y: Miguel Alejandro Hayes
For neoclassical economics, scarcity is the scarcity of resources. It is a relationship between needs, whether consumer or productive, and the availability of objects and resources to satisfy those needs.
This conception of scarcity responds to the very origins of classical economics and to its problems, such as the origin of the market. From an explanatory point of view, it is useful in a certain context, at least for economics.
It is a limited conception insofar as the only thing that can be understood as scarce in the economy does not have to be resources, nor does it become necessary to talk about the scarcity of resources (in a conventional sense of the word) every time the term is mentioned.
In fact, a very common interpretation is that scarcity is a scarcity of raw materials and production materials. This refers rather to the exhaustibility of resources over time, largely more than in the present or short term, or even the medium term. This is demonstrated by the fact that the sectoral oversupply typical of the modern world can only be achieved by expending large amounts of resources. That said, in the short term, this way of understanding scarcity is, at best, ineffective. Its usefulness is perhaps limited to a worldview about production, or to considering its fate in the very long term. It may be a shortage of production factors, of the community, or of the future.
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On the other hand, if we were talking about production, about the scarcity of the product of labor, in reality, as just mentioned, the distinctive feature of modern economies is precisely the opposite: an excess of production. Therefore, the use of scarcity as a supposition becomes tricky when talking about productive scarcity. For this variant of scarcity (regarding what is produced), in any case, it is a scarcity associated with the social distribution of wealth (social), mediated by property relations resulting from social conditions, taking as a reference an optimal distribution in a given function. Generally speaking, the least favored groups, as economic subjects, experience scarcity, whether due to ideological, political, cultural, etc. horizons and aspirations.
However, when it comes to production, the term scarcity does acquire meaning when it refers to production that doesn’t meet demand, either by choice or due to a lack of supply. In other words, this is a variant of the term scarcity with an ethical connotation, where scarcity is considered a reference reduction in the production levels necessary to satisfy the needs of a given number of people. Here, we would be talking about scarcity as a production phenomenon, which takes optimal production in a given function as a reference. Seen from the perspective of demand, there is a shortage (there is nothing to buy).
A shortage can also be defined if certain market movements occur. Thus, a shortage in the supply of a good can be considered when, once there is an equilibrium point, it is reduced by some action, whether an external shock or a decision by producers. In such a case, a shortage exists relative to the initial market point. The demand side can now buy less, meaning there is a certain shortage of the good.
Given this, we see some evidence of how, within economics, the term scarcity needs to be used more flexibly, as may be required by some of the phenomena to be explained. As shown, it can be used in various contexts and, within these contexts, can take on a theoretical meaning, whether explanatory, descriptive, or predictive.
What is clear is that, when we talk about scarcity, we are referring to a lack of supply, understood not as the action of a seller (natural resources may simply be discovered and seized), but as availability. That is, as the reduction (real or referential) of something needed in demand, taking a point as a reference point.