Question

State the reasons for which Bowers(1977) rejected the ' scarcity hypothesis'?.​

Answer 1

Scarcity Hypothesis or Theory of Economics is pioneered by Prof. Lionel Robbins and is based on the notion that human behavior is an outcome of the interaction between ends and scarce means which have alternative values.

Explanation:

Criticism or rejection of Scarcity Hypothesis:-

• It has been argued that the scarcity concept or definition of Economics is static or too much focused only on the present generation.It does not consider how future generations in our society will tackle the problem of scarcity and utilize scarce resources according to their alternative uses.
• The scarcity theory also allegedly ignores the supply side of the economy and emphasizes excessively on consumer choice and behavior.Economic problems can also perhaps arise due to any imperfections in the production or supply related deficiencies.
• In rich countries, scarcity concept might not be applicable as the rich countries already have abundance of resources and do not face the problem of scarcity as much as the poor countries.
• This definition or concept is also not commensurate with socialist economies as in such economic structure, the state or the government assumes the responsibility of distributing the resources to all the citizens equitably and equally and therefore, majority don't suffer from insufficiency.