Class #32 "Scarcity / Systems" (11/16/2011)

Scarcity is an axiom, it happens no matter what. Thus rationing of some form has to exist no matter what. And thus competition exists no matter what. The economic system in place has no effect on these statements. The question is which system of rationing is the most constructive and efficient at rationing. 

Short list of potential ways to ration (excluding the price system):

- Need              - Equal Shares                  -Queues

-Kickin' Ass      - Lottery                           - Merit ("beauty" "effort" "smarts")

Analyzing the effectiveness of systems, ask these questions:

1) Will the system channel competition constructively or destructively?

2) Does the system create a mechanism to call forth more supply?

All of these above possibilities fail in some form to these two question

Rizzo

-Daniel Gaona