Daily Archives: September 23, 2020

The Central Dilemma of Economics

The central dilemma of economics is often presented as ‘people have infinite wants in a world of finite resources,’ and I would say that it is generally true, but it misses one vital aspect. That while there are in fact finite resources individuals are in general incapable of perceiving the limitations and emotionally react as though resources were in fact infinite.

Electricity is a limited resource, generated from limited resources and distributed by limited system but an individual’s relationship to electricity, at least in rich nations, is that it is always there in limitless amounts. Food, material good, are all produced in quantities so vast that it becomes nothing more than an abstraction in same way that a single death is a tragedy and 200,000 thousand a statistic.

However, when the resource limitations are stark and undeniable, survival and disaster situations, people do not act like engines of infinite wants. Contrary to most disaster and post-collapse stories people in general do not become self-centered engines of destruction and exclusion but often become more generous and supportive to others, including strangers.

On any scale beyond a few thousand people and with resources that feel infinite economics central dilemma applied in full force, but what happens if very tightly contained and constrained environments that last indefinitely?

That is one of the central questions in what is likely to be my next novel. It should be fun to explore.

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