Constrained Resources Are A Good Thing

Resource constraints are often treated as though they are the root of all evil. If only we could somehow escape them, we would be able to live much more fulfilling lives. People would no longer starve, everyone could have a big beautiful house, and everywhere would be safe. While all of these things would be amazing side effects of unconstrained resources, constrained resources in themselves are actually a very good thing. It was once said that necessity is the mother of invention. Resource constraints are one of the clearest examples of this. Resource constraints let people better utilize the resources that they already have. Resource constraints allow people to learn from their mistakes. Limited resources provide an incentive to invent fundamentally new things. Resource constraints reflect the constrained nature of reality and spur humans to innovation that they would not otherwise do.

A recognition of limited resources is the first step for the proper use of them. An understanding of the right amount of resources to use for specific tasks can only be achieved when their finitude and cost is clearly known. Understanding the importance of not going over budget can help people within any form of institution to avoid waste. There will always be waste, but constrained resources make it harder for people to ignore just how destructive improper use is. Every piece of material should be used to further human well-being. Any organization having access to what feels to be unlimited resources will deny this fact, and send resources towards pointless ends. Using resources towards bad ends is always a problem, but happens often because people don’t understand the constraints that make it so dangerous. Because we live in a constrained world, understanding that resources are constrained will naturally align people’s uses of resources with reality rather than enable them to spend money they don’t have. A recognition of limited resources is the basis for all effective action.

When people don’t have resource constraints, it’s very difficult for them to learn from their mistakes. Truly running out of resources is able to teach a lesson that no amount of management optimization can teach. Decision-makers are trying to make choices without input if they can be wrong with no consequences. While human-imposed consequences can be helpful, a situation that ties people to their utilization of resources more directly can teach quite effectively without a temptation to do away with the guidelines altogether. Information without consequences takes much longer to teach. The Internet is full of free information, yet people learn most deeply when information interacts with them in the physical world. Environments like educational institutions, big businesses, and bureaucracy are so dangerous because they let people make mistakes while being insulated from the consequences. Letting people in typically resource-abundant situations run up against the lack caused by waste of resources can be more valuable than shielding operators and politicians from the side effects of their waste. Everyone has resource constraints, and to pretend that they don’t exist is to cut out a crucial source of information and stops the cycle of learning.

Governments are typically very poor innovators. Without the prodding of constrained resources, businesses and individuals would not feel the sense of unease that pushes them to innovate. The desire to attempt new methods and create in the world is often turned into action only because of constrained resources. A world with less constrained resources has the highest chance of being created by a world that recognizes its current constraints. Creating new things as difficult and it is only worth it because it is less difficult over the long-term than the alternative. A business that can successfully inculcate in each of the employees an understanding of the limited resources of the company will discover far more than the company that creates an illusion of infinite margin. Margin can be dangerous, even when it is earned fairly. Margin can cause some businesses to innovate less rapidly than they would without it. Although most innovation is aimed at generating margin of some form, it is not spurred by surplus, and surplus often makes innovation less likely. Rather than being something to be feared, resource constraints, allow people to discover the best in themselves and other others. When designing institutions, the uncomfortable reality of resource constraints should be hardcoded into the incentives rather than protected against. If more institutions were comfortable recognizing their own finitude, they could approach problems with the humility needed to tackle them, and their people could innovate rather than ask for more resources.