Armen Alchian and the Scarcity of Resources

Found in: Universal Economics

Professor Alchian, in this quote, makes implicit reference to Lionel Robbins’ canonical definition of economics as. “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

Economics

Since the discouraging fiasco in the Garden of Eden, all the world has been a place conspicuous in its scarcity of resources, contributing heavily to an abundance of various sorrows and sins. People have had to adjust and adapt to limitations of what is available to satisfy unlimited desires. Some individuals and societies have been much more successful than others in thus making do. (FROM: PART ONE: DEMAND, EXCHANGE, AND PROPERTY RIGHTS, CHAPTER 1: WELCOME TO ECONOMICS)

Thoughts

The reference is made in order to state that the performance of both individuals and societies in achieving their economic goals has been unequal. With that, Professor Alchian sets the stage to discuss the role played by institutions in general, and private property rights in particular, in allowing some individuals - in societies where those institutions are in place - to more efficiently perform their economic activities. For Professor Alchian, institutional arrangements are more conducive to the efficient use of scarce resources by supporting the practice of voluntary exchanges to a greater extent than in societies in which private property rights are not so clearly defined and upheld.

2

Titles by Armen A. Alchian

View all Titles