In the natural world, there exists something called the “carrying capacity”. Carrying capacity of a biological species in an environment is the maximum population size of the species that the environment can sustain indefinitely, given the food, habitat, water, and other necessities available in the environment. Anybody who has ever farmed or ranched understands this concept because we know about how finite resources limit the number of acres we can plant or the heads of cattle we can graze on a given plot of land.

Carrying capacity can be augmented with artificial modifications of nature – irrigation, fertilizer, insecticides and herbicides in the case of plants and hay, commercial feed and water wells for livestock – but even then, there are limits.

Those processes merely push the resource decline curve to the right, temporarily expanding the capacity. Once these augmentations are ended (because they are too costly or damaging) , the carrying capacity snaps back like a rubber band – and if one continues to load the land with the same amount of plants or livestock, the carrying capacity is sharply reduced over the pre-augmentation levels, and sometimes the land is damaged to the point lifetimes are required for it to return to its natural state.

I think it was economist Milton Friedman who proposed the either/or conundrum of immigration and the welfare state. Uncle Miltie noted that you can have either open immigration or a welfare state, you cannot have both. The same holds for so-called universal health care, you can either have world class health care or you can have universal health care, you cannot have both. Each system has a carrying capacity that can be augmented for a period of time, but neither is sustainable. Eventually the augmentations become too costly or damaging to sustain.

Carrying capacity implies a real issue, a natural law called “scarcity” – and natural laws are like gravity – it doesn’t matter if you agree with them or even understand them, they still apply equally to everyone. The most absolute and fundamental issue that faces all of mankind is scarcity.

Noted economist Walter E. Williams states:

“How does one know whether things are scarce? That’s easy. When human wants exceed the means to satisfy those wants, we say that there’s scarcity. The bounds to human wants do not frequently reveal themselves; however, the means to satisfy those wants are indeed limited. Thus, scarcity creates conflict issues — namely, what things will be produced, how will they be produced, when will they be produced and who will get them? Analyzing those issues represents the heart of microeconomics.”

Scarcity of resources sets up the either/or question and raises another of the most important free market concepts – choice – and the minute choice enter the picture, so does politics.

There is a degree discipline called “Political Science”. This is a lie. Politics is not a science, it is an art. It is the art of convincing people there is no scarcity, that choice is unnecessary because a certain politician or political party has a plan that will result in everybody living at the expense of everyone else (Bastiat’s definition of government), that you truly can have everything you desire at no cost to you.

But that is another lie.

Nothing changes the fact that it only takes 2 acres to graze a cow in Mississippi and I must have 25 acres for that same cow in Utah.

There is no such thing as a free lunch and any politician who tells you there is, is a liar. They might as well claim gravity doesn’t exist.

3 thoughts on “Scarcity

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