"Waste"
So. We've been talking about agents (consumers, nations) making choices from sets of possibilities, in order to achieve some aim. And we've talked about those possibility sets being derived from some kind of currently-fixed budget of funds or time, or from current productive capacity.
It is only in this context that we can talk about waste-- the context of resources used (or not used) to achieve a goal.
Where the same goal could be achieved using unambiguously lesser amounts of resources, there has been waste with respect to that goal.
Where resources that could have been expended to achieve a goal are left unused, there has been waste with respect to that goal.
The terms "waste" and "wasteful" get used without definition a lot, and the economics-savvy reader should question them immediately.
Economists typically assume that the consumption or availability of more goods and services is part of human goals*.
If we think of a consumer's budget set as the possibility set, we can interpret consumption that costs less than the total budget as saving toward future consumption.
If we think of a nation's productive capacity, its ability to produce all sorts of goods and services with its capital stock (plant and equipment), labor force, and institutional frameworks, producing inside the boundary of possibility means unemployed resources.
Nothing is being saved. Productivity has been squandered in that period, and it is gone forever.
This does not serve any goal related to the production of goods and services.
* This is clearly not true for every individual. In a hungry world, though, it's a pretty good assumption for human populations in general.
FB posts incorporated:
Defining waste
Unemployment as waste
It is only in this context that we can talk about waste-- the context of resources used (or not used) to achieve a goal.
Where the same goal could be achieved using unambiguously lesser amounts of resources, there has been waste with respect to that goal.
Where resources that could have been expended to achieve a goal are left unused, there has been waste with respect to that goal.
The terms "waste" and "wasteful" get used without definition a lot, and the economics-savvy reader should question them immediately.
Economists typically assume that the consumption or availability of more goods and services is part of human goals*.
If we think of a consumer's budget set as the possibility set, we can interpret consumption that costs less than the total budget as saving toward future consumption.
If we think of a nation's productive capacity, its ability to produce all sorts of goods and services with its capital stock (plant and equipment), labor force, and institutional frameworks, producing inside the boundary of possibility means unemployed resources.
Nothing is being saved. Productivity has been squandered in that period, and it is gone forever.
This does not serve any goal related to the production of goods and services.
* This is clearly not true for every individual. In a hungry world, though, it's a pretty good assumption for human populations in general.
FB posts incorporated:
Defining waste
Unemployment as waste