Austrian Economics Part Three – Value

Matthew John Hayden

Scarcity is the inescapable frame in which human life resides. Our limited minds and bodies subject us to incomplete and halting control over the environment around us. In the face of this we order – in our minds – the different ends we could pursue and the means we could employ to attain them. We order our wants by the utility we feel we’ll get from satisfying each of the wants in question. With these scarcity calculations come the scarcities inherent in ourselves. First is our own limited stamina which finds expression as the disutility of labour, or the lack of motivation without external incentive to take action. Second is time. We can only use any given moment in time to actively satisfy one goal at a time, productivity aids and delegation notwithstanding. We’re also mortal; our time will someday run out.

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Austrian Economics Part Two – Scarcity

Matthew John Hayden

An Austrian method can show us the nature of our madness. We act to transfer from a present, less satisfying state to a future, more satisfying state. We do so continually, because no sooner have we arrived at one satisfaction we realise there is more to do. And that holds true until death, for better or worse. This has all been established already, so now it’s time to attempt to understand how humans respond to scarcity, being as that is one of the two conditions placing constant and variable limitations upon what can be enjoyed or achieved at any given time and place during our finite lives. This formless all-thing called scarcity is what makes us economise and so is the basis of economics itself. Scarcity is defined economically as the condition in which each use of a resource has the effect of impairing subsequent uses of that resource in some way. Continue reading