The law of necessity states that the price of a good essential for an individual to achieve his ends (i.e., an inelastic good) cannot remain excessively high for an extended period of time. Human beings act purposefully in the pursuit of their ends, employing certain means to achieve them. If the price of a necessary good rises to the point where it impedes an individual’s ability to attain his ends, he experiences uneasiness. “Excessively high” refers to a price level at which uneasiness becomes intolerable—when individuals can no longer passively accept the cost and are driven to purposeful action.
At this stage, the uneasiness of paying the price outweighs the uneasiness of seeking alternatives. Given these conditions, individuals will, over time, seek to reduce this uneasiness either by discovering or creating substitutes, by fostering competition to lower the price, or, in extreme cases, through coercive or violent measures.
Thus, the law of necessity implies that, in the long run, heavy taxation of inelastic goods and high pricing is unsustainable. Such policies will inevitably provoke either political resistance or the development of substitutes. Consequently, a monopoly in a free market cannot endure unchallenged, as human action will ultimately undermine or bypass it. High prices may also trigger change of the regime if conditions allow a possibility of such.
A good example is fuel prices. Fuel is a necessary good for transportation, production, and heating. When prices rise moderately, consumers grumble but still pay. When they rise “excessively high”—to the point where businesses fail, households cannot commute, and political unrest brews—individuals act. They turn to alternatives (electric vehicles, public transit), political action (protests, revolts), or technological substitution (renewable energy investment). This shows that no matter how “inelastic” the demand, excessively high prices cannot persist indefinitely without human action.
