Alocacion Eficiente De Recursos

Efficient Resource Allocation: The Paradox

“The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” Thomas Sowell
Nowadays economics is a hot topic. As the world becomes more globalized, the economy as a whole increases in complexity. Everyone is giving theiropinions on where is the global economy headed, who is the biggest and fastest growing economy, distribution of resources, among and endless list of matters and topics. The allocation of resources is increasingly important as resources are not as abundant as they used to be, and the world population keeps increasing, therefor, increased competition for these resources.
According to the websiteEconguru, a resource is “The labor, capital, land, and entrepreneurship used by society to produce consumer satisfying goods and services.” Resources can be physical, such as: land, minerals, water and many others that are tangible. They can also be intellectual, in this case, human capital. As we know some of the most precious resources take millions of years to regenerate, and we are increasinglyrequiring exponentially greater quantities of them. As an example we can use petroleum, the demand for petroleum increases, while the supply is decreasing year after year. As resources are becoming scarcer the allocation of resources increases in importance and greatly affects all players in the economy.
According to the CFA Institute, a highly regarded investment professional association, thereare several ways resources can be allocated: market price, command, majority rule, contest, first-come first-served, lottery, personal characteristics, and force. (CFA 38)
Allocation through market price is what is known as an efficient distribution. Majority, contest, FC-FS, and lottery can be said that are fair methods of allocation, usually regulated by local governments. An efficientdistribution exists when resources are obtained by the persons who value them the most, therefore maximizing benefit for the supplier and the buyer. Efficient resource allocation ensures that resources are given to those who value them the most, ensuring greater economic benefit for society as a whole. A fair allocation exists when everyone gets a piece of the resource, but it is subjective to yourdefinition of fairness.
Since the definition of fairness is subject to your own personal beliefs it is hard to determine what is fair. To be fair is to be “marked by impartiality and honesty : free from self-interest, prejudice, or favoritism” (Merriam). Since governments, through policy making, try to create policies to control the flow of resources that is fair to all. Their fairness can bequestioned by several reasons. First off, big corporations, and unions lobby in Washington to influence policy making in their favor. In the U.S. alone $3.47 billion dollars were spent in lobbying efforts in 2009 trying to influence the financial reform, healthcare reform, and energy policy (Levinthal). A study showed how companies who lobby the government got more protection from the government thanthose who did not lobby in favor of anti-dumping regulations (Grossman 835-850). Those who lobby get the benefits skewed in their favor, and clearly, as the study shows, this policy is not free from self-interest and favoritism which makes it unfair according to the definition stated earlier.
John W. Kingdon, a professor of political science in the University of Michigan, stated that “individualsand groups do look after their own interest, and politicians do pay close attention to interest-group pressure and to the consequences of their actions for their parties and for their own elections.”(74) Politicians, who are the law makers, are influenced by lobbyist and self-interest when creating policies to promote fairness, questioning the effect of the outcome. Other resource allocation...