ABSTRACT
Introduction One of the key concepts in neoclassical economics is “scarcity”. It is used to explain price determination in the goods and services markets, the high levels of interest rates, the value of money and the allocation of all resources – tacitly explaining away the problem of unequal distribution of wealth and income. The notion of scarcity permeates neoclassical modelling so much that most introductory textbooks define the field of economics as “the study of the allocation of scarce resources among unlimited wants” – thus reducing humanity’s ‘economic problem’ to one of “scarcity”. In short, scarcity is the basis of the entire neoclassical system of thought. The problem, however, is that the existence of scarcity is always assumed but never proved. Whether we are dealing with the trivial issue of satisfying the appetite of a gluttonous man or with a more fundamental question such as the need for financing for the construction of a school or a hospital, neoclassical economists are quick to put forth the argument of a binding constraint of scarcity – either of food or of money. The scarcity of money, as it turns out, is the overarching argument used to justify all the ills in society. It justifies hunger and malnutrition, homelessness, illiteracy and all other manifestations of poverty.
