Old economics: Sharing resources

By Daniel Archibald | CFA

The economic problem is the same today as it has always been: How do we best divide up society's wealth? This is particularly important to resolve owing to the constraint of scarcity, which needs to be balanced with the needs and wants of society's members.

An ancient tale of economics can be found in the story by Aesop, which he reproduced over 2500 years ago in Greece. In this fable of an ant and a grasshopper, we learn of the importance of saving for a rainy day. The moral being that we need to prepare for the future and, in particular, prepare for a time of winter wherein resources may be impossible to come by. Similar stories can be found in other ancient texts, including the biblical story of Joseph in Egypt and the 7 years of plenty/famine. In some of these stories we see how preparing for the future during times of abundance can help us to share our resources in times of scarcity (unlike the ant, who perhaps acted with either indifference or prudence).

Contrast this with indigenous Australian lore. Among key principles that have been past down throughout millenia of generations lies a key economic principle. This might be best paraphrased as "only take what you need; leave the rest for those that might follow" and speaks to the idea that the hoarding of resources can harm our and others' futures. Perhaps this is a principle that acknowledges the availability of resources in a vast continent that suffers little from harsh winters (i.e. lack of scarcity), but might also speak to a critical understanding of how to sustainably manage natural resources. Hoarding of resources, in particular, can lead to waste and 'over-mining' of limited resources, and focusing on waste reduction and considerate sharing of resources might be a good recipe for a stable and sustainable economy. 

Now, at present, around 10% of the world faces some form of hunger and starvation. At the moment, however, humans throw out roughly 1/3 of all food produced. So this current economic problem is not really one of scarcity, but is one of waste management. Avoiding throwing out food might also become more critical with global supply chains being stretched and conflict in Ukraine reducing production of key grains.

In the future, there may come a time when scarcity is no longer of concern (i.e. the promise of technologies such as nuclear fusion, Star Trek economy, etc). And lessons learnt from our ancient past (e.g. virtues of planning and sharing) might serve as a guide for how to navigate such a post-scarcity world.