eHappyLife
eHappyLife
Happy Living
Popular Podcasts
2,905,691
Total Podcast Downloads
Through February 28, 2014
Member Area
  Member Login  
 
Email:
Password:
 
Scarcity
And Value

Written Sunday 09/11/05 by Joe Rossini

Scarcity and its relationship to value is a topic that can be discussed endlessly. It’s a relationship that we all know exists in our subconscious, yet it sometimes takes a catastrophic event like Hurricane Katrina to fully realize this critical relationship in our consciousness. For example, we all know that clean drinking water is essential to living, however under normal circumstances we might place a low value on this precious resource as long as we have ready access to as much as we want in our kitchens and refrigerators. It’s only when it became scarce and unavailable after Hurricane Katrina hit the Southern Gulf Coast of the United States, that the residents in that region would pay any price for bottled water, to sustain their life.

A similar argument can be made for electricity, gasoline, food, medicines and many basic necessities or services that immediately became scarce after the storm. As long as there is ample supply of these necessities, we tend to take these items for granted as though they will always be available. In the case of electricity, we all know this commodity is important for comfort as well as powering necessary appliances like refrigerators. We also realize that this commodity must be commercially produced and there isn’t a free and endless supply for each of us to tap at will. Thus, as demand continues to grow for this commodity and supplies become tighter, the result is scarcity and the value goes up. In normal times, each time we lower our air conditioning thermostats and keep them low when it’s not absolutely necessary; or each time we cool an empty house for extended periods of time without regard to waste…we are in-fact making electricity scarcer as well as more expensive to purchase.

To drive this point home, recently I came across my check register for my personal checking account in 1972. At that time I was renting an apartment and my electric bills back then were around $5.00 a month during the summer. That’s a far cry from the hundreds I now pay for the same electricity and I felt as though our prices were too high today. Of course, we live in much more comfort today and have more TV’s, electrical appliances and computers. The increases were gradual over this 33 year period, electricity was always plentiful and I never paid much attention. However, just like in 1972, we still take electric power for granted today and think that it will always be readily available. Only when electricity is taken away following a hurricane, can we appreciate its true value. After watching people with no power on TV, I would gladly pay whatever was necessary to continue my electric service and not complain about its cost. That’s how scarcity adds value.

Scarcity is also a great teacher, as all of us are experiencing lines right now to fill up at the gas pumps due to scarce supplies of gasoline. We are also paying the highest prices in memory. This combination of scarcity and high prices is forcing us to value gasoline more. All of a sudden everyone has ceased joyriding or taking unnecessary trips to the store. We’ve become more conscious of the miles per gallon that our vehicles yield. And we are making driving decisions based on a scarce mindset rather than one of plentiful supply.

Now of course none of this explanation of scarcity and value is anything new. Perhaps Adam Smith, an 18th Century Scottish author of “The Wealth of Nations” best described scarcity and value in his works. He sites many examples of scarcity’s relationship to value including land, precious metals, gems and labor. In fact one might say that our whole capitalist system of economics revolves around these basic concepts. Yet it takes an event like Hurricane Katrina to give everyone an opportunity for a reality check, revealing how fragile and vulnerable our lives are to disruptions. This one event can change the course of millions of lives forever.

We should mention that scarcity does not necessarily imply poverty. Scarcity in economic terms means that the needs and wants exceed the resources that are available to meet them. The scarcity of an original sculpture or painting can make it worth millions of dollars. However, if someone produces millions of the same piece of art, and it’s readily available at every discount department store, it may be worth fifteen dollars.

One lesson to be learned from this week’s discussion on scarcity and value should be how it relates to labor, pay and job availability. Even Adam Smith argued that wage rates would be higher for trades that were more difficult to learn, because people would not be willing to learn them if they were not compensated by a higher wage. Now might be a good time to ask yourself “how scarce are my skills?” Or “how much time am I investing to improve the value of my skills?” These are critical questions to ask continually. In a time of crisis and displacement from your home or job, those with skills that are scarce and valuable, will have more choices for employment.


Listen to this Article on Podcast.......

Email a friend......E-Mail This Article To A Friend Printer Friendly Version......Print This Article
Copyright ©2001-2013 eHappyLife, LLC - All Rights Reserved
Articles may not be published without the consent of the Author


Learning Life's Lessons Master Archives
Introduction
The Real Deal Relationships | Parents Should Be Special | Children Learn By Example
Make Time For Your Kids | Don't Wait To Share | Peers and Friends Come and Go
What Can Teams Teach Us? | Who's Telling The Truth?
Should You Fight To Be Right? | Exceeding Job Expectations
Relationships with Stats and Numbers | Using Personal Computers
The Road To Improvement | Doing The Do-able | Moving The Move-able
Doing What You Say | The Greatest Generation | You Can Count On Me
Take More Pride In 2005 | Financial Independence Anyone? | I Just Didn’t Have Time!
Avoid Assuming Anything! | Never Take Anything For Granted!
The Power Of Fan Loyalty! | Dangers of Resisting Change! | Life's Peaks And Valleys
The Process Of Reinvention | Wisdom | Intuition and Instincts | A Little Bit At A Time
Why Speed Counts | The 80-20 Principle | Showing Your Appreciation
Think, Focus, And Finish | Learning From Others | The True Value Of Time
A Mother's Day Tribute | Writing Helps To Learn And Share | Are You Really Listening?
Memorial Day Tribute | Changing Is Difficult | Bubbles, Balance & Boredom!
A Perspective On Fatherhood | Why Courtesy Counts? | 1776 And Independence Day
Tools In The Right Hands | Boomers And Retirement | Playing The Games Of Life
How Tech Savvy Are You? | Rhythm And Momentum | Consistency Counts!
The Power Of Saying THANK YOU! | Fix Small Problems Quickly!
A Tribute To Labor Day | Scarcity And Value | College Footbal Lessons
The Most Important Clients | Develop A Solutions Mindset
Lifelong Learning Is Essential | A Game Of Mistakes | Respecting Rules And Laws
The Concept Of Systems | Strive To Make Others Happy | Hire Slow, And Fire Fast
A Lesson About Loyalty | Following-Up Reaps Rewards | Worry Less And Enjoy More
Live Today And Plan For Tomorrow | Something For Nothing review
Some Opinions On Advice | Resolutions Of Health & Peace
Where Dishonesty Can Lead Us | Living Each Day With Purpose | The Work Ethic
Avoiding Misinterpretations | Super Bowl And Our Culture
Start a Lifetime Word Course | Silence Is Golden Rules | A Perspective On Timelines
Invest In What You Know | Setting Priorities Is A Skill | The Power Of Prevention
Finding Relevance When You Retire | Benefit From Daylight Savings
Strive For What You Become | Choosing Price Or Quality | Understanding Your Inflation
Pursuing A Brighter Future | Creating Value And Wealth | The Ultimate Professional
Always Do Your Best | Choose Your Friends Wisely | Thoughts For The Class Of 2006
The Long Road To Showtime | In Memory Of James Rossini
Benefits Of Being A Contrarian | Innovate And Specialize Now!
Invest Your Energy Wisely! | A Hundred Weeks & Counting!
Developing A Sense Of Urgency | Does Fidelity Really Matter?
Does Brand Loyalty Still Matter? | A Perspective On Free Time
The Reality Of Competition | Why The Best Seek Education
Spend And Borrow Money Wisely | Want Your Clients To Love You?
Brainstorming Really Works | Losing Your Best Furry Friend
Be A Student Of Your Body | Drive Safe To Stay Alive | The Relevance Of Polls
The Power Of Paying Promtly | Learning Quickly From Mentors
Singing Happy Birthday Is Powerful | Always Respect Your Competitors
Gambling Is A Bad Bet | Develop An Investment Mindset
Till Respect Do Us Part | Navigating Through Holiday Shopping
Always Field Your Best Team | The Language Of Love
Forget The Ugly Past And Move On | You Are What You Think
The Internet Has Changed Our Lives | Dot The i's And Cross The t's
Service Is Not A Favor | Success + Overwhelm Equals Complacency
Why Real Deal Relationships Expire | The Ugly Costs of Misunderstandings
Taking Giant Steps And Leaps Of Faith | Searching For A Happy Life
Why Can't The Honeymoon Last? | Creating More Serenity Now
Who's Responsible For Irresponsibility? | How To Destroy Team Morale
The Gifts My Parents Gave Me | Turning Dreams And Visions Into Reality
Keep Clean, Organized Surroundings | Return Communications Like A Pro
Start Saving As Early As Possible | In Memory Of Rose Rossini
Bouncing Back From Adversity | The Early Bird Catches The Worm
How’s Your Name Brand Doing? | My One And Only Lesson On Politics
It’s Father’s Day Once Again | A Trifecta Of Benefits
Mirrors Can Bring Pain Or Pleasure | Gadgets To Improve Your Attitude
Selling Your Conscience For A Buck | Dealing With Daily Obstacles
What Really Matters In Your Life? | What Really Matters In Your Life?
A Perfect Financial Storm Coming? | Avoid Distraction Overload
Turning Passion Into Profit | Disruptive Change Will Rule The Future
Buy Tools Before You Need Them | Pessimism Or Optimism? Your Choice!
Avoid Playing The Blame Game | The Development Of Instincts
Keep It Simple, Efficient & Consistent | Understanding The Workaholic Syndrome
Relationships Are What We Live For | We May Need A Push To Get Started
The Power Of A Positive Attitude | The Emotion Of Disgust
For Boomers And Caring Citizens | The Importance Of Focusing
Always Keep Your Promises | The Power Of Energy
The Power Of Persistence | Remove The Shackles Of Indifference
Become The CEO Of Your Life | A Thirst For Knowledge in 2008
Enjoy Being More Decisive | What Happened To Accountability?
Make Health A Top Priority In 2008 | Less Talk, More Action!
Understanding Team Dynamics | Excuses Benefit No One
Life Is A Balancing Act | Is Happiness Eluding You?
How Do You Define Success? | Time Is Money
The Necessity Of Flexibility | We Are All Salespeople
Being Accountable To Yourself | Dealing With Disappointment
Why Excess Adjusts The Marketplace | Recognizing Value And Importance
Don’t Let Worry Drain Your Energy | That's Life!
Build Self Esteem Every Day | Avoid The School Of Hard Knocks
Praise More And Criticize Less | How To Increase Your Business Value
Why You Should Serve Customers Better | Don't Let Small Doubts Stop You!
Numbers, Stats And Market Forces | Always Strive For Excellence
Discipline Is Necessary For Progress | Why Service Can Really Stink
Reduce The Friction In Your Business | Avoid Being Indecisive
Everything You Do In Life Counts! | Time Is Our Most Precious Asset
High Energy Leadership | Anticipating And Preparing For Change
You Are Responsible For Your Choices | Resolve Means "I WILL"
Leading And Learning Communication Skills | Be A Member Of The 5% Club
Leading With An Unshakable Character | Defining Wealth And Value
Who Can You Really Trust? | The Rewards Of Growth
A Two Step Cure For Procrastination | Desire Is A Powerful Emotion
What Makes Customers Buy? | You Must Provide Value To Compete
Honest Self Appraisal | The Fear Of Failure | Take A Deep Breath
Are You A Master Or Victim Of Change? | Act Like A Fiduciary To Restore Trust
Which Will It Be: Inflation Or Deflation? | The Right Selling Price
Why People Don't Set Goals | Take Control Of Your Time
How To Invest Better Using Google


To view Polls by Questions Click Here

To view Polls by Topic Click Here

To view Personal Articles Index Click Here

eHappyLife
For Home Inspections in SW Florida please call my trusted friend Jeff Gerwitz
239-994-1694
United Inspection Services
Today's Featured Lesson is: Doing What You Say
232 Lessons Presented
Click below to listen to The Process of Reinvention

Build Your Vocabulary
Download our FREE iPhone & Android APP Now!