Is scarcity a "hard fact"?
I approached the bakery counter slowly, formulating the words of my request in my mind:
“Un barra de pan, por favor?” I said. A loaf of bread, please?
The baker behind the counter at the Mercado do Progreso in Vigo, Spain nodded.
She reached behind her, almost without looking, selecting a baguette with one hand and a slim bread sleeve with the other, bringing them together in front of her, seemingly without effort, to slip the loaf into the sleeve and extend the covered loaf over the counter into my hands.
“Un euro con veinte,” she said. One euro and twenty cents.
For a moment, I questioned my comprehension. Was it possible that a loaf of bread could cost so little? A previously frozen loaf of mediocre French bread in America would cost close to five times that much. I carefully handed the two coins over the counter and watched as she slid them, smiling, into the register.
“Gracias. Buen día!” she said, our business complete.
I spent the next five days walking through northern Spain with my family, marveling at the differences in the cost of living between there and home. A half a melon — $1. A glass of wine or beer at the local bar — $3.
In nearly every town along the Camino de Santiago, we walked by a bakery offering fresh bread, the land between towns blanketed with vineyards flush with grapes. It was no wonder that bread and wine were so plentiful. The local economy had clearly organized itself to ensure that supply would always meet demand at an affordable price point.
Is scarcity a fact?
A few weeks before, I wrote a post about the trouble with capitalism, questioning whether capitalism serves human needs as an economic framework. The post prompted one of my most engaged readers to raise an objection to my analysis.
“Scarcity is a hard fact,” he said, advocating for capitalism as an effective market-based strategy by which to address scarcity’s resulting challenges.
I generally understand a "hard fact" to indicate a basic and unavoidable truth, a unquestionable dimension of reality—in this case an inevitable experience for a portion of humans living on Earth at any one time. And "scarcity," in economic terms, is what happens when demand for resources exceeds supply, either because of limits in the availability of natural or manufactured resources or because of industrial influences on prices or rations.
Is scarcity really an inevitable truth? Does the functioning of human society really depend on some of its members not having enough?
By my estimation, only three things on Earth might earnestly be described as scarce: the surface area of the planet, fresh water, and human longevity. The first two have been meaningfully addressed by innovations in vertical construction and water purification, and remediation of the last is improving all the time, thanks to great strides made in medicine and science.
Managing the limitations of Earth’s surface area and fresh water, and the time-bound nature of human existence requires strategy and trade-offs, to be sure. But scarcity in most cases is an effect of temporary resource mismanagement more than an abiding truth. Of course, humans face real and present trade-offs that inherently bound our use of time and resources. In the quest to maximize our utility, we are constantly balancing being asleep against being awake and eating cake against eating our vegetables.
The trouble with capitalism is that, with Adam Smith’s encouragement, humans have surrendered decisions about what is abundant and what is scarce to the “invisible hand” of the market, believing that whatever people are buying is what “the market” should be producing.
Incentives to gain status by amassing wealth have led to strange market outcomes, driven mostly by greed or indifference. It's easy to let culture—shaped by individual desires and corporate marketing—decide for us. However, when we do that, we give up the power to decide together what should be scarce and what should be abundant. Scarcity isn't a fixed reality. More often, it’s because the aggregate of culture-driven individual choices drive market distortions that have public consequences with hidden costs.
Addressing the scarcity effect
To appreciate the fact versus effect dimension of scarcity, consider the U.S. housing market. Recent studies indicate that some 16 million homes in America are vacant, 32% or roughly 5 million of which are vacation homes and 37% or nearly 6 million of which are vacant for undisclosed “other” reasons. Setting aside the 30% of homes that are in various states of “for sale” or “for rent,” we presently allow 10 million homes across America to stand empty while nearly 700,000 Americans are homeless. The absence of regulation and intentional collective decision-making have rendered housing “scarce,” except for those Americans who have amassed enough wealth to afford more than one home, allowing them to keep their vacation homes vacant while they live elsewhere.
What would it take to convert the 6 million homes that are vacant for “other” reasons into homes that are for rent or for sale? How might the resulting increase in housing supply affect the housing costs of the 36 million households in America that are ALICE — Asset Limited, Income Constrained, Employed, surviving just out of reach of “poverty”? Some government leaders might suggest that simply building more homes is the best way to address America’s housing shortage. But instituting more thoughtful policies and public investment to guide how existing stock is used and managed would be a more immediate and less resource-intensive way to address the need for more affordable housing. While many may experience housing as a “scarce” resource, in fact, our housing stock might be adequate if we could design and deploy a system that would reduce our national vacancy rate.
Consider the case of food and farming in America. 150 years ago, most Americans were farmers in some capacity, locally sourcing most of the food they ate, either from their own farms and gardens or from their neighbors. Over the last 75 to 100 years, management experts have successfully stewarded America away from smallholder farms towards agribusiness, recommending that economies of scale can yield more affordable food. By decentralizing food production away from communities where it’s consumed, and incentivizing international food trade, we’ve successfully achieved a degree of “consumption smoothing,” which means you can eat a pineapple or an avocado whenever you want to, even if it doesn’t grow within 1,000 miles of where you live. Agribusiness also means that the transaction costs of food production and distribution are bundled into the food we buy and consume. As minimum wage and transportation costs rise, so too does the cost of food.
Instead of farming their backyards, as Americans had done for centuries, modern Americans now spend their excess time, energy, and money caring for their grass. The aspirations of capitalist achievement have replaced “every man a farmer” with “everyone a professional” who spends their leisure time manicuring an immaculate lawn. As a homeowner whose neighbors surely judge me for my lackadaisical lawn care, I’m frequently horrified by the expenditure of fuel and pesticide that goes into maintaining personal green spaces that deliver a negative financial return. And don’t even get me started on the over-use of leaf blowers to achieve lawn perfection all autumn long. A 2023 report from the Kleinman Center for Energy Policy at the University of Pennsylvania emphasized the horrific impact leaf blowers have on the environment:
“In 2011, engineers at the car company Edmunds estimated that driving a Ford F-150 Raptor truck from Texas to Alaska would emit the same amount of air pollution as a mere half-hour of yard work with a two-stroke, gas-powered leaf blower.”
(If we made leaf-blowers as scarce as community farms, perhaps we’d have more runway on the impending climate crisis.)
Sunshine is an extremely powerful energy source that could be more widely harnessed to grow things far more useful than grass. How we use and maintain our available green space isn’t a hard fact. It’s a downstream effect of culture and our failure to make collective decisions that most effectively support human thriving.
The trouble with collective decisions
When did we “decide” that it was a good idea to stop farming and start wasting our free time on lawn care instead? When did we “decide” it was okay for people to keep using a tool as environmentally toxic as a leaf-blower to maintain a public vanity project? Does anyone consider the abundance of lawns when they consider the scarcity of vegetables at the farmer’s market or the grocery store? Like the Spanish and their bread and wine, economic choices exist downstream of cultural choices, whether we view them as “decisions” or not.
As humans, we’ve built habits of consumption and waste that are both ecologically and economically harmful yet in spite of overwhelming evidence of the detriment of these choices, we fail to make different ones. In this way, “scarcity as fact” has become a handy stand-in for status quo bias. It’s easier to believe that our present circumstances will persist rather than appreciate and embrace that an alternative path could yield a better result for more people. When it comes to managing the truly scarce resources of our planet — planetary surface area, fresh water, and time — we’ve agreed to let “the market” do the heavy lifting, rather than choose more prudent alternatives.
We could tend vegetable gardens instead of lawns, or install solar panels on every home. We could follow Europe’s example and ban single-use plastics or plastic packaging, forcing food producers to implement changes in their supply chain. Our governments could subsidize municipal composting or decide that the 40-hour work-week is a legacy of industrial production rendered obsolete by technology. Perhaps most obviously, they could ban gas-powered leaf-blowers. All of these things are possible and would have profound effects on what is scarce and what is abundant.
What’s standing in the way?
Federal, state, and local governments have the power to re-allocate resources to support adjusted priorities and trade-offs, which could yield a different utility optimization that reduces scarcity. But our elected representatives are too busy managing the existing “business” of governance to have bandwidth to contemplate anything altogether new. As citizens, we’ve failed to demand forums where everyday people can formulate new possibilities. To relieve the ideology that “scarcity is a hard fact,” we have to appreciate the de facto choices we’re making and agree it’s time to contemplate alternatives.
Citizen Assemblies are one model of collective decision-making that has been effectively used to make difficult, deliberative, highly political choices. Most famously a 2016 Irish Citizen Assembly led to a 2018 referendum to amend the country’s constitution to legalize abortion, which passed by a nearly two-thirds margin.
If they can help the Catholics of Ireland embrace the necessity of reproductive justice, perhaps citizen assemblies could help Americans make more intentional decisions about how we manage resources and waste to shape the balance of what is abundant and what is scarce. Who gets to decide is an open question, though it’s one that’s too infrequently asked. There’s enough food on Earth for everyone to eat. The challenge is getting it on the table, without it going to waste in the process. Instead of letting “scarcity as fact” drive our economic models and political decisions, what if instead we rejected scarcity in favor of sufficiency and built systems that allowed everyone to simply have enough?