post Points: 5
Page 1 of 1 (36 items) | RSS