Economy and Economic Goods
Scarcity, requirements, available quantities, and economizing
If available command covers all requirements, the shortage is zero. If not, the actor must preserve higher-ranked uses first.
Compare requirements with available command. When requirements exceed command, the good becomes economic and uses must be ranked.
| § | Carl Menger | Eugen von Bohm-Bawerk The Positive Theory of Capital | Ludwig von Mises Human Action | F.A. Hayek Individualism and Economic Order |
|---|---|---|---|---|
| §1 | Goods become economic when requirements exceed commandMenger separates goods in general from economic goods. A thing may satisfy a need and still not require economizing if it is available beyond all requirements. Air under normal conditions is useful but not economic because no one must allocate it. A good becomes economic when the quantity available to a person or society is smaller than the full requirement for it. Scarcity, in this precise sense, forces choice. | This gives scarcity a rigorous meaning. It is not mere physical limitedness; it is insufficiency relative to requirements. Capital theory must always ask which means are scarce in relation to the ends they serve. ✓ Agrees | The point fits perfectly with action. Where all wants are fully satisfied without sacrifice, there is no choice and no economic problem. Economics begins where means are insufficient for all desired ends. ✓ Agrees | Menger's formulation makes scarcity contextual and knowledge-dependent. What counts as available, and what counts as required, depends on expectations, techniques, and plans. ✓ Agrees |
| §2 | Requirements must be estimatedTo economize, people must estimate their requirements. They ask how much of a good is needed for direct satisfaction and how much is needed as a higher-order input for future goods. This estimate is never a purely mechanical total. It depends on expected wants, production plans, seasons, techniques, and the importance of different satisfactions. | The future-oriented estimate is crucial. Higher-order goods must be judged by their ability to produce future lower-order goods, so present economizing already contains a capital calculation problem. ✓ Agrees | Menger is describing the actor's appraisement. The actor anticipates future conditions and allocates scarce means according to ranked importance. Error is possible because the future is uncertain. ✓ Agrees | This section points directly to the knowledge problem. Requirements are not simply given to society as a single number; they are formed across many plans and local circumstances. ✓ Agrees |
| §3 | Economizing means ranking usesWhen available quantities fall short of requirements, people must economize. They preserve the most important uses, postpone less important uses, and avoid waste. This does not yet require money or markets. Even an isolated person must decide whether a quantity of water should be used for drinking, cooking, washing, animals, or irrigation. The logic of allocation appears before exchange. | The ranking of uses prepares the theory of marginal utility. The importance of a unit depends on the least important satisfaction that depends on command of that unit. ✓ Agrees | Menger's isolated actor is enough to establish the logic of choice. Market prices later express these choices socially, but the root is ordinal ranking by acting individuals. ✓ Agrees | Before prices coordinate different people, each person coordinates uses within a plan. Market order extends this economizing problem across many plans. ✓ Agrees |
| §4 | Non-economic goods can become economicGoods can move between non-economic and economic status. Clean water may be abundant in one place and scarce in another. Timber may be free in an unsettled forest and dear near a growing city. A change in population, knowledge, technique, transport, or legal command can turn an abundant good into an economic good, or an economic good into a non-economic one. | This reinforces the relational nature of economic goods. No good has permanent economic status by its physical essence alone. ✓ Agrees | The change in status follows from changed action conditions. If command becomes limited relative to wants, the actor must choose and economize. ✓ Agrees | The examples show why economic facts are discovered over time. New uses, new scarcities, and new techniques alter the practical meaning of resources. ✓ Agrees |
| §5 | The visual map of Chapter 2Chapter 2 can be read as a scarcity map. First estimate requirements. Then compare requirements with available command. If command is sufficient for every relevant use, the good remains non-economic. If command is insufficient, the good becomes economic and must be allocated among competing uses. From this point, value theory can begin. | The map leads naturally to marginal utility: the value of a unit is tied to the marginal use that would be lost. ✓ Agrees | It also leads naturally to action and calculation: scarce means must be allocated to higher-ranked ends. ✓ Agrees | And it leads naturally to prices: social economizing requires signals that summarize dispersed requirements and available quantities. ✓ Agrees |