Armen Alchian on Scarcity

Humans behave according to their motivations; that is, human action is purposeful, and the range of our imagination is the only limit to what we wish to achieve. However, an important aspect of the natural world and the human condition constrains our choices. Although our wishes may seem unlimited, the resources we need to satisfy them are not. We don’t need to enter into a discussion about whether natural resources are finite. It suffices to say that our lifespan is finite; human activity is always bounded by scarcity. In other words, because scarcity is absolute for us as mortal beings, regardless of how successful we are in making resources available to satisfy our wants, there always will be a relative scarcity of means to meet all our wants. Therefore, our choices always imply trade-offs. Moving from the exegesis of this passage, we may link it with the central theme of Armen Anchian’s research: - property rights. The assignment of exclusive use of some of the available resources to specific individuals is a fundamental tool for human society to be established and to prosper. It helps individuals to cooperate peacefully in the face of scarcity by helping to allocate scarce resources to the most desirable ends.