Less wants mean more abundance

Working Paper

Less wants mean more abundance

by Roberto Verzola, rverzola@gn.apc.org

If we make the realistic assumption that people can be satiated, saturated or satisficed when meeting their needs and wants, we can show that wants have a finite bound and are not “infinite”, as many economists tend to assume.1

If wants are finite and their satisficing levels can be determined, then it becomes possible to compute the ratio between consumer demand for a good and its satisficing level for a person. We can call this ratio the state of relative abundance of a good for a particular person. By aggregating demand and satisficing levels for groups of people and entire societies, assuming that all consumers have a satisficing level for some goods, we can determine the state of relative abundance for these goods in a particular society. Since consumer demand is price-dependent, the state of abundance is also price-dependent and would show the same downward-sloping trend as the demand curve.

In fact, due to a number of factors, some societies show much lower aggregate levels of wants compared to other societies. This decreases the denominator of the demand-to-satisficing-level ratio, and suggesting a higher relative abundance level for these societies. Less wants mean more abundance. These “want-reducing” demand-side factors include:

A culture of cooperation

Cooperation among consumers raises the possibility of further improving the aggregate level abundance, given the same supply and individual demands. With common pooling of resources and cooperative consumption, a group of consumers can enjoy through sharing more goods or services and get nearer their satisficing levels, thereby improving their aggregate level of abundance. A car, for instance, may meet the daily commuting needs of one or up to five persons. Compared to books in someone’s shelf, books in a community library – or videos and CDs for that matter, can be enjoyed by many more people. A huge body of literature can be found around common pool resources and the best ways to manage them.2 Perfect cooperation, which leads to more abundance, is as important an economic concept as perfect competition. A properly-managed free commons, like a freely accessible public library of books, CDs and DVDs, can help create more abundance as much as an unregulated free market often leads to artificial scarcities.

Simple living

Beyond the pooling of resources, cultural mechanisms can also bring satisfaction levels and demand down. In some societies, this can be a major factor in improving the level of abundance. Extolling simple living, highlighting voluntary simplicity, focusing on the spiritual aspects of life, or idealizing asceticism are various ways by which some societies have deemphasized material accumulation and enhanced their level of abundance from the demand side. As Gandhi put it when describing his own experiments in voluntary simplicity, “the real seat of taste was not the tongue but the mind.”3

Focusing on needs

Among the entire range of human needs and wants, it can be argued that not all of these should be treated on equal footing. Obviously, grey areas can exist. However, most will surely agree that those necessities which enable each person to simply survive and live his/her natural life span and each society to reproduce itself should be on top of any hierarchy of needs and wants. These include clean air, potable water, healthy food, protection from the elements and disease, and similar goods and services. If a society focuses on such goods and services its efforts to build abundance, the range of needs and wants that need to be satisficed is narrowed down even further.4

The economics of altruism

There have been societies where one’s worth is measured not in terms of how much one has accumulated, but in terms of how much one has given away. Many still admire this ideal and try to practise it occasionally or even regularly.5 Practised widely, altruism can help cut down the highs and fill in the lows in the income distribution. Filling in the lows, in particular, can reduce society’s failure rate, with direct impact on those who most need it. The continuing and even increasing role of charitable foundations, non-profit organizations and similar institutions reflects the persistence of altruism as a factor in poverty reduction efforts.

Economics of fairness

It is not only a sense of altruism or charity that should impel a society to ensure its members’ minimum basic needs, as these needs are called today in development circles. It is also a matter of fairness, justice and equity. We know that something is terribly wrong in the dominant economics of a society like the U.S. when, despite appropriating for itself much of the world’s resources and leading in the development of new technologies, 11% of the country’s adults and 17% of its children still suffer from occasional involuntary hunger.6 It is also from the U.S. where we get an example of a promising approach. The State of Alaska’s Permanent Fund is one example of an effort to guarantee a minimum income for every citizen.7 Many parallel efforts have been launched to develop the concept of a basic income guarantee (BIG).8

We have shown that abundance is a matter not only of supply but also of demand. Where societies are more cooperative rather than competitive, where a simple life of material sufficiency and intellectual/spiritual richness is instead sought after, where those who enjoy abundance are passionate about sharing it, and where the means for meeting the most basic human needs receive the most attention as a matter of right, then the members of these societies can enjoy much greater abundance.

1Verzola, Roberto. 2009. “Finite Wants Make Relative Abundance Possible”. https://rverzola.wordpress.com/2009/01/21/finite-demand-makes-relative-abundance-possible/

2See, for instance, Elinor Ostrom, Thomas Dietz, Nives Dolšak, Paul Stern, Susan Stonich and Elke Weber (eds.). 2002. The Drama of the Commons. National Academy Press, Washington, DC. See also Elinor Ostrom. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University, Cambridge.

3Gandhi, M. K. 1927. An Autobiography (The Story of My Experiments with Truth). Navajivan Publishing House, Ahmedabad. p. 52.

4 See Frank Rotering. 2008. Needs and Limits: A New Economics for Sustainable Well-Being (2nd ed.). http://members.shaw.ca/needsandlimits/pdf_files/needs_and_limits-2nd_edition.pdf

5The term “gift economy” may not be appropriate to describe this, since gifts are often seen as signalling mechanisms with various other motivations aside from altruism.

6Food Research and Action Center, “Hunger in the U.S.”, http://www.frac.org/html/hunger_in_the_us/hunger_index.html

7Alaska Department of Revenue Permanent Fund Dividend Division. “FAQs”. https://www.pfd.state.ak.us/faqs/index.aspx. See also Alanna Hartzok. 2002. “The Alaska Permanent Fund: A Model of Resource Rents for Public Investment and Citizen Dividends”. Earth Rights Institute. http://www.earthrights.net/docs/alaska.html

8The U.S. Basic Income Guarantee Network. “What is the basic income guarantee?” http://www.usbig.net/whatisbig.html

One Comment

  1. Posted March 1, 2009 at 4:59 pm | Permalink

    Just passing by.Btw, you website have great content!

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    Making Money $150 An Hour

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