Freedom and the View of Wealth Scarcity

The Questions and Introduction

If freedom is the most efficient system for material distribution why is it not used?  If freedom creates the most wealth for the most people, why do human societies not innately choose it?  If freedom creates an environment that fosters human physical, mental and spiritual growth, why do so many abhor it?

These are difficult to answer questions; questions that have a variety of answers.  In the start of a new series, I will attempt to address some of these questions from a few personal viewpoints.  For now, I would like to introduce this issue from an economic side where people understandably misunderstand the difference between Wealth, Matter and Scarcity.

Supply & Demand

The material resources of planet Earth are nearly static – the Earth doesn’t really produce additional mineral resources.  There is only so much oil, copper, gold, zinc, & coal available on the planet; only so much physical matter.  Sure, man continues to discover new deposits or old deposits become profitable to mine at higher prices; man’s supply and demand change, but the planetary resources stay roughly the same.  Their may occasionally occur small changes due to  meteorites adding material to the planet, space exploration removing it, but these are all infinitesimal when compared to the overall material scheme of the Earth.

Resource conversion also takes place as Oil becomes Gasoline which becomes exhaust.  Coal is burned, Wood is grown, used and burned.  Resources are in continual motion, some are renewed quickly (like wood) other’s not so quickly (oil & coal).  The overall available planetary matter remains the same, even if the composition of that matter changes. Because our available resources are limited, scarcity of materials exist.  Scarcity than induces demand.  Unscarce things –  clean air in the countryside for example – are not in demand because it is freely available.  Everyone needs it, but there is rarely economic demand for it.  Scarcity doesn’t imply that the supply of something is infinite, just that it far exceeds the demand.  To continue using air as an example, the air supply of the Earth is not infinite; if the Earth has a limited atmospheric volume than there is certainly a limited volume of air available.  This air, is constantly being renewed via plant life – renewed implying ‘being made use-able for animals and humans”.  The renewal process keeps the supply of air so high that demand for air never reaches the supply levels – except for in the occasional extra-ordinary circumstance.  In economic terms then, scarcity occurs when the demand for something can reach the available supply.

Wealth Scarcity?

Scarcity & the Zero Sum Game

What does scarcity and the lack of historical freedom have to do with each other?  The case made in this post is that one of the reasons anarchistic societies aren’t common throughout history is man’s wrongful interpretation of economic scarcity.  In a world of fixed matter, it is an easy assumption to assume fixed wealth.  If all the matter in the world doesn’t change – if new material doesn’t seem to appear from nowhere – then isn’t the potential wealth to be created from that fixed?  If it is a fixed amount, then wealth is a Zero-Sum Game.

A zero-sum game is “a mathematical representation of a situation in which a participant’s gain (or loss) of utility is exactly balanced by the losses (or gains) of the utility of the other participant(s).”

If wealth then is fixed, then “Bob” can only increase in wealth by decreasing the wealth available to “Adam”.  What kind of worldview, or mindset, does such a view of wealth create?  I see three types:

>> Aggressive Wealth Accumulation: Try to grab as much wealth as possible.
>> Passive Wealth Accumulation: Not too rich, not too poor; just accumulate an average, or “fair”, amount of wealth
>> Pacifist Wealth Accumulation: Refusal, or near refusal, to accumulate wealth if it hurts others.

The average person will be in the “Passive” stage by logical necessity, with the occasional outlier individuals accumulating massive wealth or deciding to abandon all wealth and living as a hermit.

But is wealth fixed?  Is the above a correct interpretation of Scarcity?  Without going into numbers and charts, a simple historical glance should suffice to inform us that wealth isn’t fixed, but is instead almost constantly increasing.  The poor of today live better than kings of old.  Food, refrigeration, media consumption, entertainment and a myriad of other technological advances available to the poor that improve their lives.  If the average poor person of today is better off then the average wealthier person of yonder; then wealth isn’t fixed.  Despite the fixed amount of matter of Earth, wealth is constantly being made, destroyed, and remade more efficiently.  The same matter gets distributed, but as population, specialization and technology increases the matter is organized more efficiently to handle the needs of humans better – and thus wealth per person and per fixed matter increases.

Conclusion

So what is the harm of viewing wealth wrongfully?  What is the harm of viewing wealth as a zero-sum game?  What is the harm for the average person to view his wealth as a “fair amount” and anything above or below as “unfair”?  To ask, is to nearly answer.  In Jewish history, there is a story in 1st Samuel, Chapter 8 where the Hebrews wanted to go from a non-state, anarchistic society to a monarchical society.  The only reasons given for doing so are:

They said to him, “You are old, and your sons do not follow your ways; now appoint a king to lead us, such as all the other nations have.”  … But the people refused to listen to Samuel. “No!” they said. “We want a king over us. 20 Then we will be like all the other nations, with a king to lead us and to go out before us and fight our battles.”

“[W]ith a King to … fight our battles.”  If the average person views wealth as a Zero Sum game, then the non-average wealth is an unfair amount of wealth.  What then is the best way to make wealth “fair”?  An average person can either act alone, either stealing from the rich to give to the poor (Robin Hood) or act as part of a group to forcibly take from the rich to give to the poor (mob rule).  Neither of these options are going to be too palatable to the average person as acting alone is risky and anyone able to pull off such a feat could probably get rich from his own entrepreneurial activities.  Acting as a group and mobbing the rich is morally dubious and historically this seems to only happen in times of crisis when morals get thrown out the window.  So what’s the average person to do if he wants to make wealth fair so the rich aren’t taking from the poor (in a zero-sum game sense)?  Why, elect a king over everyone.  He can make things fair, without abasing the morality of individuals.  He can fight our battles and do what we feel is necessary even though it is morally abhorrent.

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