Abundance Theory Economics

[ebacon]

Are you guys familiar with abundance theory economics and its rise in the 1960s? The old school of thought is called scarcity theory economics.

The basic difference between the two is simple as their name suggest. In a nutshell scarcity theory economics says that resources and size of the marketplace are limited. Government therefore has a role in managing the distribution of wealth.

On the other hand abundance theory economics says that with ever improving technology there is little need for government intervention. People will always come up with new stuff to keep themselves employed.

During the technological revolution of the 1960s-1990s it is easy to see how abundance theory could prevail in political thought.

What are your thoughts? Were you fan of abundance theory and have now changed your mind? Vice versa? No change?

I searched the board for occurances of the words scarcity and abundance. The results are pretty interesting.

The word scarcity has only been used a handful of times. It was used to describe a scarcity of:

*medical resources in light of Obamacare
*natural resources vs. population
*consumer goods in East Europe during the Cold War

On the other hand the word abundance is used quite often. My search returned too many hits to cover them all but here is a sampling from the first batch of results. The word was used to describe an abundance of:

*middlemen
*offshore accounts
*guns
*abundance is bad in the context of global warming
*abundance of gas stations causes higher gas prices in NYC
*abundance as a broken promise of communism

One curious result was that a writer believed there is an abundance of agreement between people of the right and left. I think there is a point there. We seem to agree that there aren't enough jobs and that mean people suck.

[d-ray657]

Depends on your definition of mean. I would say it is pretty mean to layoff 1000 workers to add a mil to an executive bonus, but the executive would not think so - or wouldn't care.

Regards,

D-Ray

[finnbow]

Like all other economic theories, there's a shred of truth to all of them, yet rarely more than a shred.

[ebacon]

Originally Posted by d-ray657

Depends on your definition of mean. I would say it is pretty mean to layoff 1000 workers to add a mil to an executive bonus, but the executive would not think so - or wouldn't care.

Regards,

D-Ray

Abundance theory economists firmly believe that those 1,000 workers will find work elsewhere. Jobs are abundant, the laid off just need to create them or adapt to fill existing job openings. It's a free country.

Is there a hole in that logic?

[Boreas]

Originally Posted by ebacon

Abundance theory economists firmly believe that those 1,000 workers will find work elsewhere. Jobs are abundant, the laid off just need to create them or adapt to fill existing job openings. It's a free country.

Is there a hole in that logic?

One you could pilot a container ship through.

John

[finnbow]

Originally Posted by ebacon

Abundance theory economists firmly believe that those 1,000 workers will find work elsewhere. Jobs are abundant, the laid off just need to create them or adapt to fill existing job openings. It's a free country.

Is there a hole in that logic?

Yes. This assumes that everyone has the ability to move freely from Alabama to North Dakota at the drop of a hat. Actually, the US is better at such relocation than those in the EU (i.e., an unemployed Greek has a more difficult time moving to Germany (due to language and culture) than someone from Alabama has when moving to North Dakota.

[ebacon]

Originally Posted by finnbow

Like all other economic theories, there's a shred of truth to all of them, yet rarely more than a shred.

Abundance is more than a theory. It is the underpinning of changes to our laws and international trade agreements since the 1960s.

[ebacon]

Originally Posted by finnbow

Yes. This assumes that everyone has the ability to move freely from Alabama to North Dakota at the drop of a hat.

What keeps them from moving?

[ebacon]

Originally Posted by Boreas

One you could pilot a container ship through.

John

Care to expand?

When Obama signed the FTA with South Korea he did it on the contingency that it included retraining money for UAW workers that would lose their jobs. If abundance theory economics is good when Democrats do it then why is it bad when Republicans do it?

Is it possible that both parties have put their faith in a false theory?

[finnbow]

Originally Posted by ebacon

Abundance is more than a theory. It is the underpinning of changes to our laws and international trade agreements since the 1960s.

OK, but things that are seemingly abundant at one moment can become scarce (e.g., corn in the current drought). Does a sense of abundance drive policy? Sure (i.e.,the corn ethanol program). However, I'm still not sure that this makes "abundance" a coherent economic theory (if there even is such a thing).