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Revision as of 23:35, 24 June 2004 by Jdevine (talk | contribs)(diff) ← Previous revision | Latest revision (diff) | Newer revision → (diff)TANSTAAFL is an acronym for the adage "There Ain't No Such Thing As A Free Lunch," which was invented by science fiction writer Robert A. Heinlein and promulgated in his 1966 novel The Moon is a Harsh Mistress. Simply put, it means that you can't get something for nothing (a gift). 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).
Another example: 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. However, others (rent seekers) may be benefiting from the inefficiency and use their power to prevent you from doing so.
This 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.