Scarcity – The 21st Century Crisis
by – Marcus Fernandez
Scarcity refers to the limited resources due to which the economic problem arises. Scarcity occurs when there are unlimited wants but only limited resources. Scarcity leads to the basic economic problem which states that human wants are infinite but resources are limited.
It is the human nature to want more and as the population of the world increases so does the demand, when the demand for a resource exceeds the supply of that product scarcity arises. For example if a shop has a supply of a hundred apples but a demand from two hundred people the shop will face a scarcity of apples, to counter this the shop may then decide to raise the price to reduce demand, now the people will have to make a choice, do they really need the apples at the higher price? This shows that scarcity leads to several choices for suppliers, consumers and producers.
When scarcity affects resources the impact is severe, as the demand is higher than the supply of the resource that may be depleting. Today oil, coal, water and physical land are facing major scarcity. Oil and coal for example are our main sources of fuel essential for transport and energy, however as these resources are non-renewable and being exploited by the growing population they are fast depleting and soon may disappear for good.
Currently one of the best examples of scarcity faced today is in Singapore. Singapore is a small island with an enormous population for its size. The land size in Sinagpore is approximatly 639 sq km. The physical land in Singapore is very limited yet very important for residential, infrastructural, industrial and commercial purposes. However, with the population rising and available land depleting Singapore faces major land Scarcity. To counter this issue the Singapore Land Authority (SLA) decided to start a land reclaimation initiative, this helped increase land area but did not affect the population in any way, the population continued to grow and Sinagpore faced land scarcity again. In order to reduce scarcity the population had to be controlled, and inspite of the several population control methods made by Singapore the populatiion still rises and the land is becoming scarcer each year. Singapore’s current population is around 5.5 million and the land area of under 700 sq km is far from sufficient. This issue in Singapore has been damaging to the economy and is probably one of the country’s most grave problems especially since Singapore is one of the most famous business hubs on the planet. This shows how scarcity can affect an economy that in turn leads to important choices and decisions.
Scarcity can also have global affects, for example the scarcity of water is faced in almost every continent, this impacts the global economy and results in choices that have to be made by governments as well as individuals.
Scarcity is the result of infinite demands for finite resources and is faced in every nation in some way; scarcity is the root of all global economic problems and the reason for the birth of The Basic Economic Problem. Scarcity is the incurable disease that will continue to infect the planet as long as the human race is in control.