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Created: 2000-03-05
Last Modified: 2000-03-05
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Scarcity

J. Bradford DeLong
http://www.j-bradford-delong.net/
delong@econ.berkeley.edu

 


Context:

Surely we'd do well to remember the fact that introductory textbooks on Economics all begin with the discussion of Desire & Scarcity. In the world of Econ 101, it is the abstraction called Desire -- unlimited wants -- that makes us all, rich or poor, experience Scarcity.


My Comment:

Yet it does seem to be true that the line between need and useful convenience on the one hand and embarrassingly decadent luxury on the other sets in at roughly twice one's current level of consumption--no matter what one's current level of consumption is.

Or, as George Stigler put it:

"It would be easy to provide everyone with a physiologically adequate diet; for example, a [hu]man could perhaps live for a year on the following diet, at a cost of about $8 a month in 1950:

--370 pounds of wheat flour
--57 cans of evaporated milk
--111 pounds of cabbage
--25 pounds of spinach
--285 pounds of dried navy beans.

"But [hu]man insists upon luxuries such as meat, and should we somehow fully satisfy his desire (despite his penchant for shifting from sow belly to pheasant), he will no doubt insist upon shifting to another and more expensive food.

"Thus, from an Olympian peak, one may say that the economic system has as its purpose forcing people to find new scarcities. From a closer vantage point, the study of economics has as its purpose the alteration of a host of circumstances and policies that deprive large numbers of people of eminently desirable things a more efficiently organized society could afford..." (From The Theory of Price, (New York: Macmillan, 1952), pp. 2-3.)

And, indeed, when I posted the Chez Panisse dinner menu (which has changed; today it is all fish even though it is not yet Lent:

--An aperitif
--Smoked fish salad with pickled Chino Ranch greens
--Truffled scrambled eggs with Dungeness crab and garlic croutons
--Black sea bass cooked on its skin; with roasted root vegetables, fried onions, and garden lettuces
--Hazelnut, coffee, and chocolate ice cream bombe)

One of the first comments was "how about wine?"...

:-)

Brad DeLong


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Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/

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