This
multiplication of wherewithal falsified all apocalyptic Malthusian
scenarios hitherto. Operations research, mathematical modeling,
transparent decision making, free trade, and professional management -
help better allocate these increased resources to yield optimal results.
Markets are supposed to regulate scarcity by storing information about
our wants and needs. Markets harmonize supply and demand. They do so
through the price mechanism. Money is, thus, a unit of information and
a conveyor or conduit of the price signal - as well as a store of value
and a means of exchange.
Markets and scarcity are intimately related. The former would be
rendered irrelevant and unnecessary in the absence of the latter.
Assets increase in value in line with their scarcity - i.e., in line
with either increasing demand or decreasing supply. When scarcity
decreases - i.e., when demand drops or supply surges - asset prices
collapse. When a resource is thought to be infinitely abundant (e.g.,
air) - its price is zero.
Armed with these simple and intuitive observations, we can now survey
the dismal economic landscape.
The abolition of scarcity was a pillar of the paradigm shift to the
"new economy".
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