True - lots more talented people would benefit the world. But you have to consider opportunity cost as well. If web application development required genius level knowledge, then you'd have to convince one of the best minds in some other critical field to switch over to it. Suppose the only person who could write webapps is also capable of engineering a sustainable and pollution free source of energy. The world might be better off with no webapps at all.

A lot of people have pointed this out - it actually takes quite a bit of talent to write reasonably unbuggy code that updates payroll from the eight different departmental database systems. It's just terribly boring, and not especially well paid, so the people with this kind of talent either do other things in the software world, or don't work in software at all.

Sure, I was only taking issue with the claim "In a free market economy there is no such thing as a shortage, by definition". Let's take food as another example: if there is not enough food to feed all people it doesn't help much that the market will establish a fair price for the food. Some people are still going to starve.

In the long run the market might try to provide more food, but perhaps there simply is a limit to the amount of food that can be provided.

Likewise for good programmers - maybe the amount of people who are intelligent enough is severely limited? Although I suppose woith 6 billion people, there should be the one or other with sufficient brains...

Your food shortage example isn't relevant to programmer shortages. Food shortages typically only occur when governments impose price controls that artificially force prices below the market price. Then farmers stop growing and distributors hoard supplies. Total worldwide food production is far in excess of what it would take to adequately nourish all 6.5B+ people; for practical purposes food production capacity is unlimited. Major famines now are typically caused by breakdowns in the distribution system due to wars, natural disasters, or active governmental malice (c.f. North Korea and Zimbabwe); this is not a market issue.

The fundamental point is that if there really were a shortage of programmers then programmer compensation would be rapidly increasing. However, industry data shows that average compensation is increasing at only slightly more than the rate of inflation. Therefore, there can't possibly be a shortage right now.

I am thinking in more abstract terms, not making any claims about todays actual food production. Historically, I think most of the time food shortage was caused by climate problems (bad weather, eroding soils, etc). I just wanted to make the point that the market will not always be able to provide what everybody needs, simply because the market can not provide more than what is available.

Interesting point about the compensation rates, but I'd like to think more about the issue before accepting the argument (note that I don't claim that there is a shortage of programmers).

No, historically most food shortages have been caused by bad government.

Then who decides what's best for the economy as a whole? Industrial policy has been a dismal failure almost everywhere it's been tried. Perhaps we would be better off with fewer web applications and more vaccines, or automobiles, or novels, or furniture, or whatever. One person's opinion that we need more web apps doesn't count.

I was not making any claims with respect to what is best for the economy. My only concern was to point out the (imo) flawed argumentation, that is, the false logic.

Where is the false logic?