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There Ain’t No Such Thing As A Free Lunch Meaning
There Ain’t No Such Thing As A Free Lunch (TANSTAAFL) is a famous economic phrase stating that there is nothing free in this world; there’s always a hidden cost behind everything. Thus, the purpose of TANSTAAFL is to describe the relationship between cost, consumption and decision making.
The concept of TANSTAAFL prevailed in the 19th and 20th centuries. Economists believe that a free lunch always comes with some cost. It is a strategy with a hidden opportunity cost that people overlook.
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- There ain’t no such thing as a free lunch is an economic phrase that states the possibility of a cost associated with every lunch or item distributed that is considered or appears to be free.
- This concept became prevalent in the 19th century during the late 1930s. However, it had already laid its roots in the year 1892.
- This term is also known as TANSTAAFL as an acronym. It explains the involvement of scarcity, tradeoffs, decision-making, and opportunity cost.
- It is prevalent at both economic and political levels, where governments and businesses try to provide free subsidies or products to consumers and the public.
There Ain’t No Such Thing As A Free Lunch Explained
There ain’t no such thing as a free lunch is a term used to describe a situation that debates the concept of a free lunch. It believes in the theory of paying a cost for every item available in this world. Any person receiving a free item or lunch does end up paying a specific cost at any point. In short, there is nothing such as free in this world, be it a tangible or intangible product or service.
This concept has popularity in different fields, but the most prevalent one resides in economics. It explains the involvement of scarcity, opportunity cost, choice (or decision-making), and tradeoffs. Unless the resource is non-scarce or has no scarcity, it can result in a free lunch. In other words, the person can avail of the goods at no cost. But if a person wants more of it, the concept of scarcity occurs. At this moment, the person has to give up on something to enjoy that resource at no cost. This event is known as a tradeoff, where one item is adjusted for another. Yet, in reality, it does not happen in such a way. For any sacrifice made, the free item will include an opportunity cost.
Opportunity cost refers to the benefits lost when a person chooses another option. In this case, choosing a free lunch brings opportunity costs along with it. However, the TANSTAAFL also includes decision-making and tradeoffs. Individuals, businesses, and governments should make decisions on the availability of resources. If a person has unlimited wants, it cannot be justified with free resources. Thus, decisions must occur at the cost of available resources.
History
The history of There ain’t no such thing as a free lunch dates back to the 19th century. Let us look at the events:
#1- 1892
During this time, the freethinker Robert G. Ingersoll introduced the concept of no free lunch. It explained the theory of conceptual heaven, where a person must pay for their happiness to enter the heavenly state. Likewise, various publications and newspapers also mentioned this term in 1898.
#2- 1917
While this concept was becoming an expression, in 1917, the Oklahoma newspaper had an article mentioning this term. Later, British politician Michael Montague argued against this statement. He gave the opposite view compared to others, stating, There is no such thing as a free lunch. Montague explained how a person must buy something from the saloon to avail of that free lunch.
#3- 1938
In the year 1938, the newspaper El Paso Herald-Post stated the same concept with the help of a fable between the king and his economic troubles. The story mentioned how the empire was big, vast, and rich, but with the intervention of poverty, things changed. And to solve this situation, economic experts were called for a discussion. Advisors had to summarize all their knowledge of economics in the shortest possible time. While all gave up on their task, an old economist described, in eight words, TANSTAAFL.
#4- 1940 to 2000
Until this time, the concept had gained popularity with the spread of newspaper articles. And it continued till 1965. However, in 1969, a Massachusetts columnist replied to economist Milton Friedman by stating how the latter had once described economics as TANSTAAFL. Later, in 1975, Milton Friedman published his book 'There's No Such Thing as a Free Lunch: Essays on Public Policy' to support his statement. Since then, the concept has been widely popular among economists.
Examples
Let us look at some examples of this concept to comprehend the concept in a better way:
Example #1
Suppose James is a person who produces tortillas in his manufacturing unit. Until now, he has been very supportive of his employees and the laborers working there. Also, he is actively involved in providing certain supplies to his close friends and family. As per the rule, anyone can avail of five tortilla packets in a month. So, every employee did utilize this benefit they had. However, there was a condition to it. James stated that if anyone wanted to have more than five packets, they could surely have, but they must work for one extra hour.
Employees first realized working for an hour was not a big deal, so they agreed to it. After all, they were now receiving an unlimited supply of it. But, in contrast, James was now having passive productivity from the employees. And while employees decided to work for one extra hour, they were losing out on the free leisure time that was possible without this opportunity.
Example #2
According to a news article, as of April 2023, environmental experts have discussed the adverse effects of hydrogen power on the environment. The research at Princeton University and the National Oceanic and Atmospheric Association stated that excessive hydrogen emissions may cause methane to build up in the atmosphere, which could have long-term effects on climate. Although hydrogen has the potential to be the fuel of the future, there are real-world environmental and technological issues that need to be resolved. Thus, the existence of this fuel is akin to the phrase, TANSTAAFL.
Importance
The significance of this concept has been known since the beginning of the 19th century. It is a crucial concept from the point of view of consumers. Since they are the prime participants or targets, receiving a free lunch is a lucrative offer. They ignore the cost hidden behind it and avail of the nil-cost product. And that turns out to be an advantage to the firms. Thus, it is crucial to consider and analyze the costs associated with them and make an informed decision on them.
Likewise, it also becomes crucial at the political and economic levels. While governments announce various free subsidies to people, there is only a sacred reason sometimes. It is always justified by either an increase in tax rates or some unwanted economic situation that may arise in the future. Yet, the primary reason remains to have upvotes for future elections. Thus, recognizing such freebies and associating the cost with them helps us get a better understanding of the economy.
Frequently Asked Questions (FAQs)
Although history has a long list of events, the concept occurred in the 1960s. In 1966, science fiction author Robert A. Heinlein wrote a novel named The Moon Is a Harsh Mistress. It mentioned the term TANSTAAFL and later won a Hugo award for it.
Looking at a socialist economy, the term TANSTAAFL has an intuitive impact in its context. It explains how rendering free administrative services does come with some costs. And that is, they are unrecognized by the consumers at that moment.
Economists usually use this phrase in moments when there is some free service distributed to the public. And that every decision made requires a tradeoff against each other in the form of hidden costs.
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