| No Free Lunch |
Article Index for No |
Information AboutNo Free Lunch |
| CATEGORIES ABOUT TANSTAAFL | |
| adages | |
| acronyms | |
| robert a. heinlein | |
| english phrases | |
| there aint no such thing as a free lunch | |
| economics aphorisms | |
|
DETAILS Simply put, TANSTAAFL means that one cannot get something for nothing. Even if something appears to be free, there is always a catch. You may get free food at a bar during " Happy Hour ", but the bar-owner either figures out a way to get you to pay or gets some sort of benefit (such as attracting new customers, who will return on other occasions and pay for their food). TANSTAAFL may or may not always hold at the individual level, depending on the interpretation of the phrase—you might get a "free" lunch if someone else buys it for you, willingly or not. But if it seems that an individual is getting a "free lunch" (e.g. a company cuts its costs and gains a competitive advantage), ''someone'' always ends up paying the cost of the "lunch" (e.g. the cuts increase factory pollution). If there appears to be no direct cost to any single individual, there is a Social Cost . Similarly, someone can benefit for "free" from an Externality or from a Public Good , but someone has to pay the cost of producing these benefits. Strictly speaking, the idea that there is no free lunch at the societal level applies only when all resources are being used completely and appropriately, i.e., when Efficiency prevails. But when Inefficiency exists, one can get a "free lunch" by abolishing it. For example, microeconomics argues that the pollution example of the previous paragraph is allocatively inefficient. A tax or other program that forces the polluter to internalize this externality would improve efficiency, increasing social welfare. In practice, however, others who are benefiting from the inefficiency will use their Political or Social Power to prevent you from doing so. That is, the polluter may use Lobby ing and campaign contributions to preserve his or her ability to legally pollute. To a scientist, TANSTAAFL means that the system is ultimately closed—there's no magic source of matter, energy, light, or indeed lunch, that cannot be eventually exhausted. Therefore the TANSTAAFL argument may also be applied to natural physical processes; see Thermodynamics . In Mathematical Finance , the term is also used as an informal synonym for the principle of no- Arbitrage . TANSTAAFL is sometimes used as a response to claims of the virtues of Free Software . Free Software supporters often counter that the use of the term 'Free' in this context is primarily a reference to a lack of constraint rather than a lack of cost. CITATION
SEE ALSO |
|
|