Help me understand scarcity I'm struggling with what should be a simple concept: scarcity. For some reason, I just can't wrap my head around the fact that in this highly advanced technological society of ours, we can't fix scarcity.

Sure, we might not be able to produce an "infinite" amount of things. But then again, nobody wants an infinite amount of things. That's an absurd notion, and an even more absurd foundation to build a principle on. 

Say, everybody wanted 4 cars on average. Some people might want less, some more. Can we really not ramp up production to facilitate this wish? Couldn't we ramp up production to dig out even more gold? To mine for even more diamonds? To grow even more food? To collect even more water?

We live in an age of advanced technology. Of algorithms, artificial intelligence and of highly automated large-scale production. How am I to believe that, given all these abilities, we couldn't achieve a solution to a reasonable form of scarcity? By reasonable I mean scarcity that makes sense within a human context: nobody wants an "infinite amount of cars", at least the vast, vast majority of people don't, and the few outliers that do shouldn't be relevant in an economic principle of this significance. 

This seems like an idea that would have made sense a century ago, but not anymore. How and why does is still hold up, considering our unprecedented potential to produce goods?
What you are saying is that the marginal utility of one additional good (car, or coconut) decreases and tends to zero. I believe everyone agrees with that.

The reason why scarcity matters is not that people can't be satisfied with a finite consumption, but that most individuals currently consume below their satiation level and would be happier with one additional unit. Most people would prefer a bigger house, a more luxurious car, more clothes, etc., even if they would finally be satisfied with some finite level.

Regarding your observation "Can we really not ramp up production to facilitate this wish?", the answer is no: it is still too costly to produce cars, houses, clothes etc. to accommodate everyone's wishes. If we were able to produce costlessly the amount of goods required to satisfy everyone's satiation level, the problem of scarcity would be solved (and economics would disappear as a science), but we are clearly far from this situation.