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Scarcity: How does cooperation solve problems? | Chapter 3


Published October 3, 2022

Scarcity is an ever-present fact of life, but modern society has been able to produce more than ever. What changed? Instead of relying on theft or violence to get what we need, we have more incentives to cooperate. The global economy relies on different companies, countries, individuals, and organizations all working together to exchange goods and meet needs—even if they don’t know it. How have successful societies made cooperation more rewarding than conflict?

Discussion Thread:

How does protecting property rights lead to the better allocation of resources? 

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For most of human existence, most needs went unmet. And not in the “you don’t have central heating” kind of way—in the “you don’t have wood or coal for a fire so you might freeze to death” way. 

Scarcity was an ever-present reality. Food was scarce. Tools were scarce. Medical supplies were scarce. And even when people had a lucky streak and got what they needed for the moment, those needs didn’t just go away. You can enjoy the most filling meal of your life, but eventually you’re going to be hungry again. 

Never-ending needs and a consistent lack of resources produced terrible consequences. Famines were common. Life expectancies were short. Reaching age 45 was an accomplishment.

Even if one place had a surplus of some resource, the people there might not be able—or even willing—to share or trade with others who needed it. 

And there didn’t seem to be any good solutions, so people relied on bad solutions like violence and theft. The powerful took from the weak. Nations went to war fighting over scarce resources. 

We still deal with scarcity today, but one thing has changed. 

While we haven’t eradicated violence or war, most societies have found a better way to manage scarcity—cooperation. We’re able to meet most of our needs by voluntarily working together rather than pillaging, plundering, or swapping our neighbors’ chickens for pigeons and hoping they don’t notice. 

It’s a miracle.

This cooperation is everywhere, even if you don’t see it. When you put in an hour’s work for your employer, your work helps meet someone’s needs, and you get payment in return. That’s cooperation. 

When you go to the store and purchase a special treadmill for your overweight cat, you and the business owner are cooperating, even if your cat refuses to. 

Cooperation goes beyond direct interactions, too. Workers, inventors, and entrepreneurs across the world work together to deliver goods and services to you and everyone else. 

In many cases, the people cooperating don’t even know each other. They might live in different countries and speak different languages. There could be a long history of fighting between their two countries—or a rivalry between their favorite soccer teams. Yet they unknowingly work together to meet your needs and the needs of billions of others. 

So, what changed over the years? Did humanity just become generally nicer? Did everyone listen to a few uplifting ’80s power ballads, set aside their differences, and start working together? Not quite.

The real answer is more complicated. And maybe less inspirational. Basically, societies slowly adopted laws and rules that made cooperation more rewarding than cheating or stealing. These policies ranged from enacting widespread protection of property rights to creating laws that apply equally to everybody. 

In other words, if someone takes your stuff, or uses it without your permission, they get in trouble. And vice versa. These policies have given people and nations more incentive to peacefully exchange their time, their ideas, and their resources with each other. That’s cooperation.

Life still isn’t perfect. Scarcity is still a reality, and we haven’t joined hands around the world to declare world peace. But, the institutions that make up the modern world have produced a more prosperous and peaceful existence for us all.