Comments on Bad Economics

Why is an abundance of images the goal? People go to the movies for many things, to appreciate art, escapism, to learn, etc. To me, watching several movies at one time, lessens the value of the movie because the constant distraction does not allow you to enter into another world completely. I read books and watch movies in a large part because I enjoy being transported into a completely different place and time. Obviously, Cowen is a loon, but to watch 4 Hollywood movies at the same time is to deny yourself any chance of escapism.

I love excess. Bataille et all may of been on to something decades ago. But fuel/clean water are not exactly in abundence and they will continue to dwindel as the decades progress.

Brilliant! All we have to do is stop manufacturing the inability to capture solar power for energy, and everything will be groovy!

Why didn't I think of that before? I mean, never mind the difficulties of engineering large-scale solar energy production. We just have to stop manufacturing the scarcity!

GENIUS!

Does this include the director's Remake of Blade Runner they just announced, Charles?

Wow. If you are going to attack one of the bases of economics, it makes much more sense to attack rationality than scarcity. Tyler Cowen has his faults, but relying on scarcity as a basis for economics isn't one of them.

Until we can harness the sun's energy in an efficient manner and invent technology that can directly turn that energy into food, water, and raw materials, then scarcity won't be a real problem. Unfortunately, at this current point in time, when we're constrained to growing food in the earth, and sharing small supplies of fresh water and raw materials, we only have enough resources to provide a Western middle class existence to 2 billion people. What's the global population again?

Prof. Cowen is an economist for sure, but he is aware of the lenses he uses and open to others. If you didn't think of him as an enemy, I bet you'd like talking with him. He is very interested in strong views and thoughtful critiques.

There is an abundance of energy in the world. The sun gives it to us daily for free.

Yes, but there isn't an abundance of solar panels.

And I'm pretty sure the starving people of the world don't give a fuck that there's plenty of food somewhere else. Scarcity involves wants as well as needs. The U.S. dominates proportionally more resources than other countries not because our needs are greater, but because our wants are. And the power to secure resources for our wants and needs is scarce, too.

While the example of solar power might not be the best to illustrate Charles' takedown of the scarcity concept, his concluding sentence is great, pointing to a perhaps clearer proof of his thesis. Africa is rich in nearly every natural resource, but poor because its resources have been historically controlled by colonizing powers (and today, by multi-nationals or corrupt regimes). See for example the concept of the "resource curse," which I think is related:
http://en.wikipedia.org/wiki/Resource_curse

Saying Africa is poor because of colonization is pure sophistry. No doubt that European colonizers were brutal thugs who bespoiled the African people and landscape, but to understand why Africa is poor is to understand that poverty is the natural state of man. If man does nothing he remains poor, wealth is only created by DOING something productive. There are more than enough counter-examples of countries that have also been colonized, or that have no resources to speak of, but which have developed quite well.

"If scarcity was an authentic problem (rather than a fabricated one) then Africa would not be poor."

Fine, we'll grant you this, so long as you can explain why standards of living around the globe remained essentially unchanged for millenia until the Industrial Revolution. Average life expectancy around 1800 was near 30 years old, and average income was in the $1000 range - orders of magnitude below where most of the world has come today.

Was scarcity somehow real back then? And out of thin air resources started to appear in 1760?

This is just embarrassing. Whether or not colonialism is to blame for Africa's problems has nothing to do with the validity of the concept of "scarcity" in the economic sense, which exists even under conditions of extreme abundance so long as resources are not infinite. It's generally a good idea to pick "enemies" in fields of which one is not completely ignorant.

The author of this obviously does not understand what economists mean when they use the word "scarcity" as a term of art. I would explain, but alas my time is "scarce"-- I have better things to do than explain a self-evident concept that is taught in economics 101.

Africa is not poor; Africa is a continent abundantly endowed with vast stores of minerals. Because it is a landmass, it cannot be rich or poor. African leaders are not poor. They have dedicated years to using the instruments of state to extract Africa's mineral wealth and use it to build themselves large Swiss bank accounts and fabulous palaces. African politics revolve around efforts to control the state in order to control this resource wealth (that is the resource curse). The reason why politics functions in this way in so many African countries is because the minerals therein are scarce and therefore valuable.

The vast majority of the people who populate sub-Saharan Africa are very poor. This is directly related to the horrible governments they have suffered with for the last 40 years.

The first law of economics is scarcity: there is never enough of anything to satisfy everyone who demands it.

The first law of goofy progressive blogging is to ignore the first law of economics.

Charles,

I am still waiting on you to personally harness the power of the sun into energy, and solve the worlds problems. You've got the time, don't you?

"However, scarcity is rarely real but manufactured...If scarcity was an authentic problem (rather than a fabricated one) then Africa would not be poor."

With all due respect, you lie!

This is the most ignorant thing I've read all week.

The vast majority of the people who populate sub-Saharan Africa are very poor. This is directly related to the horrible governments they have suffered with for the last 40 years.

You left out a zero. It's been about 400 years that most sub-saharan Africans have been subject to horrible kleptocratic governments. The only thing much different about the last 40 is that the thugs are native.

You've gotta love the irony; there's a definite scarcity of intelligence and knowledge in this guy's head.

ummm 400 years? Africa wasn't colonized in earnest till the 1800's.

When Economists talk about scarcity, they simply mean that people can’t have everything they want and that therefore, they must make choices. Put another way, resources are limited but desires are potentially unlimited.

One example of a scarce resource is time, for all of us have a limited time here on earth. While we may want to live forever (unlimited desire), the fact is that we cannot (limited resource).

Another example of scarcity is the fact that people can only physically be in one place at one time. I physically can’t be in London and Kumasi and Seattle at the exact same time. Rather, I must choose one.

Certainly, abundance is important in that it entails more choice. If there were only one good movie in existence, then it probably wouldn’t be too hard to make time to see it. But in fact, there are probably thousands of good movies, not to mention there are many fun things to do besides watching movies. If one could live forever and one could be and do everything at once, then choice would be unnecessary. But of course, due to scarcity, we must make choices about how we spend out limited time, our limited money, our limited attention, etc. I must decide how many and which movies I will watch, and when I want to do so. Every time I watch a movie, I forgo something else that I could have done instead.

Perhaps you can identify with the phrase: So many movies, so little time. Notice the phrase wouldn’t make much sense if it were So few movies, so little time or So many movies, so much time. This is because abundance and scarcity both play a role in the meaning of this phrase. There are abundant movies one might like to watch, but one only has a limited amount of time that may be spent watching movies.

When Economists talk about scarcity, they simply mean that people can’t have everything they want and that therefore, they must make choices. Put another way, resources are limited but desires are potentially unlimited.

One example of a scarce resource is time, for all of us have a limited time here on earth. While we may want to live forever (unlimited desire), the fact is that we cannot (limited resource).

Another example of scarcity is the fact that people can only physically be in one place at one time. I physically can’t be in London and Kumasi and Seattle at the exact same time. Rather, I must choose one.

Certainly, abundance is important in that it entails more choice. If there were only one good movie in existence, then it probably wouldn’t be too hard to make time to see it. But in fact, there are probably thousands of good movies, not to mention there are many fun things to do besides watching movies. If one could live forever and one could be and do everything at once, then choice would be unnecessary. But of course, due to scarcity, we must make choices about how we spend out limited time, our limited money, our limited attention, etc. I must decide how many and which movies I will watch, and when I want to do so. Every time I watch a movie, I forgo something else that I could have done instead.

Perhaps you can identify with the phrase: So many movies, so little time. Notice the phrase wouldn’t make much sense if it were So few movies, so little time or So many movies, so much time. This is because abundance and scarcity both play a role in the meaning of this phrase. There are abundant movies one might like to watch, but one only has a limited amount of time that may be spent watching movies.

Scarcity is the REASON Africa is poor. There is not enough clean water or food in Africa for all the Africans. There are not enough medical supplies. There are not enough good and honest leaders to prevent conflict and allocate the resources there are efficiently. There are not enough educational facilities to teach the people how to run businesses, and practice trades.

Yes, they have an abundance of certain natural resources, but the critical PROBLEM that faces Africa is not an abundance of natural resources, it is the SCARCITY of the aforementioned things (among others). Thus, just as Cowen said, "The critical economic problem is SCARCITY."

People seem to use colonization to explain too much. How different are Liberia and Ethiopia from neighboring countries? Thailand from the rest of southeast asia? The more sensible explanation is that Africa has always been poor and that simply hasn't changed, though medicines and foods permitting larger populations have arrived, as well as guns and various ideologies that lower populations in an especially unpleasant manner.

What absolute drivel. There's no such thing as scarcity? Honestly, you should try and refrain from taking on serious scholars like Cowen with such ignorant platitudes.

Sir Charles Hudede apparently believes that "scarcity" means the same thing as "shortage" in the vernacular of economics. Students of economics are disabused of this confusion in their very first course in the subject. Sir Charles could easily disabuse himself of this error by reading the first several chapters of any introductory textbook to the subject of economics. I hope he will do so.