Repealing Economic Law

While I was reading Peter Lawler’s post on The Fat Tax , I was reminded of a conversation with one of my sons about the amazing abundance and prosperity in America.  Even in an economy that we perceive as shrinking or receding or depressed, we live better than kings did, and even the poor do.   Obesity is a problem among our poor and uneducated.  Abundance is the new normal.

So, we have mostly succeeded in repealing the economic law of scarcity.   In some things, we see the effect in the earth, that we can use resources faster than they can replenish themselves; like the fish in the sea or the oil in the ground, we have to seek what we need further and deeper.  We will not, apparently, run out, but prices rise to reflect the greater effort taken to produce.  Other things, like some kinds of food, we can produce in such abundance that prices go down relative to other products.  For example, sugar is so easy to produce that we are becoming fat.  Fat comes cheaply, not just on humans, but for consumption.  Our government sees a problem in that the results of that abundance are now expenses.

Not only that, but we subsidize consumption, through food stamps and subsidies to farmers, thereby repealing scarcity by making true prices irrelevant.  A week or so ago, Phil Izzo’s blog in the WSJ , Half of U.S. Lives in Households Getting Benefits noted that in the first quarter of 2011, 49.1% of the population lives in a household where at least one member received some type of government benefit.  We can complain that spending like that by government is putting us in debt, but we are still doing it.  Much of the population thinks it has a right to benefit, because the economic law of scarcity should not apply in the United States.  It is simply not acceptable.  All of that is a subsidy to producers of goods; people have money to spend that they would not otherwise.

What do they spend the money on?  Apparently on food that makes them fat and products like televisions and other electronic devices that keep them sedentary, making them fat.

Our prosperity, what has it done to us?  If we defied the law of gravity, we’d know the truth in that we will come to ground.  Except airplanes hardly ever do and when they do, we call it a tragedy.  Of course, when we feel the consequences of an economic downturn, and our economy comes to earth, when prices reflect scarcity in relation to demand, we now call that a tragedy, too.

What are the results of our repeal of scarcity?  We all seem to be talking about going on a diet, that’s what.  The choice before us seems to be an economic diet through either taxation or reduced spending.  In essence, we exercise more or consume less.  It’s a heck of a choice.