Heterodox economists on abundance and sufficiency: the internal critique

The internal line of critique comes from within economics and is made by economists who argue that economic studies in general should concern wider issues than the neoclassical focus if a deeper understanding of the economy is to be achieved (e.g., Hodgson 1998; Lawson 2003; Lee 2009; Sen 2006).

Economic theory should go beyond the neoclassical perspective and embrace a wider array of economic schools, for example post-Keynesian economics, feminist, Marxist, Austrian, institutional, ecological and green economics. This is the heterodox critique. ‘Heterodox’ is an umbrella term for the various non-neoclassical economic schools (Lawson 2006; Lee 2009). This line of critique presents at least three additional kinds of problems associated with the Sufficient Abundance and Scarce(SAS) theme that I would like to discuss in this section: namely, the problem of the universalization of scarcity, the limits to growth, and the assemblage of resources.

The universalization of scarcity

There exists a vibrant tradition of heterodox economists (Davis 2008; Lee 2008) who have criticized the assumption of and the exaggerated focus on scarcity in neoclassical economics, this is the problem of the universalization of scarcity. This universalization of scarcity also implies that the problem of abundance and sufficiency is largely neglected. This sole focus on the assumption of scarcity is not surprising, from a neoclassical perspective on economics, because its main problem of efficient allocation completely hinges on it – as shown above. However, it is not clear why some non neoclassical approaches ignore the concepts of abundance and sufficiency (e.g., Turner and Rojek 2001). It is apparent that abundance and sufficiency are important concepts (Dugger and Peach 2009). They sometimes play an even more important role than scarcity does. Chase illustrated this point: ‘Two men are lost on a great desert. One has a full bottle of water, the other a bottle quarter filled. As they move wearily onward, hoping for an oasis, justice demands that they pool the water supply and share it equally. Failure to do so will undoubtedly result in a fight’ (Chase 1934, p. 51). In a situation of abundance, conflict is unnecessary, Chase argued: Now let us transport these two men to a row-boat on Lake Superior. Again they are lost, and again one has a full bottle of water, and one a bottle a quarter full. The full bottle man refuses to share and a battle ensues. Maniacs! There is a plenty of fresh water over the side of the boat. The desert is the Economy of Scarcity; the lake, the Economy of Abundance.

The choice between sharing or fighting is chronic in the former, pointless in the latter. Today, throughout western civilization, men in boats are fighting, or preparing to fight, for fresh water. They do not know they are in boats; they think they are still on camels. The lake…is not limitless, but nobody need go thirsty. (Chase 1934, p. 51)

In line with Chase’s argument, some social scientist, a majority of them economist by training, have gone beyond the neoclassical approach and advanced studies of abundance (e.g., Benammar 2005; Bronfenbrenner 1962; Dugger and Peach 2009; Fricker 1999; Galbraith 1958; Hoeschele 2008; Horner 1997; Sheehan 2010; Sherburne 1972). These studies have focused, among other things, on unemployment, which is seen as abundance of labour power (Dugger and Peach 2009, pp. 41 ff., 173 ff.; Perelman 1979; Perelman 1987), on consumer society with its cornucopia of goods and services (e.g., Xenos 1989), on the possibilities of a post-scarcity society as well as on emancipator reasoning (Bataille 1991; Bookchin 1971; Giddens 1990, p. 164; Gowdy 1998; Sherburne 1972; Stoekl 2007). Most of these accounts rest on the assumption that continuous technological development accompanied by deeper self-awareness of what our actual needs are may enable a society that harbours an abundance of resources.

In his famous essay The Economic Possibilities for our Grandchildren, Keynes, for instance, argued that the past has been characterized by plague, war, and famine – in short, a struggle for subsistence. The future, however, may bring about the abolition of this problem:

Now for my conclusion, which you will find, I think, to become more and more startling to the imagination the longer you think about it. … assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not – if we look into the future – the permanent problem of the human race (Keynes 1963, p. 365).
Progress, Keynes argues, is mainly a function of capital accumulations(trade) and technological innovation (via science and innovation). A number of modern classics concur with Keynes’s account, such as those by economic anthropologist Marshall Sahlins and economist John Kenneth Galbraith, but they even argued that the possibilities of abundance are already present in
contemporary society (Galbraith 1958; Sahlins 1972, p. 5). They claim that the problem of the universalization of scarcity in neoclassical economics prevents us from seeing this (at least in Western societies). Nurit Bird-David, when commenting on Galbraith and Sahlins, argued that ‘…the assumption of scarcity continues to influence economic conduct in the increasingly
wealthy West and thereby acts to preserve poverty’ (Bird-David 1998, p. 133).

The limits to growth

In terms of sustainable development or the problem of the limits to growth, all three concepts play a major role, that is, scarcity (e.g., Baumgartner et al. 2006), abundance (e.g., Hoeschele 2008) and sufficiency (e.g., Princen 2005). There are fundamental limitations to how much consumption the planet can handle. Fred Hirsh (2005) argued that there are not only physical limits, but also social limits to growth – even with unparalleled economic growth. He refers to social scarcity as part of the explanation of the social limits of growth. The term social refers to the intrinsic properties of what Hirsch called the positional economy. The positional economy ‘…relates to all aspects of goods, services, work positions, and other social relationships that are either (1) scarce in some absolute or socially imposed sense or (2) subject to congestion or crowding through more extensive use’ (Hirsch 2005, p. 27). This kind of economy can be contrasted with the material economy, which is defined ‘… as output amenable to continued increase in productivity per unit of labor input’ (Hirsch 2005, p. 27). Social scarcity is divided into direct and incidental (Hirsch 2005, p. 20).

Direct social scarcity refers to a want that derives its satisfaction from the phenomenon of scarcity itself. Hirsch gave the example of an art snob: if the satisfaction of owning a Rembrandt comes only or mostly from the fact that the object is scarce, then we have a case of direct social scarcity. If, however, a replica of a Rembrandt gives equal satisfaction as the original, then there is only physical scarcity, which could be mitigated by producing further replicas of Rembrandt.
Incidental social scarcity arises more or less as a by-product of social interaction. Congestion, both physical and social, is an example of this kind of scarcity. Physical congestion refers to crowds and queues of various sorts.

This kind of congestion arises not only because of the physical limitation (of highways, in the football arena, or similar), but also because of their extensive social use. Social congestion, conversely, arises purely from social rela tionships: job opportunities, leadership positions (e.g., captain of a football team, head of departments), or partnerships (e.g., monogamous or bestfriends relationships). These social positions are intrinsically scarce (Hirsch 2005, pp. 19-22). You can of course have many friends, but what defines a best-friend? Similarly, there could of course be shared positions, two persons in the position as head of department, but what if there are five persons, ten or a hundred sharing the same position as head of department?

As long as material deprivation is common, economic growth will have a dominant role. This is not to say that social scarcity is not present in materially deprived conditions, especially in terms of incidental social scarcity. But as society reaches material saturation, direct social scarcity will be more prevalent, for example, in the form of conspicuous consumption (Hirsch 2005; cf. Veblen 2007).

I believe that Hirsch’s concept of social scarcity captures something essential about economic and social life. Nevertheless, one might ask in what ways this concept differs from the concept of scarcity used in other accounts, for instance the neoclassical approach, or say the neo-Malthusian approach. There seem to be some differences. Contemporary ideas about the natural or physical limits to growth build on an elaborate account of Thomas Malthus’s notions (Malthus 1826). Malthus’s original concern was overpopulation, but the same principles Malthus developed apply to other fields as well: for example, energy use, environmental degradation or water scarcity. The neo-Malthusian approach critiques the classical (specifically Smith’s version) and the neoclassical conviction that markets can fully solve or at least mitigate the problems of scarcity.

This links directly to the problem of efficient allocation in the SAS theme. Julie Mattheai argued that ‘…contemporary neoclassical economics views the market economy as the optimal solution to the universal human problem of scarcity…. The market’s invisible hand ‘allocates scarce resources among competing ends’ by adjusting prices…’ (Matthaei 1984, p. 82). But markets cannot fully solve the problem of scarcity, neo-Malthusians have argued, because it does not consider absolute availability or final limitations of various resources (Daly 1974; Daly and Farley 2004).

The rejection of the Malthusian approach was emphasized by Karl Marx, among others. He rejected the notion that scarcity is a necessary part of the human condition. Marx argued vigorously: Malthus’s theory, which incidentally was not his invention…is altogether false and childish … because he regards overpopulation as being of the same kind in all the different historic phases of economic development; does not understand their specific difference, and hence stupidly reduces these very complicated and varying relations to a single rela tion, two equations, in which the natural reproduction of humanity appears on the oneside, and the natural reproduction of edible plants (or means of subsistence) on the other, as two natural series, the former geometric and the latter arithmetic in progression. In this way he transforms the historically distinct relations into an abstract numerical relation, which he has fished purely out of thin air, and which rests neither on natural nor on historical laws (Marx 1978b, p. 276) Marx saw the problem of scarcity differently, at least when it comes to the problem of unemployment.

In order for the ruling class to secure theirpower over the production apparatus of the economy, they need a “reserve army of the unemployed”. One way of achieving this is by promoting population growth in the lower classes. The result is overpopulation, lower wages and poverty. Hence, Perelman wrote ‘…In place of overpopulation, he [Marx] taught us to see the reserve army of the unemployed. Instead of allowing us to become bogged down in concepts of resource scarcity, he demanded of us that we grasp the social content of each situation’ (Perelman 1979, p. 86).

Despite these differences, John Gowdy argued that the Malthusian and Marxian approach are complementary (Gowdy 1986): the former considers the natural mechanisms (e.g., carrying capacity) of scarcity, while the latter focuses on the social mechanisms (e.g., class interests). He argued that ‘With a few exceptions, both Marxian and neoclassical economics take the position that the natural world, in the long run, imposes no constraints on economic activity’ (cf. Georgescu-Roegen 1973, p. 38; Gowdy 1988, p. 34). Marx, however, declares in The Critique of the Gotha Programme that ‘Labour is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labour, which itself is only the manifestation of a force of nature, human labour power’ (Marx 1978a, p. 525). Nevertheless, one might ask: How is value related to the creation of resources in society?

The assemblage of resources

This discussion about the limits to growth shows by the same token the importance of the problem of the assemblage of resources. The concept of resources is central to the SAS theme (De Gregori 1987; Peach and Constantin 1972). It is scarce resources that neoclassical economics seeks to allocate optimally, and it is abundance of resource that some heterodox economists seek to draw our attention to; but what is a resource anyway? A precise definition of the term ‘resource’ or ‘good’ can be found in the writings of one of the pioneers of neoclassical economics (Menger 2004, p. 51 ff.),13 Peach and Dugger 2006, p. 8 but it seems to be more or less given in modern neoclassical economics. A study of the concept of resources is often neglected because it is assumed that only natural scientists can provide an appropriate answer ( ).

But, as shown via the problem of the limits to growth, there are social as well as cultural processes that condition how resources are created and defined (cf. Hacking 1999; Pinch and Swedberg 2008). Accordingly, one can pose several questions here: What is a resource, and how is it related to technology?14 Callon 2001 How do social, cultural and natural mechanisms
interact in order to create a resource (cf. ; Callon 1998; MacKenzie, Muniesa and Siu 2007; Swedberg 1993)? How does society in total (macro) or groups in society (micro) combine, control, guard, share, merge, duplicate, produce, create, invent or simply assemble resources.

Sociological perspectives on scarcity: the external critique

The external line of critique comes from outside the economic tradition (e.g., philosophical, psychological, and sociological critiques). I will focus more specifically on the sociological critique of neoclassical economics. This line of critique has many similarities to the internal critique, namely, it holds that economic theory should embrace a wider array of problems, beyond the problem of efficient allocation. But it is unique with regard to at least one feature. Whereas heterodox economics has focused more on the economy as such (e.g., what is inflation, the role of central banking, conditions for development, etc.), a considerable part of the sociological critique has focused on the relation between the economy and society (Parsons and Smelser 1956; Smelser and Swedberg 2005). Generally speaking, the sociological perspective argues that the economy is essentially social in nature and should therefore be studied as any other social relationship. With the SAS theme in mind, I would like to discuss at least three more problems that stem from the sociological approach: namely, the foundations of the social sciences, the origins of human wants, and the nature of SAS.

The sociological discipline was established partly as a response to neoclassical economics. Sociologists developed theories, at a macro level, to upplement the problem of efficient allocation with issues such as solidarity, social integration and conflicts of interest; at a micro level, it questioned the universality of instrumental rationality by introducing concepts such as traditional and value-oriented action (Swedberg 1998; Turner 1999). However, the assumption of scarcity seems to be present in sociology as well. If scarcity functions as constraints in various optimization problems for neoclassical economics, it seems to function in parts of sociology as an important element of establishing it as a legitimate field of study.

The foundations of the social sciences

Bryan S. Turner and Chris Rojek wished to advance sociology as the discipline that is based on principles of scarcity and solidarity (Turner and Rojek 2001). They claimed that, ‘If sociology is to survive it must establish a position of disciplinary boundaries which is both defensible and practical. We hold that the principles of scarcity and solidarity must be the foundation of such a position’ (Turner and Rojek 2001, p. 23). This is achievable, according to them, through a reinterpretation of the sociological literature and particularly Parsons’s work (Turner and Rojek 2001, p. 68). Through Parsons’s work, there is a unique answer to the Hobbesian problem of order (Parsons 1949, p. 89), which only sociology may provide. Whereas economics concerns the allocation of the scarce resources of a system, political science is about the coercive dimensions of that system, and psychology is about the study of individual cognitive dispositions; consequently, none of them addresses the importance of common norms, values and culture for the establishment of social order (Turner and Rojek 2001, p. ix). Accordingly, Parsons’s approach establishes the appropriate conditions for a division of labour within the social sciences.

Turner and Rojek’s account may be sound, but my primary reason for highlighting Parsons’s work is not only because he can ‘…be considered the last sociological theorist whose work is formed by the debate with economics’ (Beckert 2002, p. 133), but because his accounts rests on the assumption of scarcity. This assumption, it seems, is unwarily imported via the Hobbe sian formulation of the problem of social order. Hobbes claimed that ‘…if any two men desire the same thing, which nevertheless they cannot both enjoy, they become enemies; and in the way to their end, which is principally their own conservation, and sometimes their delectation only, endeavor to destroy, or subdue one another.’ (Hobbes 1839, p. 111; cf. Parsons 1949, p. 89).

It is not clear whether Parsons was aware of many of the issues associated with the concept of scarcity. Both classical and neoclassical economists regards scarcity as fundamental prerequisite for the existence of economics, but is scarcity equally fundamental to sociology? How is Parsons’s account altered if we introduce abundance and sufficiency into his analysis? What if scarcity, as a phenomenon in society, can be created and manipulated by actors to serve some vested interest?

Thus, one of the main points of asking these questions is to make the reader aware of the fact that some of the main problems of the SAS theme require a more elaborate view of SAS and its role in social and economic theory.

I argue that a problematization of SAS casts a different light on Parsons’s thoughts on social order. This claim is not really new; the early criticism of Parsons (and functionalism) attacks him for not providing a proper sociological understanding of the issues of social conflict, social change and dialectical contradictions (cf. Habermas 1985, p. 199 ff.; Holmwood 2005).

Nevertheless, a focus on SAS rather than on conflict takes a slightly different grip on the critique of Parsons, in so far as it questions the assumed reasons for why conflict arises in the first place (the assumption of scarcity) rather than criticizing the absence of an account of how conflict should be integrated into social and economic theory. Even the concept of conflict seems to harbour or assume the notion of scarcity: ‘Conflict refers to a situation in which there is disagreement over how to divide scarce resources’ (Citrin 2001, p. 2547), which resonates well with traditional thinking on why large scale armed conflicts arise (Gleditsch 1998); it is thus not surprising that some sociological theories also assume the relevance of scarcity for social conflicts (cf. Turner 1975). Accordingly, from the perspective of this thesis, both Parsons and some of his critics simply assume scarcity without really questioning the deeper nature of the concept. I do not doubt that scarcity, conflict and social order are causally related somehow; what I am questioning is the internal working of the concept of scarcity, which in turn may have some bearing on how we understand social order as well as conflict.

This also means that in order to be better fit to provide some answers to the problem foundation of the social sciences,16 and to the other problems outlined, we need an elaborated conceptual understanding of what scarcity actually is: With some exceptions, neither sociologists nor economists (neoclassical and heterodox) seem to accomplish this.

The origins of human wants

Turner and Rojek offered three possible explanations of why Parsons did not define scarcity properly. The first explanation is that Parsons simply assumed that nature is niggardly,17 there are simply too few resources available in the global ecosystem, and left the question for the natural sciences to study (biology, ecology, etc.). The second explanation is that scarcity exists because human beings having infinite wants. This is an idea partly based on his reading of, among others, Durkheim, Hobbes, Marshall18 Parsons 1970 and Freud ( ; cf.Turner and Rojek 2001, p. 96). The third explanation is that scarcity exists because of the social plasticity of wants (cf. Veblen 2007; Xenos 1989). The difference between the second and third explanation is that, in the former, human beings are seen to be, by their very nature, equipped with infinite wants or desires,19 Levine 1998 whereas the latter assumes that it is society that plants infinite wants in the minds of individuals. Nevertheless, whether nature or society is the root cause, the result is similar, namely an insatiable human being ( ; Marglin 1998).

With reference to the literature that interested Parsons, Turner and Rojek arguesed that it is the second explanation that is the most probable position of Parsons. It is also this position that they themselves embrace. It is the hedonistic nature of man, not the plasticity of wants, that accounts for general scarcity.
They argue:
…that sexual appetite is the underlying reality of the notion of hedonism. It is human sexuality which is infinite, unsatisfied, excessive, vicious and uncontrolled…it is hedonis- There are of course numerous issues related to the foundation of the social sciences not discussed here (e.g., the nature of causality, ontology, methodology), but SAS is clearly part of it.

This is a position taken by many economists it seems (cf. Hegeland 1967, p. 9); see also Paper V.
18 Marshall, nevertheless, did not take this hedonistic position fully; even if there is an assumption in his account that man ‘…desires not merely larger quantities of the things he has been accustomed to consume, but better qualities of those things; he desires a greater choice of things, and things that will satisfy new wants growing up in him’ (Marshall 1920, p. 73). He based his ideas about preference formation on the relationship between activities and wants (Aspers 1999, p. 655; Chasse 1984, p. 382). It is a relatively simply idea: ‘…the preferences (wants) are generated; by activities. Activities must be understood broadly embracing most of
what men do in business and in every-day life’ (Aspers 1999, p. 656). Culture, then, tames these infinite wants, and culture makes human beings civilized (cf. Freud 1961). tic sexuality which produces wants in the form of an absence or lack with the result that man appears as a perpetually unsatisfied animal. (Turner and Rojek 2001, p. 97).

This does not mean that Parsons or his proponents disregarded cultural influences. On the contrary, culture is the source that restrains or constrains infinite wants. Content can thus only be found through submission to the social forces of society; one of the most important forces is morality, as claimed by Durkheim. He argued ‘…the passions…must be limited. Only then can they be harmonized with the faculties and satisfied. But since the individual has no way of limiting them, this must be done by some force exterior to him…society alone can play this moderating role; for it is the only moral power superior to the individual, the authority of which he accepts’ (Durkheim 1979, pp. 248-249). Sociology has as its object of study to account for how the constraining force of morality functions, how various ultimate ends are grounded in rituals and ceremonial acts, enchanted with meaning.

Sociology studies how these acts essentially link, glue or tie different individuals or social classes together, among other things, through studies on the processes underlying how the restraining of impulsive desires as well as the formation of common wants occurs in society.
Irrespective of how one conceptualizes the human being and her wants (hedonistic, rational, culturally determined, etc.), it seems to me that scarcity as a concept depends on the existence of some sort of want, lack or craving (cf. Heller 1976; Peterson 2001; Springborg 1981; Townsend 1985). Therefore, a study of SAS will have to deal with this problem in one way or another.

I shall call this problem the origins of human wants. Accordingly, one of the main questions here is: ‘Where do human wants come from?’ or ‘How are wants generated?’


One response

  1. not what i’m looking for……..

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