After going over the course syllabus in an introductory economics course, one of the first things an instructor will discuss is scarcity, that there are not enough resources to satisfy all of the wants for that resource. While it is easy to see that there are not enough cancer doctors or not enough petroleum or not enough diamonds for all of our wants, it seems that there are some things that do not seem to be scarce, that there is plenty of it. For instance, think of something like sand. One look at the vast quantities of sand in the Saharan desert, and one gets the idea that there is plenty sand.
Yet sand is often scarce. For instance, I had a few holes develop around some storm drains. After stepping in one, I decided to put an end to them. I went to Lowe’s and got some gravel and sand. Lowe’s made me pay for the sand. I was willing to pay for the sand because it was scarce, at least in my yard. If I had all that I wanted and could get it without going to the Fourchon Beach or to the Sahara, I would. I can’t, though.
If that does not convince you that sand is scarce, read this article in the Washington Times by Cheryl Chumley about how beaches in Florida are running out of sand. With the outer edge of the continental shelves not far from the Florida shores, beach sand is being washed out and off the edge of these shelves. Dredging for sand just is not going to provide them with enough sand. They are looking at a different substance, glass, which, of course, is made from sand in the first place, to replace sand on their beaches. Yes, even sand is scarce.
One lesson to be learned here is that anything someone will pay for is scarce. Market prices are good indicators of scarcity and good measures of scarcity. However, even if there is no market for some things, that does not mean that scarcity is absent and we have plenty. As we see in the case of public goods, we might have a scarce good or resource, even though there is no market for that good. This is the case where people will not pay for something when they can free ride for that good.