Economics has always assumed a condition of scarcity and defined its role as the efficient allocation of scarce resources relative to unlimited human wants. Nowhere does abundance figure in the definition or goals of economics.
Practically all economic textbooks are premised on scarcity. Check their index: “scarcity” would be found in the early pages - the first chapter, probably; “abundance” would be missing, creating a blind spot among economists. Samuelson and Nordhaus write in page 2 of their textbook: “At the core, [economics] is devoted to understanding how society allocates its scare resources. Along the way to studying the implications of scarcity, economics tries to figure out the 1001 puzzles of everyday life.”30 Some books might refer to “overproduction”, suggesting an anomaly to be avoided or corrected. Misunderstanding abundance as overproduction logically leads to counter-productive measures restricting abundance, a misapplication of concepts developed under assumptions of scarcity.
Yet, once we open our minds, we should see abundance all around us. Solar energy has been with us for billions of years. So have clean air and water, plants and animals, soil life, forests, and the astounding variety of life on Earth, now threatened. Since the Internet emerged, we have also seen an extraordinary abundance of information and knowledge and no lack of people willing to share them freely. Just look at the Web, Yahoo!, Google, Wikipedia, YouTube and all the lesser known but equally heroic and incredibly useful efforts to make information and knowledge freely available on the Internet. New technologies promise even more abundance: in bandwidth through fiber optics, in air time through spread spectrum technology, and in storage through new media.
Clearly, abundance is as much a feature of the real world as scarcity. To understand this blind spot of economics and harness it fully for the human good, we need to construct theories of abundance to complement the theories of scarcity that dominate economics today. In fact, economists who acknowledge “relative scarcity” only need a minor leap of logic to acknowledge “relative abundance”. After all, a glass that is half-empty is also half-full.
Consider the variations in abundance. It can be precarious (collapse imminent), temporary (lasting less than a lifetime), short-term (a few lifetimes), medium-term (many lifetimes) or long-term (longer than human existence). It can be relative (enjoyed by a limited number), local (confined to a specific area) or absolute (accessible to all). The abundance of solar energy and other energy forms associated with it, such as hydro, wind and wave energy, is obviously long-term. Solar energy is universal, while hydro, wind and wave energy are more local. Coal's abundance is medium-term, if the estimates are correct that the world's reserves may last for several hundred years more (i.e., many human generations). Oil, which is perhaps good for another generation or two at current extraction rates, is short-term. In addition, fossil fuel abundance is relative because it is not accessible to all, but only to large firms with enough financial, technical and human resources. While absolute, universal abundance can have free/open access, others may need some form of management. Local resources may need to restrict or even exclude outsiders. Extraction rates may need to be regulated. Moratoriums may even have to be imposed on threatened resources.
The ultimate goal of any management regime should be to ensure against any failure of abundance. The following specific goals are suggested:
1. Make the resource accessible to a greater number of people - ideally, to all. This is merely a restatement of the goal of social justice. Potable water, for instance, is so important to human survival that this goal should be paramount for this resource, abundant or not. For water - and for land, as well - Gandhi's observation rings true: “There is enough in the world for everyone's need, but not for everyone's greed.” These resources can become abundant for all or scarce for many, depending on how they are managed. In a country like the Philippines, land seems scarce to the millions who do not own a home lot because the ownership structure allows a few to own thousands of hectares of land. Agrarian reform is, in effect, an effort to keep land abundant for every rural household that is willing to farm land. Some have also argued that family-size farms can be as productive and efficient, if not more, than huge, corporate-held tracts.31
2. Make sure the resource will last for generations, preferably indefinitely. This means turning limited, temporary or short-term abundance into long-term abundance. This is also a restatement of the goal of sustainability. Rain forests, for instance, have been providing countless generations of indigenous tribes everything they needed for survival. At current rates of depletion, however, our generation has turned rain forests into a short-term or temporary resource that will be gone in a few generations, if not within our generation. Economists should be familiar with the difference between income and capital, natural resource stocks and flows. In the rain forest case, ensuring long-term abundance means limiting the consumption of forest products to the natural income we get out of the forest, and refraining from eating into the capital stock. Strategies for managing non-renewable resources, or information resources, would of course be different.
3. Build a cascade of abundance. Abundance in one sector (or of one good) can help create abundance in another sector (or of another good). The food chain is a good example of abundance at one level (solar energy) supporting abundance at the next level (plants) which supports abundance at a higher level (herbivores), etc. By building linkages among farm components, permaculture32 teaches how one type of abundance can be made to support another through conscious design. A similar cascade occurs on the Internet, which supports the Web, which in turn supports search engines and new applications like wikis and blogs, one abundance building on another. The sun is a flexible energy source that can provide, through collectors and concentrators, a wide range of temperatures to match various end-uses. By tapping it more, industry can harness potentially huge amounts of energy for various productive activities, opening up possibilities for creating abundance in many other sectors. Photovoltaic (PV) cells made from silica, also an abundant resource, can transform sunlight into cheap electricity for industrial, commercial and home use. This can make viable the electrolytic extraction from water, another abundant resource, of hydrogen and oxygen. These can be stored and later used in fuel cells, holding the promise of a pollution-free hydrogen-based economy.
Most computer equipment, which are silicon-based like PV cells, have either been halving in price or doubling in capacity every few years or so. LCD projectors now sell for a fifth of their price ten years ago. If PV prices follow suit, perhaps due again to China's entry, we can look forward to a cascade of solar-based abundance in the future.
Eventually we should be able to recognize conditions that lead to abundance and then learn how to create more abundance. We alrady have a rough idea how abundance happens in nature, in agriculture and in the information sector. We simply need to nurture the forces that generate such abundance. One challenge is how to emulate ecological processes such as the cyclic loops of nature to create a similar material abundance in the industrial sector, without disrupting natural cycles
4. Develop an ethic that nurtures abundance. To manage abundance well, its community of beneficiaries must adopt a behavioral ruleset and the corresponding enforcement mechanisms. It is desirable to eventually turn this ruleset into a mindset, similar to Leopold's land ethic33 and Postel's water ethic34, that makes the other goals of social justice, sustainability, cascading abundance, and dynamic balance second nature to all.
5. Attain dynamic balance. In a finite world, material abundance cannot grow indefinitely. Nature shows us how abundance can occur indefinitely through a dynamic balance (i.e., harmony) of abundant elements connected in closed material cycles. Citing permaculture again as example, a similar balance can be attained in a farm by modelling it after long-lived self-regenerating ecological systems to design what are, in effect, forests or ponds of food and cash crops. After we learn to design similar closed loops in industry, we can bring this sector back into harmony with the rest of the living world.
At least four major sources of imbalance threaten our world today:
a) The current reliance on a non-renewable energy base. Although the size of the world's fossil fuel stock may be debatable, it rate of exploitation will sooner or later surely fail to keep up with rising demand, causing major economic disruptions.
b) The linear production processes of the industrial sector. The industrial sector uses raw materials from nature and agriculture and turns them into finished products. Whether these goods are durable, reusable or disposable, they are eventually thrown away as waste. Unlike the closed cycles of nature, this is a linear process that consumes biomass, dead matter and energy at the input end and produces synthetic, often non-biodegradable and even toxic goods and wastes at the output end. This one-way transformation constantly disrupts the dynamic balance and closed loops of the natural world. Eventually, the finished goods reach the end of their useful life -quickly, if they are disposable or one-time use goods - and become wastes too. If these wastes enter the body of any living organism, including humans, they can seriously disrupt its health. In effect, fuelled by an ideology of accumulation - industry is turning the natural world into a synthetic - and ultimately, unliveable - one. The solution, as Barry Commoner proposed35, is to turn linear industrial processes into closed material loops and recycle all industrial wastes as well as goods that have reached the end of their useful life back into the production process.
c) The unchecked growth of human population. For every biological form on Earth except the human, at least one more life form exists - feeder, predator or parasite - that limits the former's population and keeps it in balance with the rest of the living world. This food chain creates an energy pyramid that is wide at its base, where plants directly tap solar energy, and becomes narrower towards the top, as we go from herbivores and to predators. There is one exception. the human population at the apex of this biological food chain has grown disproportionately larger than the rest of the pyramid, appropriating for itself much of the Earth's livable habitat as well as production of energy and biomass. With no natural enemies to effectively limit our population, we have to discover other means to do so. (Perhaps the global drop in sperm counts is nature's own response?) Because it involves the fundamental biological urge to reproduce one's kind, the issues are complex and the debates rage on. But solutions we must find.
d) The unlimited corporate drive for profit. The business firm is programmed to maximize its return on investment, no more, no less. This simplistic programming as a profit-seeker driven purely by self-interest has made it better adapted than the human to the world of markets, competition and capital accumulation which economists have defined the world to be. Being better adapted, corporations have become the dominant economic player in our world. Because, under our legal systems, corporations are legal persons distinct from their board of directors and shareholders, corporations have now acquired a life of their own. They can feed themselves, regenerate, reproduce, make plans in pursuit of their internal urge, and hire people to execute these plans. Using their superior economic power, they have also acquired political power and taken over media and education. They have become so well-entrenched and their accumulated economic, political and cultural powers so extensive that if they were counted as a distinct man-made species, they would now be considered the dominant species on this planet, having managed to domesticate the great Homo sapiens itself. As corporations relentlessly pursue their internal programming, seeking profits without limit, they are causing huge global imbalances that threaten the survival not only of human societies but of many other species as well. Displacing these runaway automatons from their dominant status and reprogramming them with more benign goals (Asimov's laws of robotics36, for instance) has become the greatest challenge of our era.