Faced with limited resources, how do we distribute them?

[HappySqurriel]

Akvod said:

HappySqurriel said:

While there are finite resources, the real problem is that at any point in time we can not utilize these resources efficiently enough to satisfy the wants and needs of everyone. Over time we learn and develop, and the efficiency of our resource utilization increases, and we are better able to satisfy the wants and needs of more people; and previously unimaginable luxuries become in the reach of the typical individual.

At any point in time, resources should be allocated in the way that encourages the greatest advancement in our ability to utilize resources because that will increase the standard of living of everyone by the greatest amount in the long run.

How will you convince people who won't live long enough for the PPF curve to shift outwards? Economic theory in a classroom won't satisfy those who are in absolutely misserable conditions (I'm just playing the Devil's Advocate).

You can't convince people, and you shouldn't try ...

There simply aren't enough resources to allocate to satisfy the wants and needs of everyone; and today people are far better off (mostly in western developed nations) because the people who could best manage resources to increase efficient resource utilization were able to do so because of our economic system. The best example of this is that in my great-grandparents generation poverty meant being unable to satisfy the basic needs of survival while today it means being unable to satisfy the desires for increased luxury in most western developed nations.