Scarcity is an important aspect of our lives as it affects us everyday, although many people may overlook it when they generally enjoy high standards of living. But scarcity makes itself obvious to high-income people at times, as it will in September, for example, when people will line up for hours to get their hands on the iPhone 6. Ludwig von Mises explained the situation well in Human Action:
The available supply of every commodity is limited. If it were not scarce with regard to the demand of the public, the thing in question would not be considered an economic good, and no price would be paid for it.
Indeed, scarcity is a reason most people work since their financial resources are limited and finite and work provides them the income necessary to accumulate resources to exchange for the goods and services of another. Consumers demand scarce goods (housing, clothes, a night out, travel, school supplies) and people have to economize their decisions based on scarcity.
In the case of water scarcity, however, we find that the challenge of scarcity is met in some very peculiar ways.
For examples, we can look to the Indian River Lagoon, Lake Okeechobee, and the Everglades where water is plentiful, but clean water is scarce. Moreover, we might look to the western United States where an arid climate makes all types of water scarce.
This post was published at Ludwig von Mises Institute on Thursday, September 04, 2014.
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