Economics is the art of cooperation and competition aimed at conquering scarcity.
Economics is the social science of cooperating and competing to overcome the immortal tyrant of time scarcity. In this never-ending struggle, one of our most important tools is money — a socioeconomic emblem of human time. For centuries, time was the only absolutely scarce substance in the universe, but now a novel money has arisen which exhibits perfect fidelity to time — Bitcoin.
A Tyrant of Time Immemorial
All human action inescapably occurs within the bounds of time. As the universally shared element of experience, time is the grand paradox of nature; it heals all wounds, yet ultimately ravages all things. Each of us feels a current of time that is totally impersonal; in a ruthlessly egalitarian manner, time flows equally for rich and poor, sick and healthy, young and old alike. The temporal flows we experience cannot be reproduced, reversed, or stopped. At an intrapersonal level, our allotment of time is as scarce as our lifespan is limited. Interpersonally, time scarcity manifests as the total time we can collectively allocate towards serving one another; whether we are making goods, providing services, or gaining knowledge — we have but a finite quantity of hours to commit towards our efforts. In this sense, time scarcity is the immortal tyrant subjugating all of us mortals. Only through cooperative action can we break free of the restraints time scarcity clasps upon us.
Society is the sum total of cooperative actions taken, a social order that is, paradoxically, shaped by competition among its constituents — free people. Actions intent on improving our relationship with nature, which enhance our quality of life by saving us time, necessarily involve the use of natural resources. If one seeks to dig ditches faster, he will first need to construct a shovel — a tool that requires wood from a felled tree, refined metal ore, and expertly shaped screws to hold the (earth-shattering) device together. Since the Earth we share is physically finite its natural resources are inherently scarce, and we must each compete to earn our own fair share. In a world that is as physically abundant as our ingenuity will allow, it is ultimately only our finite time that constrains us from producing more of anything we want.
Existing under the ubiquitous tyranny of time scarcity, it’s natural for animals to adopt more energy efficient means of satisfying their wants. The “Law of Conservation of Energy-Mass” is the 1st Law of Thermodynamics; an inviolable principle of the universe that organisms (lazily and cleverly) follow to the letter. Predators in the wild frequently make expected-value calculations when deciding whether or not the anticipated energy expenditure in pursuit of a particular prey is worth the caloric value of the meal, should the hunt be successful (most hunts have low chances of success). Even herbivores like koala bears economize their physical movements to maximize their consumption of eucalyptus leaves per exertion. Of course, these decisions are not (likely) based on any mathematical knowledge, but rather on instinct.
Similarly, driven by an instinct to overcome the oppression of time scarcity, us humans have always found ways to uncover and extract ever-more natural resources as we “hunt” for satisfactions to our wants. We have literally “just scratched the surface,” as our efforts haven’t even taken us halfway into the Earth’s crust, its thinnest and outermost layer. Through generations of trial and error, with our collective learnings accumulated in heuristics, written knowledge, and methodologies, mankind has steadily economized his productive efforts, gradually making more and more use of his time. The fruits of our labor are evident: the price of all natural resources, in terms of time necessary to produce them, has steadily decreased over the long-run as technological advancements continually increase our productivity — our capacity to produce the greatest results with the least effort. Metal prices over the past two centuries are a testament to this:
Evincing the simple truth of mankind’s ever-rising productivity is gold: as the annual new supply flow of this extremely rare metal remains steady, it makes no sense to consider other natural resources (which are less rare than gold) as scarce in any practical sense. Indeed, only time scarcity truly constrains our creative output. In this sense, time — both individually and collectively — is our most precious and scarce resource. Each of us seek to extend and savor our time on Earth. As a population, we strive to economize our actions and increase our productivity to attain the greatest results possible with minimal use of time and effort. Indeed, the purpose of the world economy is to accelerate our collective productivity gains through innovation and trade; in a term, to gain energy efficiency — our sole emancipator from the hardships imposed by time scarcity.
In Part 2, we will learn how trade interconnects and empowers us to overcome the tyranny of time scarcity…
