The first lesson of economics is scarcity: there is never enough

O children of the future, hear the words of Thomas Sowell, who speaks of the eternal dance between economics and politics: "The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics." With these words, Sowell uncovers the paradox that lies at the heart of human governance and desire. Economics teaches us that the resources of the world are finite, and that scarcity governs our choices. But in the realm of politics, where promises and desires often drive the course of action, scarcity is ignored, and the belief in limitless possibilities often takes hold, leading to decisions that defy the natural limits of the world.

In the ancient world, the philosopher Aristotle understood that scarcity was an inherent part of human existence. In his writings, he spoke of the need for a just distribution of the world’s resources, knowing that human nature and ambition could never fully satisfy the endless demands of the people. Yet, when the political leaders of the time acted, they often did so as though there was an abundance of wealth, land, and resources to go around. Much like Sowell's insight, Aristotle saw that politics could be a force that ignored the limitations of economics, leading to unjust policies that would eventually lead to strife and imbalance. In the pursuit of power, those in leadership positions disregarded the realities of scarcity and instead offered empty promises that could not be fulfilled.

The tale of King Midas, who wished for the ability to turn everything he touched into gold, is a potent metaphor for politics ignoring the limits of economics. Midas's wish, while born of his desire for wealth, led to his undoing. His greed, unchecked by the understanding of scarcity, transformed his life into a nightmare, as he was unable to eat, drink, or embrace those he loved, for everything turned to gold. In the same way, political leaders who ignore the inherent scarcity of resources in favor of boundless promises may find themselves trapped in a world where their desires exceed what is realistically possible, causing harm to both the people and the land they seek to govern.

In more modern times, Sowell’s words echo the realities of governmental decisions made without regard for the limits of resources. The Great Society programs of the 1960s in the United States, though well-intentioned, were based on the belief that government spending could eliminate poverty and inequality without considering the economic limits of such an undertaking. The result was an ever-growing deficit, and an economy burdened by debt. In the pursuit of perfect solutions, politics ignored the first lesson of economics—that resources are finite, and that any attempt to satisfy all desires without understanding these limits will ultimately lead to unintended consequences.

O children, let Sowell’s wisdom be your guide as you navigate the world of economics and politics. The tension between the scarcity of resources and the insatiable desires of politics is a struggle as old as civilization itself. We must recognize that the world’s resources are not infinite, and that those who govern must acknowledge the limitations that govern all human endeavors. The challenge lies not in ignoring scarcity, but in facing it with wisdom and prudence, understanding that the pursuit of unlimited promises without respect for reality can only lead to destruction. As you look to the future, may you learn to balance ambition with wisdom, and never forget the hard truths of economics, for it is only through this understanding that true progress and prosperity can be achieved.