Chrizzele Q.

Sonsing
BSA-A2B
Dealing with Scarcity
Societies have dealt with the problem of scarcity in diferent ways.
. !n traditional societies" the #ing or chief did most of the allocation of
goods and services" and they did fairly well from it. $he ordinary
people %s%ally lived a life of ob&ect poverty" b%t they were e'pected to
provide the r%ling gro%p with everything they wanted whenever they
wanted it.
2. (%ring the Second )orld )ar" co%pons were %sed to allocate a limited
s%pply of cons%mption good. *ssential goods li#e petrol and fabric
co%ld only be bo%ght with a co%pon. $his limited the demand for
scarce goods.
+. !n the Soviet ,nion" the problem of scarcity was solved by -%e%ing.
$he s%pply of bread and meat was hardly ever s%.cient to meet
people/s needs. 0ost of the time the shops were empty.
)hen s%pplies came into the shops" people wo%ld -%e%e to ma#e their
p%rchase. $hose who were to slow to get into the -%e%e wo%ld miss
o%t.
1. !n mar#et economies" the problem of scarcity is solved by prices. $he
price of every prod%ct re2ects the s%pply and demand for that prod%ct.
!f the demand for a good increases relative to the s%pply" the price will
increase" which will red%ce demand. !f the s%pply of the prod%ct
increases then the price will fall" enco%raging more people to b%y the
prod%ct. 3rices ad&%st %p and down %ntil the demand matches s%pply.
$he 4rst three options leaves one gro%p of people dissatis4ed. $he mar#et
option" also leave some people dissatis4ed" b%t it does help people to ad&%st
their wants to what is available" beca%se prices allow them to -%antify the
costs of their choices. !f a person wants a high de4nition television" they can
wor# o%t e'actly how many ho%rs they will have to wor# to pay for it. $hey
can see in advance the cost of satisfying this need.
3rices have the efect of red%cing the demand for goods to a more realistic
level. 5or e'ample" if high-powered sports cars were free" everyone wo%ld
want one. Beca%se the price is act%ally well beyond the reach of almost
everyone" most of %s &%st ta#e sports cars of list of things we might want.
$he high price means that we rarely thin# abo%t the possibility of owning a
sports car. 3rices enable %s to foc%s on choices that are more realistic for o%r
sit%ation.
0ar#et prices do not eliminate scarcity" b%t they help people ma#e choices
that match their cons%mption and saving to their earning capacity.
Innovating to overcome scarcity: Chinas Experiences and Future
Development
6eso%rce scarcity is an eternal theme in economics. 7r we wo%ld say
that" the whole s%b&ect of economics is mainly abo%t how to allocate scarce
reso%rces e.ciently. !n reality" the whole h%man history" especially the
modern world history" has been abo%t how h%man beings have created
technologies or developed innovative ways to meet the challenges of limited
reso%rces available. China is not strange to the problem of reso%rce scarcity
and innovation. Act%ally" China is poorly endowed with nat%ral reso%rces on
a per capita base8 the level of reso%rce endowment is lower than the world
average. )ith 29: of the world pop%lation" b%t only ;: of world farmland
and less than ;: world fresh water" we managed to feed o%r people of .+
billion and the standard of living is improving" at even a faster pace over the
last two decades. )e have achieved this by ma#ing %se of #nowledge and
innovations of the world" incl%ding those contrib%ted by Chinese scientists
and engineers.
$o p%t the iss%e into conte't" ! wo%ld li#e to cite an e'ample of a
gen%ine Chinese innovation that has helped %s in increasing grain s%pply"
th%s overcoming the problem of land scarcity. Since <;9s" a team of
agric%lt%ral scientists led by man named =%an >ongping" have been wor#ing
on hybrid rice in ?%nan 3rovince" with the s%pport of government. $hro%gh
years of hard wor#" they have s%ccessf%lly prod%ced a series of2hybrid rice
that have greatly improved yields of rice and increased the prod%ctivity of
the paddy 4eld. ! wo%ld li#e to -%ote the citation on 0r. =%an >ongping@s wor#
by the )olf 5o%ndation of !srael" which awarded 0r. =%an >ongping the
prestigio%s )olf 5o%ndation 3rize in Agric%lt%re in 2991. $he
Apart from showing that innovation can indeed help %s overcome
reso%rces scarcity" we can draw several lessons from this. 5irst of all"
government@s s%pport for research is important" especially for those that of
certain nat%re of p%blic goods. Second" we need -%ali4ed scientists and
engineers" especially those who %nderstand local needs. $hird" we need
team wor# by scientists and engineers. 5o%rth" we need efective mechanism
for #nowledge dif%sion so that invention and innovation can be %sed to
increase prod%ctivity and create wealth.
)e can 4nd many s%ch innovations in China as well as in other co%ntries
that have greatly improved h%man being@s welfare. ?ybrid corn is a classic
and favo%rable e'ample %sed by economists to demonstrate how innovation
can help %s overcome scarcity. 5ish farming is another e'ample. !ntensive
4sh farming has increased China@s a-%atic prod%cts s%pply by 9 times"
freshwater a-%atic prod%cts by 29 times over the last -%arter of a cent%ry.
$his has greatly improved the food str%ct%re of Chinese people
Water Scarcity: Tomorrows !ro"lem
!n order to ma#e any improvements regarding the iss%e of water scarcity
in o%r world today" more than one sol%tion is necessary. Altho%gh water
scarcity is not a s%bstantial problem to every co%ntry c%rrently" many
co%ntries feel the efects of water scarcity and the iss%e m%st be addressed.
!f this iss%e is not dealt with soon" it will become a problem for many other
co%ntries in the near f%t%re" some which are already beginning to feel the
efects. $here are several actions that wo%ld be efective in preserving and
conserving water.
. 7ne possible sol%tion is the %se of desalinization technology. $his
system is described as 4ltering salty water thro%gh membranes and
removing the salt thro%gh electrodialysis and reverse osmosis. $his
proced%re has wor#ed for abo%t +9 nations in Aorth Africa and the
0iddle *ast. )ith this system" these nations are c%rrently prod%cing si'
billion gallons of %sable water a day BArrandale" 2992C. Also" the ,nited
States has a total of abo%t "299 desalinating plants" most of which are
in modest-sized comm%nities. 6ecently" however" the desalinization
process has become m%ch more practical for metropolitan areas and
reverse-osmosis systems have made signi4cant improvements.
2. $he tas# of conserving water can also be con-%ered on a smaller scale"
beginning with small improvements in individ%al homes. 7ne sol%tion
is to develop and mandate more e.cient ho%sehold water heaters. !n
old homes with poor ins%lation" the time needed to heat %p the water
from a fa%cet or showerhead can often be e'tensive. )ith heated pipes
and better ins%lation thro%gho%t the system" this wasted water wo%ld
no longer be an iss%e as hot water wo%ld immediately po%r from the
fa%cet.
+. Another sol%tion to this problem" which tac#les a diferent aspect of
water scarcity" is to compose new m%ltinational treaties to specify
water sharing. $here are c%rrently a signi4cant amo%nt of treaties in
efect regarding water" yet most of them don@t properly distrib%te.
C%rrently" watersheds of 2D ma&or rivers are shared by two or more
co%ntries. $hese overlapping claims provo#e disp%tes" especially in
recent years BEleic#" 299C. $hese new treaties wo%ld wor# towards
eliminating %ne-%al distrib%tion so that areas with plentif%l water
reso%rces wo%ld not be able to hoard them. !nstead" the treaty wo%ld
distrib%te the water according to the aridity and need of the region to
ass%re appropriate allocation. A new m%ltinational treaty wo%ld be
e'ceedingly bene4cial in resolving water disp%tes as well as red%cing
tension and animosity between nations.
3lainly" more than one sol%tion is necessary in order to red%ce or
solve the iss%e of water scarcity that the world faces today. Any action"
whether it may be improving ins%lation of water heating systems within the
home" or composing m%ltinational treaties" is important and m%st be ta#en
into consideration. 7%r world c%rrently faces a dilemma regarding a limited
water s%pply and if the iss%e contin%es to progress witho%t signi4cant
alterations" the conse-%ences will be detrimental.