Scarcity not a necessity

When faced with problems people seek solutions – not least to those problems generated by the market allocation of the things we need to live.

Current economic theory assumes resource scarcity, and there is a general consensus that scarce resources are best allocated by means of the market. However, a new doctoral thesis from the University of Gothenburg, Sweden, suggests that there may be alternative solutions to the allocation problem and that resource scarcity is not a necessity:

“The market as an allocation mechanism has not been able to distribute food to everyone – every sixth person in the world does not have access to enough food,” says Adel Daoud, author of the thesis.

Capitalist economists argue that scarcity is best dealt with through the mechanisms of a market – the highest bidders gain access to the world’s scarce resources. One consequence of market allocation is that although there is enough food in the world people are still go hungry.

“The market as an allocation mechanism has not been able to distribute food to everyone – every sixth person in the world does not have access to enough food,” says Adel Daoud, author of the thesis.

He asks – do we need the market?

“Maybe we do, given the present economic system [our emphasis], but we should at the same time ask ourselves whether any alternative allocation models could help us manage the world's resources better, not least considering the climate threat. A so-called economic democracy could be one such solution. In an economic democracy, citizens get to have a say about what and how much of various products and services should be produced.”

If by “economic democracy” he means common ownership, democratic control and production directly for use, then we can only heartily agree — it’s what we urge our fellow workers, including Adel Daoud, to establish.

GT