Rival vs Non Rival Goods

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Abundance and Scarcity, a lecture by Herman Daly which sets out clearly the problematic of scarcity vs. abundance, which is key to economic governance.

Published by http://www.smallisbeautiful.org

"Sustaining Our Commonwealth of Nature and Knowledge." Talk by Herman Daly

"A commonwealth is a resource created either by nature, or by aggregate human effort. Natural resources would fall into the first category; knowledge belongs to the second. Sustaining our commonwealths means using with maintenance. We must realize what the maximum amount of a resource we can consume while still maintaining our commonwealths. .....The problem in the current economy is that nature is treated as a non-scarce resource when it is in fact scarce. Knowledge has the opposite problem, it is treated as scarce when it is in fact non-scarce.

In economics, goods are either rival or non-rival, and excludable or non-excludable.

A rival good is one where if I consume it, that prevents you from consuming it. Clothing, for example, is rival. Sunlight is non-rival since my consumption of it doesn't prevent you from enjoying it.

Rivalness is a physical property. Excludability is a legal concept. Excludable goods can be made private property, such as a private residence. Non-excludable goods are those not privatized.

  1. Rival, excludable goods are the ones the market was made for .....market goods.
  2. Non-rival, non-excludable goods are public goods.
  3. Rival, non-excludable goods give way to the tragedy of the commons. These goods, fishing rights or clean air, are rival, yet because there is no way of making these excludable, each party will try to consume them before another party exhausts the resource, leading to competitive depletion instead of cooperative conservation, which would be in the best interest of all parties.
  4. Non-rival, excludable goods, such as knowledge, result in the tragedy of artificial scarcity.

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