Scarcity vs. abundance
Abundance “Supply and demand” is a common market relationship which expresses, in part, how the value of a resource or good is proportional to how much of it is in existence or accessible. For example, diamonds are considered quantitatively more rare and hence of higher value than water, which can be found in a general abundance on the planet. Likewise, certain human creations, if created in short supply, are also subject to this dynamic, even if the perception of rarity is culturally subjective, such as with a single canvas painting by a renowned artist which might fetch many, many times its actual resource value in a sale.
From the standpoint of market efficiency, general scarcity is a good thing overall. While extreme scarcity is, indeed, destabilizing both for an industry or an economy as a whole (“shortages”), the most optimized state within which the market system can exist is in a sort of balanced scarcity pressure, hence the assurance of sales-producing demand. Again, the life requirements of humans are not recognized in this equation.
Meeting human needs in the form of food, housing, low-stress circumstances for mental health, etc., is utterly “external” here and has no direct relationship to market efficiency. Meeting human needs in a direct sense would, again, be inefficient to the market's logic as it would remove the scarcity pressure that fuels cyclical consumption. Put another way, there is a need for imbalance in order to fuel this demand pressure and this imbalance can come in many forms. Debt, for example, is a form of imposed scarcity which puts a person in a position to which they must often submit to labor which may be of a more “exploitative” nature – meaning the reward (usually the wage) is grossly disproportionate to what is needed to keep a healthy standard of living in one's circumstance. In this respect, the debt system facilitates a distinct form of market efficiency as it benefits the employer since the ease of lowering wage rates (cost efficiency) naturally increases as private debt levels increase. The more in debt people are, the more likely they will submit to low wage labor and hence generate more profit for the business owners. In fact, the same logic can be applied to the use of legally unregulated “sweatshop” labor in the third world, which is frequently “exploited” by Western companies. Excessive work hours coupled with notoriously low wages are common - yet these people have literally no choice but to submit as there are no other options for survival in their region, often due to debt resulting from austerity measures.
In fact, the regulation of the money supply in total is based on a general scarcity since, as noted before, all money today is made out of debt and this debt-money is sold into the market as a commodity through “loans”, with the mark-up of interest attached to generate a profit for the banks. Yet, this “interest” profit, which is money itself, is not created in the money supply itself. For instance, if an individual takes out a loan for 100 dollars and pays 5% interest on the loan, that individual is required to pay back 105 dollars. But, in an economy where all money comes into existence through loans, which is the reality, only the “principal” ($100) exists in the money supply with the “interest income” ($5) uncreated. Therefore, there is always more debt in existence than there is money to pay for it. Furthermore, since the poor are responsible for taking more loans in general for their home/cars/etc. than the wealthy, who maintain a financial surplus, this overall debt pressure tends to fall on the lower classes, compounding the inherently insurmountable problem of being in debt and hence with limited options. In this model, bankruptcy, for example, is not a result of some poor business judgments - it is an inevitable consequence - like a game of “musical chairs”.
Capitalism breeds scarcity
So, coming back to the central point, the reality of scarcity in the current economic system is a source of great efficiency in the market sense for if people had their basic needs met, or if they were able to meet those needs without the external pressure of irresolvable debt which keeps the imbalances - cyclical consumption, profit and growth would suffer. As insidious as it may seem to our intuition and humanity, that keeping people deprived is actually a positive precondition for the workings of the market, this is the reality. Needless to say, from the standpoint of technical efficiency, seeing the human being as a bio-chemical machine in universal need of basic nutrition, stability and other psychosocial requirements which, if unattained, can result in sickness both physical and psychological, we can recognize the decoupled state of human/social well-being with this “market logic”. As a final point on this issue, the market seeks the servicing of problems at all times. In fact, it could be stated generally that technical inefficiency is the driver of market efficiency. Problem resolution is not sought by the market as it then creates an income void and hence a loss of monetary gain and movement. The result of this, in part, is a perverse reinforcement of incentive to seek or even advance problems in general. A century ago the idea of selling bottled water would have been strange given its general, unpolluted abundance. In the modern day, it is a multimillion-dollar industry annually, derived mostly from the water pollution that has occurred due to irresponsible industrial practices. The profit and jobs now associated with this technically inefficient reality of resource pollution and destruction, has improved, once again, the economic market efficiency needed to keep cyclical consumption going.
Market efficiency, generally speaking, takes on a “macro” and “micro” reality. On the macro scale, anything that can increase sales, growth or consumption, regardless of the originating pressure for demand or what is actually being bought and sold, is deemed efficient in this context. On the micro scale, this efficiency takes the form of enabling conditions that can increase profit and reduce input costs (“cost efficiency”) on the part of business. This “efficiency” inherent to capitalism operates without any respect for the social or environmental costs of its process to keep cyclical consumption and profit going and the world you see around you - full of ecological disorder, human deprivation and general social and environmental instability - has been the result. On the other hand, technical efficiency, which one could characterize as, in fact, a hindrance to market efficiency, seeks to maintain the environment, maintain human health and essentially keep balance in the natural world. The reduction of waste, resolution of problems and the maintaining of alignment with natural law is the common sense logic embodied.
It is unfortunate to realize that today we have two opposed systems of economy working at once – working against each other, in fact. The market system, embodying its archaic, traditionalized logic, is utterly out of sync with the natural (technical) economy as it exists. The result is vast discord and imbalance with ever-mutating problems and consequences for the human species. It is clear which system will “win” in this battle. Nature will persist with its natural rules regardless of how much we theorize this or that validation of the way we have traditionally organized ourselves on this planet. Nature doesn’t care about our vast monetary economic ideas, its theories of “value”, sophisticated financial models or detailed equations regarding how we think human behavior manifests and why. The technical reality is simple: learn, adapt and align to the governing laws of nature, or suffer the consequences. It is absurd to think that the human species, given its evolution within the same natural laws to which our economic practice (and values) must align, would be incompatible with such laws. It is merely an issue of maturity and awareness today.
As a final point, as well as a general aside, there has emerged a trend in the 21st century, in the wake of all the growing and persisting ecological problems that claims to seek what is called a “green economy”. Some have even divided this economic view into sectors, including applications for renewable energy, eco-buildings, clean transportation and other categories of focus. It will be noticed that all of those awarenesses and sought applications are generally in line with the technical or scientific awareness perspective discussed in this essay. Sadly, as positive as the intent of these new organizations and business planners may be, the inefficiency inherent to the capitalist model of economics - with all its need for certain forms of contrived “efficiency” to maintain itself - immediately pollutes and deeply limits all such attempts, which explains why such technical efficiency approaches have still yet to really be applied. The sad reality is that while some improvement can be made, such progress will be inherently limited to an ever-increasing degree since, as described, the very structural basis of the way market capitalism works is actively opposed to the efficiencies inherent in the natural law view. The only logical solution is to rethink the entire structure if any real efficiency, elevated prosperity and problem resolution is to be achieved in the long run.