During a recent appearance on Joe Rogan’s podcast, Elon Musk succinctly described the exact predicament the post shutdown world must come to terms with: “If you don’t make stuff, there’s no stuff.”
“Obviously,” he went on to say.
It might be obvious to Musk, but it’s clearly not obvious to many people, and probably least obvious of all to politicians, bureaucrats, central planners and NGO wags.
Can’t blame them, really. For people who demonstrably make nothing, who have never made “stuff” of any kind, it must be upsetting to realize the futility of their existence. People who aren’t employed to make stuff notably don’t have any skin in the game of a massive economy-wide shutdown, at least not directly.
But stuff must be made if it’s going to exist. That’s a simple way of talking about scarcity. Scarcity is a vitally important concept in economics, because all sorts of other economic assumptions we make are based on the fundamental fact of scarcity.
If there was infinite everything, then prices would be absurd and unnecessary. If we could instantaneously transport or replicate anything with no energy usage, (like in Star Trek) then what’s the use of accounting, or running a business, or paying taxes or of money itself?
