Problems of Economic Organization

So, according to Samuelson, what are the basic concepts of economics, anyway?

The central problem of economics is the allocation of scarce resources to satisfy the unlimited needs of society, usually involving the production and distribution of goods to be consumed. Plentiful goods are dubbed free or non-economic and are excluded from the analisis. The law of scarcity is the basic fact that resources are scarce and wants unlimited.
The basic economic decisions that must be made by any society are what goods to produce, in what quantities, and who gets to enjoy them. Societies' economics organization is a mixture of custom, control and market.

The state of an economy can be specified by listing the amounts being produced of every possible good, and the economy is said to function efficiently if it is impossible to produce more of one good without reducing the production of others. In the state space, the locus of the efficient states is called the production possibility frontier.

The law of diminishing returns states that the higher the production of a given industry, the less it will improve with the same increase in resources allocated to it. This law is equivalent to the PPF being convex. The law of diminishing returns does not always hold, but it "eventually sets in".

Finally, the cost of an economic decision is not only the price of carrying it out, but also includes the loss of the benefits that would be obtained from an alternative decision. This is called opportunity cost.

Critique
I have issues with the way the law of scarcity is presented: often the problem is not insufficient production but inadequate distribution. Our capacity for food production is already enough to feed the entire population of the earth (and Samuelson mentions that an adult's nutritional needs can be satisfied for about $1 a day), yet people still starve all over the world. Amartya Sen has pointed out that the cause of famines is often lack of freedom and not lack of resources. Dennis Kucinich recently argued that Americans already spend enough for health insurance to pay for top-tier health care for everyone, but because they pay for insurance and not for care there is a large population without access to medical care. The problem goes away if one includes among the wants the demands of the agricultural industry or of the health insurance companies, which for one reason or another outcompete the demads of ordinary people for food or health care.

Of more concern are Samuelson's implicit assumptions about efficiency and scarcity. He says that the PPF gives a precise meaning to the term scarcity, but this implies comparing actual production to possible production, and not production to needs as he originally stated. In another troublesome passage, he says that there is no free lunch unless the economy is operating below efficiency. More precisely, to paraphrase his example, there can't be gift-giving or genuinely generous or disinterested behaviour unless there are idle resources available. The problem is that permeating Samuelson's exposition is the idea that achieving efficiency is good in itself, because it is impossible to produce more than is needed (an assumption contrary to fact in certain cases). But wait! Who was it that said that they dedicated themselves to state affairs so their children could dedicate themselves to law and industry and their grandchildren to art and science? Isn't increasing efficiency always justified on the grouds that it will free people to apply their time to nobler pursuits than just work? Aren't Americans working harder and more productively now than in the 1960's. yet their income has gone down in real terms? What is the difference between enjoying free time and idle laziness in the eyes of the economist? Am I being caught by the value-loaded terms efficiency and idle, or is there something perverse about the pursuit of efficiency (in its technical sense) for its own sake?

Finally, it is unclear to me whether the production possibility frontier is supposed to reflect the limits of a given economic organization (in which case the only way an economy can operate below efficiency is by having idle resources), or whether is is supposed to reflect the maximal production possibilities under any conceivable economic systems (in which case inefficiency can be ascribed to organizational flaws). In other words, does liberalization shift the PPF of an economy already operating at efficiency, or does it move the economy closer to its PPF? Is a planned aconomy on a low PPF, or deep inside its PPF due to inherent inefficiency of planning? Samuelson appears to contradict himself when he states that the USSR was "already on their rather low PPF" when WWII broke out and could not improve efficiency because it "had little unemployment", and then that "an economy is inside its PPF [...] because a command economy is subject to arbitrary decrees by inept bureaucrats" and so "deregulation [...] can improve efficiency and move the economy towards its frontier". I suspect the answer is both, depending on whether one is analyzing decisions about production of goods or about the organization of the economic system itself.