Artificial scarcity/rival

From Issuepedia

About

Artificial scarcity of rival resources refers to the apparent fact that the world economy has sufficient capacity to produce enough for all basic human requirements, yet many people do not get enough to meet those requirements -- in other words, the existence of scarcity even though available technology and production capacity exists to create an abundance.

Causes

In addition to the general causes of artificial scarcity, with rival goods producers can also increase profit by attempting to create artificial needs -- the basis of consumerism. This often creates the appearance of shortages when those (unreal) needs cannot be met, and diverts production capacity away from genuine needs -- two more forms of artificial scarcity resulting from capitalism.[1]

Mechanisms

In a market economic system, an abundance is not produced because excess product is considered an inefficient use of resources; those resources could be used elsewhere to produce something in greater demand to fulfill more wants. A paradox is reached with artificially scarce products: an abundance is possible, yet without creating scarcity via legal or coercive means, there is minimal profitability for the creator (or the distributor) of the product. If scarcity is allowed to reach zero, the economic model is irrelevant. If natural scarcity no longer exists, scarcity has to be created to ensure a price system of supply and demand.[2]

References