Scarcity is a somewhat misused term in policy and popular-economic commentary because it is used in the sense that something is scarce if it is valuable and we have "almost run out" of it. Hence "post-scarcity" is made out to mean "we have plenty." But scarcity as "almost out of"
is a terrible definition for actual analysis, and thus not how it is used in economics. Because "almost out of" is relative actual use or actual existing reserves - or both. And it assumes value as an objective aspect of the resource, given technology. Any analysis based on such
sloppy, shifting, and interdependent definitions will itself be sloppy, shifting, and indistinct. As usual, therefore, the terms mean different things in economic analysis than they mean in everyday speech. (Just like 'theory' in science means 'the best bloody explanation we know
of' but in popular usage means basically 'inapplicable' or 'untrue'.) Anyway, economic analysis begins with value, which is experienced through use (consumption, or satisfaction of a want). We have insatiable wants: no matter what want we satisfy, there are more wants we would
like to satisfy. Having no car may mean you have a want for a car to make transportation easier. Having a car may mean you want a nicer car, a better car, a car with a driver, an autonomous driving car, an airplane, or some transportation technology that doesn't even exist yet.
In other words, we cannot satisfy wants to make us fully content (that is, wanting and needing nothing at all). Those who claim that they are fully content haven't pondered on what that means. We're talking Garden of Eden stuff. We're not in the Garden of Eden, so we have wants.
As we always have wants - always can become better off, one way or the other - we must choose between them. Naturally, we choose the ones more valuable to us. But it poses a problem: how to satisfy the right wants.
As wants are satisfied by giving us something we don't have but value, it requires usage of resources to facilitate value through consumption (in economics, consumption means 'valuable use'). Resources aren't just 'natural resources' - they are any means toward the valued end.
As consumers, we choose which valued wants to (try to) satisfy. As producers, we choose how to use resources to create means that directly satisfy people's wants. But something is a 'resource' only if it can be used to satisfy some want. Thus, resources have (indirect) 'value'.
Consider the example of oil. Before the invention of petroleum and the internal combustion engine, finding oil meant death: of your cattle, your business, your land value... After the inventions, oil was still the same physical goo, but economically it became a resource/value.
To summarize, economy is about choice where the choice itself implies scarcity - or we wouldn't need to choose. If cakes aren't scarce, you don't need to choose whether to eat it or have it - you can do both (at no expense). Economizing simply means choosing what is most valued.
Economy itself would be unnecessary in the face of abundance (which here means 'no scarcity', ie no need to choose). Economics, in other words, is the study of how to get as much as possible out of what is limited; it is the study of value: its creation and distribution.
It's thus nonsense to claim we live in a post-scarcity society. It's also nonsense to claim a resource does not have value, because if it has no value it is no resource. There are plenty of matter and energies that aren't resources - like oil before petroleum/internal combustion.
It is only when we find a use for them - and thus have to choose to use them in specific ways - that they become valuable and thus resources (economic goods). This all raises the question, how do we economize properly? How do we maximize want satisfaction using limited resources?
Answer: we economize (choose according to valuation). The organizing of production that facilitates consumption (want satisfaction) can take many shapes and forms: including spontaneous market order and centralized rational planning. The amazing contribution of economics is the
knowledge of how we don't need centralized planning or power, but that open markets with free individuals generate prices (objective relative measures of value) that generate a resource allocation that satisfy nearly the maximum of wants that people have using existing resources.
As the price of resources reflects the value they can generate, it automatically adjusts to outstanding wants and the (present and expected) technological production possibilities. That's why prices go up when the supply of it becomes lower than the demand, in relative terms.
Prices are a means to coordinate production and ration resources so that we don't overuse or underuse them relative to what they can accomplish in terms of want satisfaction. Does this mean we cannot run out of resources? No, certainly not. But it means that as supply diminishes
the incentive to create more, to shift to other means, to figure out how to satisfy other wants, etc., gets stronger. For oil, for example, it may be the case that when there isn't much left in the reserves, innovators and entrepreneurs figure out other ways to satisfy wants. So
maybe nobody will want the little oil that remains when we get to that point - because wants are better satisfied using other resources. It could even mean that oil is no longer a resource, because other things are better as means to satisfy the wants more valued by consumers.
Yes, something that used to be very highly valued because it provided great want satisfaction may be valued nothing at all after we have found other wants and other means. There are plenty of examples of this in history. But as soon as we stop using something because it is not
sufficiently valued anymore, in relative terms, it stops being a resources. If we all choose to use things that have nothing to do with oil, because we don't value what oil can give us, then oil is no longer a resource - and does not need to be economized. It's that simple.
