The first thing that Economics students learn is that scarcity results from unlimited human wants. Resources, on the other hand, are limited.
On the first day of the Economics lesson, the statement passed muster without eliciting any voices of dissent. But if we step back and question – is it really true?
Are resources truly scarce? Or just inefficiently allocated? How do we explain the wasted food in the developed world where McDonald’s customers can throw any their “Happy Meals” after getting the Hello Kitty toys, while there is hunger and starvation in other parts of the world?
There are 2 main arguments that run counter to the axiom of “human wants are unlimited”.
(a) Need all human wants be materialised in order to increase our welfare?
(b) Is “unlimited human wants” natural and universal?
It is one thing to want. It is another to need all our wants to be materialised all the time.
We live in a society inundated with messages exhorting us to consume more and more. We are bombarded with anywhere from 150-5000 advertisements a day. Have you ever walked round shopping districts and came across something that caught your fancy? It was not even something that you wanted, before the sight of that item entered your consciousness. Are humans really greedy and have unlimited wants, or are these wants created? If so, in whose interests is it to create wants? Are we taught to want more and more and accumulate? Do we really know what we want more of? Or do we let advertising and peer pressure decide what we want more of?
Much of the study of Economics concerns production and consumption. If the eventual aim of society is to increase welfare, is consumption and production the only path that leads towards that end? Is it any surprise that the citizens of some of the richest nations on earth are not necessarily the happiest? What about other non-monetary “transactions”, such as interactions with friends, relatives, or neighbours in social settings where you play, converse with one another?
Many things we regards as “truths” are in effect, more contextual in nature. Is “unlimited human wants” a concept that is true across time and space?
To achieve the objective of having more in order to finance our consumption in the future, the conventional wisdom is that one accumulates wealth. The native Indians and the Puritan settlers never understood such a concept. In their culture ‘the most valuable’ is saved to give away rather than ’storing or hoarding things’ as we do now.
In Thorstein Veblen’s Theory of the Leisure Class (1899), Veblen postulates that economic and social structures determine consumption behaviour, and that consumption is not simply a matter of individual choice, but is the outcome of a large set of social forces that make us what we are. Sometimes, consumption itself is not important in and of themselves, but because they carry with them some social significance, determined by who we are and how we live in relation to others. For example, buying a wallet that has the designer logo stamped all over it, it is not the good that we desire for itself, but the admiration that we are buying. Another example is that of the diamond industry which has managed to crystallize the link between a rock and undying love. If admiration and love within a social setting is what is desired, are there other ways to achieve the same ends?
Is to keep wanting more and more a natural and intrinsic human instinct? As much as humans can be “taught” to keep wanting more, a nature organisation here in Singapore called Ground Up Initiative believes that humans can “unlearn” to want more, and instead, be more content with less. The organisation believes in connecting people through working on the soil will enable people to move away from waste and materialistic consumption and regenerate the human spirit. Can regenerating the human spirit lead to better welfare? But is that counted in the Gross Domestic Product of a country?
What if we realise that in our objective to lead better lives, we have been climbing up the ladder....but propped up against the wrong wall?
While the basic premise of Economics is that of limited resources and unlimited human wants, one wonders whether these concepts might one day lost their ring of authenticity as social structures evolve.
Already, the field of Economics is moving in an exciting direction, with many Economists questioning or tweaking the fundamentals, such as Behavioural Economics (whether man is truly rational) or Altruistic Economics (as opposed to self-interest). Stay tuned.
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