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| '''TANSTAAFL''' is an acronym for the adage "There Ain't No Such Thing As A Free Lunch," invented by ] ] ] and promulgated in his ] novel '']''. This phrase and book are popular with ]s and ] textbooks. | '''TANSTAAFL''' is an acronym for the adage "There Ain't No Such Thing As A Free Lunch," invented by ] ] ] and promulgated in his ] novel '']'', a ] ]. This phrase and book are popular with ]s and ] textbooks. | ||
| Simply put, it means that you can't get something for nothing. In ], this concept is known as ]. Even if something appears to be free, there's 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). This may or may not be true at the individual level, depending on the interpretation of the phrase. | Simply put, it means that you can't get something for nothing. In ], this concept is known as ]. Even if something appears to be free, there's 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). This may or may not be true at the individual level, depending on the interpretation of the phrase. | ||
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| 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 ] prevails. But when ] exists, one can get a "free lunch" by abolishing it. For example, microeconomics argues that the pollution example of the previous paragraph is allocatively ]. A tax or other program that forces the polluter to internalize this ] would improve efficiency, increasing social welfare. However, others (]) may be benefiting from the inefficiency and use their ] or ] to prevent you from doing so. That is, the polluter may use lobbying and campaign contributions to preserve his or her right to pollute. | 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 ] prevails. But when ] exists, one can get a "free lunch" by abolishing it. For example, microeconomics argues that the pollution example of the previous paragraph is allocatively ]. A tax or other program that forces the polluter to internalize this ] would improve efficiency, increasing social welfare. However, others (]) may be benefiting from the inefficiency and use their ] or ] to prevent you from doing so. That is, the polluter may use lobbying and campaign contributions to preserve his or her right to pollute. | ||
| Hard-core advocates of the TANSTAAFL principle seem to assume that ] are efficient unless due to interference by the government or other "outside" forces. The ] is seen as the solution to issues such as pollution. | Hard-core (]) advocates of the TANSTAAFL principle seem to assume that ] are efficient unless due to interference by the government or other "outside" forces. The ] is seen as the solution to issues such as pollution. | ||
| The TANSTAAFL argument may also be applied to natural physical processes; see ]. In ], the term is also used as an informal synonym for the principle of no-]. | The TANSTAAFL argument may also be applied to natural physical processes; see ]. In ], the term is also used as an informal synonym for the principle of no-]. | ||
Revision as of 23:48, 24 June 2004
TANSTAAFL is an acronym for the adage "There Ain't No Such Thing As A Free Lunch," invented by science fiction writer Robert A. Heinlein and promulgated in his 1966 novel The Moon is a Harsh Mistress, a libertarian utopia. This phrase and book are popular with classical liberals and economics textbooks.
Simply put, it means that you can't get something for nothing. In economics, this concept is known as opportunity cost. Even if something appears to be free, there's 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). This may or may not be true at the individual level, depending on the interpretation of the phrase.
Though it is possible for an individual to get a "free lunch" (as when a company cuts costs and gains competitive advantage by polluting the air), someone ends up paying the cost of the "lunch." Even though there is no individual or private cost, there is a social cost.
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. However, others (rent seekers) may be benefiting from the inefficiency and use their political or social power to prevent you from doing so. That is, the polluter may use lobbying and campaign contributions to preserve his or her right to pollute.
Hard-core ( classical liberal) advocates of the TANSTAAFL principle seem to assume that markets are efficient unless due to interference by the government or other "outside" forces. The free market is seen as the solution to issues such as pollution.
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.