Is Economics Irrelevant in the Absence of Scarcity?

Readers Question Is the study of economics irrelevant in the absence of the concept of scarcity?

It would make a good interview question.

The difficult thing is trying to imagine what a society would be like if it had no scarcity.

One thinks of the imaginary desert island, with abundant resources and a lone Robinson Crusoe living a life of luxury. In this case, it is hard to see the relevance of studying economics.

In theory, if there was no scarcity the price of everything would be free, so there would be no necessity for supply and demand. There would be no need for government intervention to redistribute scarce resources.

One could think of macroeconomic problems like economic growth and unemployment. But, if there is no scarcity, then a fall in economic growth would be meaningless.

Nevertheless, you could say it is impossible to eliminate scarcity because Robinson Crusoe would face a scarcity of time. In other words, he would be facing opportunity costs between picking pineapples and swimming in the sea.

One of the first things you learn in economics is that the fundamental problem of economics is the issue of scarcity – and deciding how to produce, what to produce and for whom?

ppf-curve-health-military A production possibility frontier – shows that there is a trade-off between different goods because of a scarcity of resources.

But, maybe economics still would matter.

Welfare economics would be considered whether abundant resources could be misused – perhaps people would become bored enjoying too much leisure. Perhaps the way forward would be to create scarcity so that people could enjoy working hard and striving to improve their life.


4 thoughts on “Is Economics Irrelevant in the Absence of Scarcity?”

  1. a very good oinion because time itself is also a factor of production and it a limited resource.So, if time is limited , then all other factors no matter how aboundant they are in supply , will be limited in use

  2. Time is not a factor though because it is not scarce in this scenario, in this scenario you have infinite time and infinite choices that can be made. Wherever you encounter scarcity it is made abundant and no longer scarce. So then the real question is what would someone with influence in a society operating in scarcity have to lose from the irradication of scarcity? Control, power, anything that operates best in scarcity. Although these things would be meaningless in Utopia they are fearful of losing these things and so it would be in their best interest to maintain scarcity. Anyone who looks can see that scarcity as it is is greatly overexadurated and can be completely whiped out. Food, water, recources, energy, time. What 6 billion people knew but didn’t act on will kill them.

  3. it is totally irrelevant because economics is the study of how a society manages its scarce resources & it also studies the various economic activities and how to solve the vairous economic problemes which wouldn’t exist is scarcity were to be absent.

  4. First of all, we all need to picture what a society without scarcity would look like, and one thing we all know for sure is that goods/ services will definitely not fall from the sky to our doorstep in times of need. In view of this, then we are right if we say that the study of economics goes beyond scarcity, because even without scarcity, production and other related activities will still take place. There will be those who will have the desire to be greater than others in the socio-economic view, and what better way to do that than with the knowledge of economics.
    Remember, economic reasoning doesn’t come into play just as a result of scarcity alone, but also due to rationality.

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