Sacred Economics: Chapter 2, “The Illusion of Scarcity”

The following chapter is from Sacred Economics: Money, Gift, and Society in the Age of Transition, available from EVOLVER EDITIONS/North Atlantic Books. Return to the Sacred Economics content page here.

With unabated bounty the land of England blooms and grows; waving with yellow harvests; thick-studded with workshops, industrial implements, with fifteen millions of workers, understood to be the strongest, the cunningest and the willingest our Earth ever had; these men are here; the work they have done, the fruit they have realized is here, abundant, exuberant on every hand of us: and behold, some baleful fiat as of Enchantment has gone forth, saying, “Touch it not, ye workers, ye master-workers, ye master-idlers; none of you can touch it, no man of you shall be the better for it; this is enchanted fruit!” —Thomas Carlyle, Past and Present

It is said that money, or at least the love of it, is the root of all evil. But why should it be? After all, the purpose of money is, at its most basic, simply to facilitate exchange—in other words, to connect human gifts with human needs. What power, what monstrous perversion, has turned money into the opposite: an agent of scarcity?

For indeed we live in a world of fundamental abundance, a world where vast quantities of food, energy, and materials go to waste. Half the world starves while the other half wastes enough to feed the first half. In the Third World and our own ghettos, people lack food, shelter, and other basic necessities and cannot afford to buy them. Meanwhile, we pour vast resources into wars, plastic junk, and innumerable other products that do not serve human happiness. Obviously, poverty is not due to a lack of productive capacity. Nor is it due to a lack of willingness to help: many people would love to feed the poor, to restore nature, and do other meaningful work but cannot because there is no money in it. Money utterly fails to connect gifts and needs. Why?

For years, following conventional opinion, I thought the answer was “greed.” Why do sweatshop factories push wages down to the bare minimum? Greed. Why do people buy gas-guzzling SUVs? Greed. Why do pharmaceutical companies suppress research and sell drugs that they know are dangerous? Greed. Why do tropical fish suppliers dynamite coral reefs? Why do factories pump toxic waste into the rivers? Why do corporate raiders loot employee pension funds? Greed, greed, greed.

Eventually I became uncomfortable with that answer. For one thing, it plays into the same ideology of separation that lies at the root of our civilization’s ills. It is an ideology as old as agriculture’s division of the world into two separate realms: the wild and the domestic, the human and the natural, the wheat and the weed. It says there are two opposing forces in this world, good and evil, and that we can create a better world by eliminating evil. There is something bad in the world and something bad in ourselves, something we must extirpate to make the world safe for goodness.

The war against evil imbues every institution of our society. In agriculture, it appears as the desire to exterminate wolves, to destroy all weeds with glyphosate, to kill all the pests. In medicine it is the war against germs, a constant battle against a hostile world. In religion it is the struggle against sin, or against ego, or against faithlessness or doubt, or against the outward projection of these things: the devil, the infidel. It is the mentality of purifying and purging, of self-improvement and conquest, of rising above nature and transcending desire, of sacrificing oneself in order to be good. Above all, it is the mentality of control.

It says that once final victory over evil is won, we will enter paradise. When we eliminate all the terrorists or create an impenetrable barrier to them, we will be safe. When we develop an irresistible antibiotic and artificial regulation of body processes, we will have perfect health. When we make crime impossible and have a law to govern everything, we will have a perfect society. When you overcome your laziness, your compulsions, your addictions, you will have a perfect life. Until then, you are just going to have to try harder.

In the same vein, the problem in economic life is supposedly greed, both outside ourselves in the form of all those greedy people and within ourselves in the form of our own greedy tendencies. We like to imagine that we ourselves are not so greedy—maybe we have greedy impulses, but we keep them under control. Unlike some people! Some people don’t keep their greed in check. They are lacking in something fundamental that you and I have, some basic decency, basic goodness. They are, in a word, Bad. If they can’t learn to restrain their desires, to make do with less, then we’ll have to force them to.

Clearly, the paradigm of greed is rife with judgment of others, and with self-judgment as well. Our self-righteous anger and hatred of the greedy harbor the secret fear that we are no better than they are. It is the hypocrite who is the most zealous in the persecution of evil. Externalizing the enemy gives expression to unresolved feelings of anger. In a way, this is a necessity: the consequences of keeping them bottled up or directed inward are horrific. But there came a time in my life when I was through hating, through with the war against the self, through with the struggle to be good, and through with the pretense that I was any better than anyone else. I believe humanity, collectively, is nearing such a time as well. Ultimately, greed is a red herring, itself a symptom and not a cause of a deeper problem. To blame greed and to fight it by intensifying the program of self-control is to intensify the war against the self, which is just another expression of the war against nature and the war against the other that lies at the base of the present crisis of civilization.

Greed makes sense in a context of scarcity. Our reigning ideology assumes it: it is built in to our Story of Self. The separate self in a universe governed by hostile or indifferent forces is always at the edge of extinction, and secure only to the extent that it can control these forces. Cast into an objective universe external to ourselves, we must compete with each other for limited resources. Based on the story of the separate self, both biology and economics have therefore written greed into their basic axioms. In biology it is the gene seeking to maximize reproductive self-interest; in economics it is the rational actor seeking to maximize financial self-interest. But what if the assumption of scarcity is false—a projection of our ideology, and not the ultimate reality? If so, then greed is not written into our biology but is a mere symptom of the perception of scarcity.

An indication that greed reflects the perception rather than the reality of scarcity is that rich people tend to be less generous than poor people. In my experience, poor people quite often lend or give each other small sums that, proportionally speaking, would be the equivalent of half a rich person’s net worth. Extensive research backs up this observation. A large 2002 survey by Independent Sector, a nonprofit research organization, found that Americans making less than $25,000 gave 4.2 percent of their income to charity, as opposed to 2.7 percent for people making over $100,000. More recently, Paul Piff, a social psychologist at University of California–Berkeley, found that “lower-income people were more generous, charitable, trusting and helpful to others than were those with more wealth.”(1) Piff found that when research subjects were given money to anonymously distribute between themselves and a partner (who would never know their identity), their generosity correlated inversely to their socioeconomic status. (2)

While it is tempting to conclude from this that greedy people become wealthy, an equally plausible interpretation is that wealth makes people greedy. Why would this be? In a context of abundance greed is silly; only in a context of scarcity is it rational. The wealthy perceive scarcity where there is none. They also worry more than anybody else about money. Could it be that money itself causes the perception of scarcity? Could it be that money, nearly synonymous with security, ironically brings the opposite? The answer to both these questions is yes. On the individual level, rich people have a lot more “invested” in their money and are less able to let go of it. (To let go easily reflects an attitude of abundance.) On the systemic level, as we shall see, scarcity is also built in to money, a direct result of the way it is created and circulated.

The assumption of scarcity is one of the two central axioms of economics. (The second is that people naturally seek to maximize their rational self-interest.) Both are false; or, more precisely, they are true only within a narrow realm, a realm that we, the frog at the bottom of the well, mistake for the whole of reality. As is so often the case, what we take to be objective truth is actually a projection of our own condition onto the “objective” world. So immersed in scarcity are we that we take it to be the nature of reality. But in fact, we live in a world of abundance. The omnipresent scarcity we experience is an artifact: of our money system, of our politics, and of our perceptions.

As we shall see, our money system, system of ownership, and general economic system reflect the same fundamental sense of self that has, built into it, the perception of scarcity. It is the “discrete and separate self,” the Cartesian self: a bubble of psychology marooned in an indifferent universe, seeking to own, to control, to arrogate as much wealth to itself as possible, but foredoomed by its very cutoff from the richness of connected beingness to the experience of never having enough.

The assertion that we live in a world of abundance sometimes provokes an emotional reaction, bordering on hostility, in those of my readers who believe that harmonious human coexistence with the rest of life is impossible without a massive reduction in population. They cite Peak Oil and resource depletion, global warming, the exhaustion of our farmland, and our ecological footprint as evidence that the earth cannot long support industrial civilization at present population levels.

This book offers a response to this concern as part of a vision of a sacred economy. More importantly, it addresses the “how” questions as well—for example, how we will get to there from here. For now I will offer a partial response, a reason for hope.

It is true that human activity is vastly overburdening the earth today. Fossil fuels, aquifers, topsoil, the capacity to absorb pollution, and the ecosystems that maintain the viability of the biosphere are all being depleted at an alarming rate. All the measures on the table are far too little, far too late—a drop in the bucket compared to what is needed.

On the other hand, an enormous proportion of this human activity is either superfluous or deleterious to human happiness. Consider first the armaments industry and the resources consumed in war: some $2 trillion dollars a year, a vast scientific establishment, and the life energy of millions of young people, all to serve no need except one we create ourselves.

Consider the housing industry here in the United States, with the enormous McMansions of the last two decades that again serve no real human need. In some countries a building that size would house fifty people. As it is, the cavernous living rooms go unused, for people feel uncomfortable in their inhuman scale and seek out the comfort of the small den and the breakfast nook. The materials, energy, and maintenance of such monstrosities are a waste of resources. Perhaps even more wasteful is the layout of suburbia, which makes public transportation impossible and necessitates inordinate amounts of driving.

Consider the food industry, which exhibits massive waste at every level. According to a government study, farm-to-retail losses are about 4 percent, retail-to-consumer losses 12 percent, and consumer-level losses 29 percent. (3) Moreover, vast tracts of farmland are devoted to biofuel production, and mechanized agriculture precludes labor-intensive intercropping and other intensive production techniques that could vastly increase productivity. (4)

Such figures suggest the potential plenty available even in a world of seven billion people—but with a caveat: people will spend much more time (per capita) growing food, in a reversal of the trend of the last two centuries. Few realize that organic agriculture can be two to three times more productive than conventional agriculture—per hectare, not per hour of labor. (5) And intensive gardening can be more productive (and more labor-intensive) still. If you like gardening and think that most people would benefit from being closer to the soil, this is good news. With a few hours’ work a week, a typical suburban garden plot of perhaps a thousand square feet can meet most of a family’s vegetable needs; double that and it can provide substantial amounts of staples too, like potatoes, sweet potatoes, and squash. Is the vast transcontinental trucking system that brings California lettuce and carrots to the rest of the country really necessary? Does it enhance life in any way?

Another type of waste comes from the shoddy construction and planned obsolescence of many of our manufactured goods. Presently there are few economic incentives, and some disincentives, to produce goods that last a long time and are easy to fix, with the absurd result that it is often cheaper to buy a new appliance than to repair an old one. This is ultimately a consequence of our money system, and it will be reversed in a sacred economy.

On my street, every family possesses a lawnmower that is used perhaps ten hours per summer. Each kitchen has a blender that is used at most fifteen minutes per week. At any given moment, about half the cars are parked on the street, doing nothing. Most families have their own hedge clippers, their own power tools, their own exercise equipment. Because they are unused most of the time, most of these things are superfluous. Our quality of life would be just as high with half the number of cars, a tenth of the lawnmowers, and two or three Stairmasters for the whole street. In fact, it would be higher since we would have occasion to interact and share.(6) Even at our current, gratuitously high rate of consumption, some 40 percent of the world’s industrial capacity stands idle. That figure could be increased to 80 percent or more without any loss of human happiness. All we would lose would be the pollution and tedium of a lot of factory production. Of course, we would lose a vast number of “jobs” as well, but since these are not contributing much to human well-being anyway, we could employ those people digging holes in the ground and filling them up again with no loss. Or, better, we could devote them to labor-intensive roles like permaculture, care for the sick and elderly, restoration of ecosystems, and all the other needs of today that go tragically unmet for lack of money.

A world without weapons, without McMansions in sprawling suburbs, without mountains of unnecessary packaging, without giant mechanized monofarms, without energy-hogging big-box stores, without electronic billboards, without endless piles of throwaway junk, without the overconsumption of consumer goods no one really needs is not an impoverished world. I disagree with those environmentalists who say we are going to have to make do with less. In fact, we are going to make do with more: more beauty, more community, more fulfillment, more art, more music, and material objects that are fewer in number but superior in utility and aesthetics. The cheap stuff that fills our lives today, however great its quantity, can only cheapen life.

Part of the healing that a sacred economy represents is the healing of the divide we have created between spirit and matter. In keeping with the sacredness of all things, I advocate an embrace, not an eschewing, of materialism. I think we will love our things more and not less. We will treasure our material possessions, honor where they came from and where they will go. If you have a treasured baseball mitt or fishing rod, you may know what I’m talking about. Or perhaps your grandfather had a favorite set of woodworking tools that he kept in perfect condition for fifty years. That is how we will honor our things. Can you imagine what the world would be like if that same care and consideration went into everything we produced? If every engineer put that much love into her creations? Today, such an attitude is uneconomic; it is rarely in anyone’s financial interest to treat a thing as sacred. You can just buy a new baseball mitt or fishing rod, and why be too careful with your tools when new ones are so cheap? The cheapness of our things is part of their devaluation, casting us into a cheap world where everything is generic and expendable.

Amidst superabundance, even we in rich countries live in an omnipresent anxiety, craving “financial security” as we try to keep scarcity at bay. We make choices (even those having nothing to do with money) according to what we can “afford,” and we commonly associate freedom with wealth. But when we pursue it, we find that the paradise of financial freedom is a mirage, receding as we approach it, and that the chase itself enslaves. The anxiety is always there, the scarcity always just one disaster away. We call that chase greed. Truly, it is a response to the perception of scarcity.

Let me offer one more kind of evidence, for now meant to be suggestive rather than conclusive, for the artificiality or illusory nature of the scarcity we experience. Economics, it says on page one of textbooks, is the study of human behavior under conditions of scarcity. The expansion of the economic realm is therefore the expansion of scarcity, its incursion into areas of life once characterized by abundance. Economic behavior, particularly the exchange of money for goods, extends today into realms that were never before the subject of money exchanges. Take, for example, one of the great retail growth categories in the last decade: bottled water. If one thing is abundant on earth to the point of near-ubiquity, it is water, yet today it has become scarce, something we pay for.

Child care has been another area of high economic growth in my lifetime. When I was young, it was nothing for friends and neighbors to watch each other’s kids for a few hours after school, a vestige of village or tribal times when children ran free. My ex-wife Patsy speaks movingly of her childhood in rural Taiwan, where children could and did show up at any neighbor’s house around dinner time to be given a bowl of rice. The community took care of the children. In other words, child care was abundant; it would have been impossible to open an after-school day care center.

For something to become an object of commerce, it must be made scarce first. As the economy grows, by definition, more and more of human activity enters the realm of money, the realm of goods and services. Usually we associate economic growth with an increase in wealth, but we can also see it as an impoverishment, an increase in scarcity. Things we once never dreamed of paying for, we must pay for today. Pay for using what? Using money, of course—money that we struggle and sacrifice to obtain. If one thing is scarce, it is surely money. Most people I know live in constant low-level (sometimes high-level) anxiety for fear of not having enough of it. And as the anxiety of the wealthy confirms, no amount is ever “enough.”

From this perspective, we must be cautious in our indignation at such facts as, “Over two billion people live on less than two dollars a day.” A low cash income could mean that someone’s needs are met outside the money economy, for example through traditional networks of reciprocity and gifts. “Development” in such cases raises incomes by bringing non-monetary economic activity into the realm of goods and services, with the resulting mentality of scarcity, competition, and anxiety so familiar to us in the West, yet so alien to the moneyless hunter-gatherer or subsistence peasant.

Ensuing chapters explain the mechanisms and meaning of the centuries-old conversion of life and the world into money, the progressive commodification of everything. When everything is subject to money, then the scarcity of money makes everything scarce, including the basis of human life and happiness. Such is the life of the slave—one whose actions are compelled by threat to survival.

Perhaps the deepest indication of our slavery is the monetization of time. It is a phenomenon with roots deeper than our money system, for it depends on the prior quantification of time. An animal or a child has “all the time in the world.” The same was apparently true for Stone Age peoples, who usually had very loose concepts of time and rarely were in a hurry. Primitive languages often lacked tenses, and sometimes lacked even words for “yesterday” or “tomorrow.” The comparative nonchalance primitive people had toward time is still apparent today in rural, more traditional parts of the world. Life moves faster in the big city, where we are always in a hurry because time is scarce. But in the past, we experienced time as abundant.

The more monetized society is, the more anxious and hurried its citizens. In parts of the world that are still somewhat outside the money economy, where subsistence farming still exists and where neighbors help each other, the pace of life is slower, less hurried. In rural Mexico, everything is done mañana. A Ladakhi peasant woman interviewed in Helena Norberg-Hodge’s film “Ancient Futures” sums it all up in describing her city-dwelling sister: “She has a rice cooker, a car, a telephone—all kinds of time-saving devices. Yet when I visit her, she is always so busy we barely have time to talk.”

For the animal, child, or hunter-gatherer, time is essentially infinite. Today its monetization has subjected it, like the rest, to scarcity. Time is life. When we experience time as scarce, we experience life as short and poor.

If you were born before adult schedules invaded childhood and children were rushed around from activity to activity, then perhaps you still remember the subjective eternity of childhood, the afternoons that stretched on forever, the timeless freedom of life before the tyranny of calendar and clocks. “Clocks,” writes John Zerzan, “make time scarce and life short.” Once quantified, time too could be bought and sold, and the scarcity of all money-linked commodities afflicted time as well. “Time is money,” the saying goes, an identity confirmed by the metaphor “I can’t afford the time.”

If the material world is fundamentally an abundant world, all the more abundant is the spiritual world: the creations of the human mind—songs, stories, films, ideas, and everything else that goes by the name of intellectual property. Because in the digital age we can replicate and spread them at virtually no cost, artificial scarcity must be imposed upon them in order to keep them in the monetized realm. Industry and the government enforce scarcity through copyrights, patents, and encryption standards, allowing the holders of such property to profit from owning it.

Scarcity, then, is mostly an illusion, a cultural creation. But because we live, almost wholly, in a culturally constructed world, our experience of this scarcity is quite real—real enough that nearly a billion people today are malnourished, and some 5,000 children die each day from hunger-related causes. So our responses to this scarcity—anxiety and greed—are perfectly understandable. When something is abundant, no one hesitates to share it. We live in an abundant world, made otherwise through our perceptions, our culture, and our deep invisible stories. Our perception of scarcity is a self-fulfilling prophecy. Money is central to the construction of the self-reifying illusion of scarcity.

Money, which has turned abundance into scarcity, engenders greed. But not money per se—only the kind of money we use today, money that embodies our cultural sense of self, our unconscious myths, and an adversarial relationship with nature thousands of years in the making. All of these things are changing today. Let us look, then, at how money came to so afflict our minds and ways, so that we might envision how the money system might change with them.

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1. Judith Warner, “The Charitable-Giving Divide,” New York Times. August 20, 2010

2. Piff et al., “Having less, giving more: the influence of social class on prosocial behavior,” J Pers Soc Psychol. 2010 Nov;99(5):pp. 771-84.

3. Buzby et al., “Supermarket Loss Estimates…” Economic Information Bulletin No. (EIB-44) 26 pp, March 2009

4. You can get some idea of the untapped potential of agriculture by reading F. H. King’s fascinating 1911 book, Farmers of Forty Centuries; Or, Permanent Agriculture in China, Korea, and Japan, which explains how these regions sustained enormous populations for millennia on tiny amounts of land, without mechanization, pesticides, or chemical fertilizers. Instead, they relied on sophisticated crop rotation, interplanting, and ecological relationships among farm plants, animals, and people. They wasted nothing, including human manure. Their farming was extremely labor-intensive, although, according to King, it was usually conducted at a leisurely pace. In 1907 Japan’s fifty million people were nearly self-sufficient in food; China’s land supported, in some regions, clans of forty or fifty people on a three-acre farm; in the year 1790 China’s population was about the same as that of the United States today!

5. LaSalle et al., The Organic Green Revolution, p. 4., citing numerous supporting studies. If you have the opposite impression, consider that many of the studies that show no benefit from organic agriculture are conducted by people with little experience with organic farming and on land that is impoverished from decades of chemical farming. Organic methods are not easily amenable to controlled studies because they properly involve a long-term relationship between farmer and land. It is only after years, decades, or even generations that the true benefits of organic agriculture become fully apparent.

6. Unfortunately, many of us are so wounded that we prefer not to interact and share, but to retreat farther into the hell of separation and the illusion of independence until its fabric unravels. As various crises converge and this happens to more and more people, the urge to restore community will grow.


  1. DJC

    “While it is tempting to conclude from this that greedy people become wealthy, an equally plausible interpretation is that wealth makes people greedy”

    We could also look at altruisim in the poor the same way. Poverty encourages altruism because the poor can foresee the need of charity in the future.

    I have been struggling with altruism and self interest for some time and have come to similar conclusions to you. There is much evidence we prefer to give, that giving is evolutionary desirable (see: my article on the evolution of altruism and that we are far more altruistic with gifts than money we have earnt. Howver we and I am still self interested.

    I have decided that we sit in the in-between, the life between selfish and altruistic an our socio-enviroment can push us to polars. We can become more selfish if our security depends upon buying favour, and we can become more altruistic if our survivial relies upon the gifts of others. Neither is good. Making thoughtful decisions without manipulation of sanction from the enviroment of a hierarchy is preferable.

    That said I am making my way through your book and feel it speaks for me… mostly. I will be in touch for there are one or two misconceptions I wish to discuss.

    BTW love the receiver deciding price.


  2. Steve

    Imagine you’re suddenly the last person on earth. Would you stay in your adequate 1500 sq. ft. home, or walk down the street to your former neighbors’ now vacant mansion with the more comfortable furnishings and the indoor pool? Most of us would choose the latter. Not out of any sense of scarcity, but out of our selfish desire for more comfort, more stimulation. Similarly, the obese person doesn’t overeat because of a fear of scarcity, but out of the pleasure of indulging themselves. That is the innate part of our human selves that must be left behind and is not comparable to a war against nature, or a war against the ” other “and their perceived threat to our happiness, because it is a genuine part of us, attempting to exert it’s will.
    That human self is a natural part of us and is a gift from God, but it is no longer needed. It’s role in helping us survive to maturity is now over, replaced by the ability to achieve oneness with God, (another gift) and to surrender our will to His.

  3. Patrick

    I would have to say that I disagree that money is the main problem. I also think that it human nature is a dangerous and over used term in the social sciences (it can be used to justify anything!).

    Human behavior is the problem and is what has created the illusion of scarcity, not money. Human behavior is what needs to change. It goes from the individual level up, and not from the macro level down. This is the fallacy of communism, that a change in society’s structure will solve the majority of society’s problems without any need for change in the underlying individuals that compose this society.

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