David Ricardo:The Scarcity Principle

From past to present, from the beginning to the end of the 18th century and 19th century, perspectives of economic and social transformations are objectively impressive. From the witness's perspective,, we need to understand that it is traumatic too. In fact, The vast majority of the observers of the time were relatively pessimistic about the sharing of wealth and the long-term evolution of the social structure. This situation, no doubt the most impressive two economists of the 19th century and of a small social group - According to Ricardo they're landowners, According to Marx they're industrial capitalists- to be valid for Ricardo and Marx who foresee that production and income will inevitably take on a growing share.

            In 1817 On the Principles of Political Economy and Taxation; be referred to as ''principles'', The real problem of Ricardo, who published his work, it was the price of soil and the rent of soil changed in long run. There was no statistical source that he could use his hand. However, it didn't prevent him from recognizing Capitalism closely during his lifetime. He grew up in a Portuguese, Jewish family. It seems like he hasn't got any political prejudice. He had been affected by Malthus's model but he developed it. Mostly he was interested in that logical contradiction: When production and population began to increase, the soil was getting much more scarce compared to other commodities. The law of supply and demand indicates that land prices and rents paid to landowners would increase regularly. Over time, the share of landowners in national income will gradually decrease, which will distort the social balance. According to Ricardo, there was only one solution, the taxes on soil rents were to be increased regularly.

             We will see that this wasn't right: The soil has been at high levels for a long time, however as the weight of agriculture in the national income continues to decrease, the values of the soil field, compared to other forms of wealth, has fallen terribly. Ricardo wrote in 1810, It was certainly not possible to predict the technical progress and industrial growth that would be of great importance for the rest of the century. Ricardo couldn't imagine a world in which humanity completely gets rid of the pressure on food and agriculture.

           The forecast of the price of soil was still interesting: '' The Scarcity Theory  '', That is mean it has the potential for too much growth of certain prices over a long time. This could have distorted the entire balance of society. A system of price, like organising millions of individuals' activities, has an important role. The problem is, that this system is not provided either a limit or a morality.

          We will make a big mistake if we ignore the importance of this theory while analyzing the global sharing of wealth in the 21st century. Instead of farmland in Ricardo's model, real estate prices in major capitals or putting oil prices, it is enough to convince us. In both cases, the observed trend from the 1970-2010 period or when we look at how the extension of 2010-2100 can be shaped, in the countries themselves and international, Ricardo's model evocation of disaster, significant economic, social and political imbalances, that we can see obviously.

           Actually, in the economy, there is a fairly simple mechanism that this process can balance: The mechanism of Supply and Demand. If a supply of goods is insufficient and if the price is too high, the demand for these goods will decrease, which will cause to make prices down. In other words, if the real estates and oil prices increase,  to make it up for this situation, we should ride a bike or live in a small town, it will suffice. But it can not only be difficult but it can take decades to build such a scheme, during which time real estate and petrol owners will have a very large credit accumulation relative to the rest of the population and they will be able to buy anything that can be bought, including rural areas and bicycles they may have bought it. As usual, we can't think that it will exactly happen.

         But for now,The Mechanism of Supply and Demand, in connection with major changes in certain relative prices, is enough to say that inequality in the distribution of wealth cannot be eliminated from being large-scale and permanent. It is the main point of Ricardo's Scarcity Principle.