Conquering scarcity: Institutions, learning and creativity in the history of economic ideas

1. Introduction: resource scarcity and institutional dynamics The relationship between scarcity of resources and the institutional set up of any given economic system is a complex one. For it could be argued that, in certain cases, scarcity itself is relative not only to the structure of human needs but also to the way in which institutional relationships determine the quantity and utilization patterns of the resources available at any given time and across time. The purpose of this chapter is to highlight the relationship between scarcity and creativity in the history of economic thought, and to explore the manifold routes that have been proposed in order to ‘conquer scarcity’ through institutional change. The chapter starts by setting the ground of the analysis by examining the intellectual setting of the Enlightenment and its manifold approach to the relationship between scarcity and institutional change. Against this background, the chapter examines the Italian ‘civil economy’ tradition by emphasizing its contribution to the foregrounding of institutional dynamics as a major trigger of human creativity, and therefore as a major condition favouring the overcoming of resource scarcity in human societies. The implications of this case study in the history of economic thought are further explored by investigating the influence of the ‘civil economy’ tradition upon the recent reappraisal of classical political economy and by calling attention to the distinction between its Smithian and Ricardian strands. A section of concluding remarks brings the chapter to a close. 2. Sketching the European context A necessary preliminary to the analysis of the relationship between creativity and scarcity in economic thinking is an overall image of the European context concerning the economic studies through the modern age. In a bird's eye view we shall try to outline a few specific characteristics that appear to be of special significance in highlighting the rise and the influence of the Italian school. Through the modern age the main issue across the board of the economic discipline and of economic analysis (in Schumpeter's sense of the word) is the focus on wealth.