Michael Williams explains how inequality is preserved when there is enough for everyone.
Modern economics purports to tackle the problem of scarce resources. In truth, our greatest challenge lies in managing abundance effectively. Once a society produces more than it requires to survive—a surplus—the question shifts from how to allocate scarcity to how to handle inequality, motivation, and consent in the face of material plenty.
Surplus changes everything. It creates two core problems. First, surplus becomes meaningful solely through exchange—unless traded, it holds no value. Second, if individuals must secure their survival through exchange, it becomes profitable to produce what can be consumed indefinitely, rather than what is genuinely needed. From this tension arises capitalism—not a system of scarcity, but of perpetual surplus, reliant on waste, novelty, and obsolescence to remain viable.
Those who control exchange —not production —gain economic power.
Surplus and exchange
All post-subsistence economies are exchange economies. They derive value not from utility but from the capacity to exchange goods and services. Essentials can be consumed directly, but once a surplus appears, its value can only be realised through trade. Wealth is not merely produced—it is exchanged into existence.
Those who control exchange —not production —gain economic power. The surplus arises from productivity: a society’s ability to meet essential needs using only a portion of its resources. The remainder—freed labour and materials—can be employed for non-essential production. However, without exchange, none of it holds value.
The production paradox
Every product, once created and consumed, eliminates its own demand. This is the central paradox of production: successful production undermines the necessity for future production. To prevent collapse, surplus economies must ensure continual demand, which they achieve by favouring short-lived, perishable, or status-driven goods. Consequently, the pattern of production becomes arbitrary—not determined by need, but by a product’s capacity to renew demand.
Once surplus dominates, economies evolve into self-reinforcing systems of exchange. Durable goods and stable consumption are penalised. Instead, goods must be easily consumed and quickly replaced. Producers who adhere to this pattern thrive by securing ongoing access to the surplus. Those who do not—who create long-lasting or truly essential products—are marginalised, eliminated, or forced into subsidy.
The logic of surplus absorption determines which industries thrive. It is not usefulness, but rather the speed and volume of exchange that dictates survival. Consequently, entire sectors—from fashion to tech—are structured to generate demand cycles instead of addressing lasting needs.
Where surplus production exceeds subsistence needs, value gravitates towards what is rare, desirable, or profitable—not what is necessary.
Essential scarcity
The Poverty Imperative refers to an evolutionary tendency within surplus economies for essential goods to remain scarce or undervalued, not by deliberate design but as a natural outcome of market incentives under conditions of inequality. In a system where producers must exchange goods to survive or prosper, and where surplus production exceeds subsistence needs, value gravitates towards what is rare, desirable, or profitable—not what is necessary.
As inequality grows, markets evolve in favour of luxury, status, and non-essential commodities that yield higher returns. Producers, responding to competitive pressures and opportunity costs, shift away from low-margin essentials towards high-margin goods. Over time, this behaviour becomes self-reinforcing. Essential goods, though abundant in potential supply, are crowded out or neglected, and their scarcity persists—not because no one needs them, but because meeting that need is less economically viable.
Take housing as an example: in many urban centres, the provision of shelter increasingly favours high-yield developments — luxury apartments, short-term rentals, investment properties — while affordable housing remains in short supply. This isn’t centrally planned neglect; it is the aggregated result of rational actors responding to profit signals within a free market shaped by inequality and surplus.
Thus, the Poverty Imperative emerges organically as a stabilising trait in surplus economies, preserving labour discipline and reinforcing exchange-based access to life’s necessities. It masks abundance with artificial scarcity, not through conspiracy, but through the uncoordinated logic of the system itself.
This process ensures that wealth remains concentrated among the exchanging class, those who profit from trade rather than production.
Re-valuation assigns greater value to products that effectively absorb surplus through exchange. Fast fashion, disposable technology, and luxury services are rewarded. Care work, food, and infrastructure are systematically undervalued—not due to a lack of utility, but because they do not eliminate surplus swiftly enough.
This process ensures that wealth remains concentrated among the exchanging class, those who profit from trade rather than production. It also prevents producers from accumulating sufficient leverage to democratise the economy.
For the system to function, surplus must be consumed. Initially, elites absorb it through conspicuous consumption. However, as surplus expands, a consuming class must emerge — not out of necessity, but to keep the cycle in motion. This consumption is culturally and psychologically reinforced to ensure that arbitrary goods appear desirable.
The surplus also threatens motivation. If fewer people are needed for survival, what motivates the rest to work? The answer lies in concealing the surplus and maintaining the illusion of scarcity. Work remains necessary only because access to essentials is limited.
Wealth and the crisis of meaning
Wealth in a surplus economy is not what you have, but what you can exchange. The more rapidly something can be traded—and retraded—the more value it generates. This logic transforms the economy into a cycle of production-for-exchange, rather than production-for-need.
However, the surplus also opens up the possibility of choice — about what to produce, for whom, and why. This threatens the legitimacy of systems based on necessity and hierarchy. The entire structure of inequality depends on keeping these questions from being asked.
Surplus economics reveals the fundamental contradiction of capitalism: it flourishes not on scarcity, but on abundance—and the necessity to deny that abundance. The production paradox, Poverty Imperative, and revaluation mechanisms all function to obstruct the democratic redistribution of surplus.
The path not taken —sharing the surplus, eliminating inequality, and planning production rationally — remains politically unthinkable to many. However, the economic problem has already been resolved: we can satisfy everyone’s material needs. What remains is the political and psychological challenge of embracing the freedom that surplus makes possible.
