Free-market advocates have long claimed that scarcity – widely held to be the bedrock of economics and the natural state of the world – drives humanity to use resources as efficiently as possible. The counterclaim has been that scarcity is inherently a bad thing and that state-directed action can be taken to eradicate it. However, a recent interdisciplinary study by the Lithuanian Free Market Institute (LFMI), an Atlas Network partner based in Vilnius, has validated the free-market view of scarcity and has examined the effects of state action taken to combat scarcity. The recently unveiled innovative research on scarcity brought expertise and outlooks from the fields of anthropology, economics, psychology, philosophy, sociology, and theology. LFMI’s handbook of public policy analysis, titled Government Against Scarcity: How it Changes Who We Are and published on September 21, focuses on four areas – labor relations, money, consumption habits, and social support – where governments increasingly restrict individual freedom, choice, and initiative. The handbook is a continuation of an interdisciplinary peer-reviewed study published last year, The Phenomenon of Scarcity: Being, Man and Community (link in Lithuanian).
The focus on the four areas of labor relations, money, consumption habits, and social support examines how state intervention crowds out voluntary decisions in each. It additionally introduces a new method of analysis in understanding the role that scarcity plays in human existence. One central takeaway is that, absent the peaceful cooperation that comes with free-market systems, the only other option is coercion through many means, from theft to war. Heavy government involvement in the name of reducing scarcity can result in perversion of morals and conceptions of justice. Perhaps one of the most significant outcomes of the study was the distinction between actual scarcity (positive scarcity) and secondary scarcity (negative scarcity). Secondary scarcity results from human error or imperfection.
“The respective paradigms of action are rooted in the perceptions of the structure of being,” wrote editor of the handbook, Aneta Vainė, et al. “If scarcity is only seen as something negative, all institutions that represent people will focus on ‘freeing’ them from scarcity. Unlike this line of reasoning, the work of free-market think tanks intuitively revolves around restoring an accurate understanding of scarcity and the individual’s relationship with this fact of life. Those efforts are embedded in the perception that scarcity plays a vital role as a catalyst or change and advancement; that the order we defend has not been devised by some human genius or wilful decision. It is the order encoded in the structure of being and in humanity, characterized by scarcity and people’s intrinsic power to respond to it.”
Aneta Vainė at Europe Liberty Forum 2017 with Linda Whetstone, Chairman of the Board of Trustees of Atlas Network, and Karin Svanborg-Sjövall, CEO of Timbro (left to right).
LFMI’s work on scarcity was also highlighted in a recent panel at Europe Liberty Forum, where Dr. Tom Palmer interviewed Žilvinas Šilėnas and Vytautas Žukauskas, president and vice president of LFMI, respectively.
Žilvinas Šilėnas speaks during the panel on LFMI’s interdisciplinary study at Europe Liberty Forum 2017.
Žukauskas spoke to the productive power of scarcity: “Scarcity is just potentiality. It is the reason we as humans do what we do … It is inspiration to seek something better … If there was no scarcity there would be no change … Scarcity is inevitable…secondary scarcity, which is a result of human error, of human imperfection, [is not].”
Vytautas Žukauskas fields a question during the panel on LFMI’s interdisciplinary study at Europe Liberty Forum 2017.
Read The handbook is a continuation of an interdisciplinary peer-reviewed study published last year, The Phenomenon of Scarcity: Being, Man and Community (link in Lithuanian)