Sourced from YT channel Future Vision: https://www.youtube.com/@FutureVision99
Ha ha, that’s a funny joke - two economists eat sh*t, get nothing in return and GDP rises by $200!
But swap “eat sh*t” with “do something useful” and the joke now describes a healthy economy from a first principles perspective.
If I gave you a $10 bill to mow my lawn, I got something useful done - my lawn got mowed. You could then give the same $10 bill to your mate next door for their vase you always fancied. Your mate could then pop down to the local farmer for $10 worth of potatoes, paid for with the same $10 bill that I gave you. And this could go on ad infinitum, the same $10 bill continually changing hands being useful over and over again, for different people with different needs.
Money is a system we have invented to get things done. People don’t usually work for free, so if something needs to get done, money is needed to pay for it. It’s a brilliant system, a brilliant motivator to get things done that has evolved into a global fiat money system, so complex that the initial first principle often gets lost.
Rather than seeing money as the oil that lubricates the cogs in an economic machine, the focus moves to hoarding the money for use in the future. In an internal combustion engine, the same oil is continually pumped around the system lubricating all the parts resulting in a smooth running healthy engine. The same with that $10 bill, it continually changes hands getting things done, in effect “lubricating” a healthy economy. As long as whatever was exchanged for the $10 bill was valuable to the recipient, everyone’s a winner.
Imagine what would happen if the oil is not pumped around the engine but remains in the sump only to be used at the behest of whoever “hoards” that oil.
Easy to see how at some point, parts of the engine will seize up.
Easy to see how the power to decide which cogs to lubricate and when, would ultimately lead to a malfunctioning engine.
Easy to see why money, like the oil, should circulate rather than accumulate.
An oversimplification I know, but then so is the joke.
