Scarcity and Infinite Wants: The Founding Myths of Economics

If you open any textbook on economics you will find the definition at the beginning as to what economics is will include the concept of ‘scarcity’. On the one side, it is taught, there are scarce resources and, on the other side, unlimited wants, and that economics is the study of the choices people make (as individuals and societies) to deal with this.

However, the concept of ‘scarcity’ used in these definitions is an abnormal and circular one and human wants are not unlimited. The relationship between scarce resources and unlimited wants is not what economics actually studies. The definition above is an ideological construct to justify one particular way of organising the production and distribution of goods and services – the capitalist system of production for profit, involving markets, money, prices, profits, wages, interest, banks, etc. That’s what economics really studies.

What is scarcity?