THE ORIGIN OF NEEDS
THE ERA OF ABUNDANCE
The Christian religion postulates that God created man and put him in the garden of Eden where all he wanted was provided for him. He lived in real affluence. This level of living continued until the devil was believed to have deceived him. Then he lost the abundant caring of God. He was sent out of the garden and cursed, “from thy sweat shall thou eat” (Genesis 19). Since then, the needs of man had to be met by the efforts of man.
Era of Limited Needs
At the beginning, the needs of man were limited. The basic needs were to an extent met. The fruits of the forest as well as the roots provided the food, the rivers, brook and springs provided the water, the caves and tree-tops provided the shelter, crude methods were used in procuring fire and killing of animals. With civilization, man became exposed to the other things found in other places. Those that were produced in his own vicinities were no more adequate for his use. The search for supplies of the items that were in short supply or in non-existence started the urge to explore for avenues for meeting the needs.
The Beginning of Trade:
Man works daily to supply his needs. Unfortunately, the gifts of nature, thus globally needed are not evenly distributed. It is thus impossible for people in a particular group or location to provide all their needs. They produce some products in excess of their needs and less of some. They have to exchange those excesses for those that they needed. This was the beginning of trading.
Trading (exchange) started along the roads and other meeting points. Trade first took the form of barter where” commodity A has to be exchanged for commodity B. It was a difficult task as the A law of double coincidence must operate before exchange can take place i.e. if a man has yams but needs beans, he cannot exchange the yams until he meets the man that has excess beans and is willing to exchange same for yams.
The Era of Money Economy:
To solve the problem created by barter, money was introduced. Many things were used as money in the past. These include leaves, cowries and other sea-animal shells, hides and skins, bread and minerals. Today, we have coins and printed currencies. Wars and the use of money promoted trades. The wars exposed the soldiers to see many goods of the foreign countries. After the wars, trading started. The formally low frontier of human needs expanded.
With the coming of industrialization the production level of the industries increased. The supply for raw materials to continuously feed the mills increased. The immediate surroundings could not supply the needs. Investors had to look beyond their surroundings for supplies. With further growth in the level of competition, the need for reduction in costs to ensure higher profitability increased Raw materials or inputs have to be purchased in the moj economical quantities their use has be controlled.
Clarification of Needs
Needs can be classified into different categories depending on their importance and level of urgency. These include:
a) Psychological Needs: These are needs that are basic to human existence. They are inborn in the individual. Such needs include the urge for food, shelter, clothing, and drinks. The needs take precedence over other needs. They have to be serviced before other needs can be attended to.
b) Social Needs: These are needs that grow with the social status of the individual. The position of the individual defines the quantity and the quality of the items supplied or that satisfies our psychological needs. If an individual is wealthy, the type of food that he will like to take and the quantity would go up. ,
c) Factors of Production: With reference to production center, or firms, the needs can be classified into human and non-human needs. These needs are referred to as the factors of production. The factors include land, labour, capital and entrepreneurial capabilities. These factors are combined in the most economical mixtures to enhance production of most economical mixtures to enhance production of most economic price
i) Land: Land refers to the gift of nature. It includes the earth’s crust, water, air and the forest and all things therein. • By nature, land is fixed. This does not mean that land cannot be reclaimed but that the cost of such exercise is usually very high and may not be economical. The cost of land is rent.
ii)’ Labour: This is human factor of production. It refers to the efforts of the human beings. The cost of labour is usually referred to as wages or salaries. Labour may be skilled, semi-skilled or unskilled. The higher the level of skill labour has, the higher the cost it commands in the labour market. Skilled labour is readily available in the cities while unskilled labour is abundant in the rural areas, iii) Capital: This refers to the man-made factors of production. Capital includes the equipments, machines, new or finished materials that can transformed into a desired output. To the economist or the businessman, or people in the financial houses. Money is the major, capital. With money, it is assumed that all factors of production can be purchased. The cost of capital is usually referred to as the interest. The higher the rate of interest, the more disposed is the lender to give out his money but the more unwilling is the borrower to borrow.
iv) Entrepreneur: The entrepreneur is another human factor. Some people argue that it should be part of labour as it contributes to production. Other schools of thought opine that it should be separate as it is the entrepreneur who hires labour. The argument is that the hired is different from the hirer.
How and Where Needs Arise
Needs may arise as a result of:
a) Inadequacy: The supply of an item may be in the short supply. If what is demanded is less than what is supplied, there will be the need to look for more to meet the demand.
b) Development: This may be as a result of changes in the weH being of the purchaser. If the income of an individual increases, his consumption pattern will show an increase in most of the things he consumes. He will operate on a new indifference curve.
c) Speculation: Demands are known to go high when possible shortage is expected in the shortest future period. When this situation is envisaged the economic man stockpiles. When this is then demanded at the particular period of time definitely shoots above what is needed.. Buyers stockpile when they fear that the price may likely go up.
d) Growth of the Population: When the population grows rapidly, some social amenities, which under normal situations may not be pressing, may become very important e.g. The need for toilet facilities become acute with the: growth in the population. A room that is adequate for a few number; of people would need an electric fan if the population has to increase. Thus, the density of usage is a factor determining needs.