So I haven't read Marginal Revolution or followed Tyler Cowen consistently for probably 15 years, so take my word for what it's worth, but as far as I can tell, he's just referring here to prerequisite knowledge, other information you have to have ingested and understood before you're going to have any real hope of understanding something else. "That which is scarce" is not itself a definition. Lots of things are scarce and most of them are not context. He seems to be using that phrase to indicate that context is scarce in a lot of readers and consumers and this harms their ability to understand anything.
Given the mileiu we find ourselves in on the web, this is probably hard to avoid. We're deluged with information nonstop, typically in fairly shallow small bites, often from sources with very limited and biased points of view. Doing a true deep dive to understand background and context before forming any sort of conclusion of your own is difficult, time-consuming, and contrary to human instinct, because we want to participate, and if we don't have an opinion, we feel like we can't, or at bare minimum, saying that surely won't put you at the top of an upvote-based sorting scheme.
Take this very thread. I'd heard of Palantir in the sense of hearing the name, knowing where that names comes from, and knowing it is associated with Peter Thiel. That's about all I knew of it before right now. After reading this blog and all the comments, what do I know now? A little bit more. My prior on them being part of an explicit and intentional conspiracy to abet genocide and prepare the population for an eventual authoritarian takeover in which regular people are getting jailed left and right for buying Plan B and what not is low, so I guess I tend to dismiss speculation like that. They seem to make a product for synthesizing data from sources that don't have compatible schemas and seemingly no APIs for common-format export. That was largely just manual work at first, maybe still is, but they've tried to make a product of it. Some commenters are saying it is snake oil. Some are saying it's amazing and useful. My takeaway from that is they are trying to solve a very hard problem and sometimes what they do works and sometimes it doesn't. They seemingly take on customers that are political hot potatoes and not popular with the stereotype demographic of a silicon valley workforce, more typical of the customers you'd usually see taken on by a Raytheon or Lockheed.
I guess I'm supposed to have an opinion beyond that. I don't know. My brother-in-law works for Anduril and has spent most of his time the past three years deployed to theaters of combat teaching soldiers to use drones. My wife works for Raytheon on a spy satellite orchestration that is literally named Cyberdyne and would almost certainly be considered dystopian by any average person on Hacker News that heard about it and didn't have the context of working on it for two decades. I don't believe they're evil. I was an Army officer commanding tank units in Iraq and Afghanistan and I don't believe I'm evil.
I'm not sure how people think we're supposed to approach subjects like this. We're going to have international conflicts and laws. They're both a part of civilization. Given that, it seems somewhat inevitable and reasonable that countries will also have military and law enforcement agencies. Balancing action with inaction, false positives with false negatives, is impossible to get right all of the time, but what is the takeaway? Should all humans everywhere refuse to work for any military or law enforcement agency? Should all businesses refuse to sell to them? Wouldn't that mean we effectively have no defense and no laws? Where is the line between acknowledging that sometimes even your own country is guilty of atrocities and overreach and simply throwing up your hands and saying we should build no weapons and have no sort of intelligence gathering activities of any kind?
I don't buy that the US or Israel is uniquely evil here and seemingly neither is Palantir simply for doing business with ICE and the IDF. I'm obviously motivated to believe that, but again, surely there is some spectrum, isn't there? If we look at say, the 20th century histories of France and Germany, there are no saints. France was an imperial power that did a lot of bad shit in Africa. They gassed protesters and have had some obvious law enforcement brutalities. But they didn't commit a holocaust and try to conquer all of Europe. I guess that's a low bar to clear, but still, should no one ever sell anything to the French military? The German military? Doesn't that again mean they wouldn't have militaries? If neither European powers nor the US had militaries, then seemingly all of Europe would currently be Soviet republics. That is surely not better than where we actually find ourselves, even if where we find ourselves isn't the best we can do.