TRADEOFFS

A brief lesson on economics and a modest admonition to the politicians of Ohio.

Let’s talk trade-offs. Everything has tradeoffs. Let’s say you have ten dollars. If you want to buy something with your ten dollars, let’s say a snow globe–I guess you’re a snow globe person, to each their own–you’d say your cost is ten dollars. But what is ten dollars to you? Nothing because money is a figment of our collective imaginations. If this were the 90s you could burn it or something for warmth but this is the future, you don’t have cash. Let’s be honest, it’s just binary code in your bank account portal or your PayPal, it’s not real. 

The real cost is what you could have done with that $10 instead of buying a snowglobe. With that money you could have seen a movie or bought a book or maybe a nice lunch (you pay more than $10 for a nice lunch?). That’s your opportunity cost: the value to you of your next choice purchase. And maybe the dollar value of all these things is exactly $10 but there was some reason you bought the snow globe instead of the others. You could be a snow globe collector, sure. Or you might think seeing a movie is worth $10 but it’s not worth sitting in a theater to watch these incredibly long movies which, with the trailers and the compulsory end credit scenes, is going to stretch into three hours of your day lost not looking at snow globes. 

Or maybe it was an impulse buy. Maybe you don’t even really like snow globes all that much but you were exiting through the gift shop after the free day at the museum (you’d never pay to go to the museum!) and the snow globe looks neat and the visit was free so maybe you ought to buy something as you’re a good citizen and patron of the arts and science and history. So you buy the snow globe without really thinking about what that money could have gotten you. You’ve made a mistake that seemed reasonable at the time, a nice, generous, if not good use of your money. But you’d actually value the book, the movie, and the lunch more than you would the snow globe. Maybe you’d even have been happier donating the $10 to the museum and then there wouldn’t be another worthless snow globe floating around the world which someone has to deal with when you die. 

Most people aren’t going to put this much thought into small purchases. Which is fair. Why? Because thinking has trade-offs! Why waste time thinking about your budget and the boundless opportunities $10 offers us in our modern society (two off-brand Jesus videos on Fiverr???) when you could just spend the $10 and the first thing that catches your fancy and go think about something else like various pronunciations of “either”. 

*****Apologies to every economist who is now very upset with my explanation of Opportunity Cost*****

There’s no such thing as a free lunch. That adage is the gist of economics. Honestly, if you get that, really get it, your economics education is a complete success and you would probably do well somewhere in middle-management. Yeah, yeah, economics is the management of scarce resources, supply and demand, blah blah blah. But really, there’s no such thing as a free lunch (some economists disagree with this…but it’s all semantics). 

There’s always something else you could have done, there’s always an opportunity cost, there’s always a tradeoff. That free lunch is costing your time, your presence, it costs you all the other lunches you could have had. That doesn’t always mean the alternative was near as good a quality an opportunity but that still doesn’t make the choice easy or even right.

What does this lesson in basic economics have to do with anything? Well, I hoped it would be an illustrative reminder that governing involves trade-offs, a lot of trade-offs. Politicians and the public don’t want to talk about that, they don’t want to think about it, but it’s what is at stake, it’s the heart of good governance. 

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Politics can often have a reputation for being frivolous, trivial. Most of the bills put forth in our legislatures have no hope of being made into law, meant only as campaign fodder. Some of the most heated debates we have are often over things we made up, that are not real problems or points of concern, and do not involve actionable policy. The rest of our debates are over the same slim set of issues we’ve argued back and forth on for literal decades, offering the same tired arguments and the same (now outdated) solutions. It’s enough to make any normal person give up and walk away (I’ve done it several times because I’m extra normal). 

We’re electing representatives to manage and lead a government that has considerable power–though still less than most people think–over our lives, the lives of future generations, and the future of our state. This is serious business. Every decision to fund or not fund one program or another, a program on housing or relief for hunger, building a bridge or inspecting existing infrastructure, lives are literally on the line. This isn’t a game. People die. People will die, people will suffer, livelihoods will disappear, people will be pushed into poverty. 

This isn’t me saying let’s have a big, well funded government. There’s only so much revenue the government can collect, so much administrative capacity to handle every program, so many skilled people to put on each project. And taxes collected are funds removed from private enterprises, from personal use. A dollar in gas tax is one less dollar for someone to spend on groceries. Employees brought into the public sector are people who would otherwise be working in the private sector or the non-profit sector. Every dollar spent on public education is one less on infrastructure, one less on healthcare, one less on research, on capital investments, and fighting crime. It all comes at a cost, all of it. There is no free lunch. 

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And here’s the really hard part. None of us have any clue what the best allocation of our planet’s resources are. We’ve spent tens of trillions of dollars on anti-poverty programs in the United States since LBJ declared war on poverty. That money has been put to good use, it has greatly alleviated the poverty and its associated ills for much of the country. But life remains miserable for many, poverty persists and many feel their lives are growing more precarious, that they do not have the opportunity for something better. Deaths of despair, deaths from suicides and drug overdoses, have risen precipitously. 

The trillions we’ve spent on healthcare saved lives, it saved hundreds of thousands of lives. Because the US government helped pay the costs so that people could get the care they needed. But what if we put that money into developing treatments, training doctors and nurses, building medical facilities? Things that would have lowered costs for everyone, made healthcare affordable for millions of people, made novel treatments available years early. Different lives would have been saved. Maybe more, maybe fewer. It may have lowered costs long-term, allowing the US government to deliver the same amount of healthcare subsidy today at a lower cost, meaning more money in the budget for other programs. Would that have been better? 

Maybe if we spent more on infrastructure, education, and economic development, the decline of industry and manufacturing would not have hit so hard, not have devastated so many communities across the country, not have caused so many suicides and overdoses. If the cost of healthcare and poverty relief for so many in the 60s, 70s, and 80s was all the death and suffering we experienced in the 21st century, can we say it was worth it? 

All else equal, can we say with certainty that the trillions we spent on the war on poverty couldn’t have been better spent on different programs or with a different approach or left in the hands of the private enterprise and individuals? These were well meaning programs that aimed only to help people. And maybe they really were the best use of resources, maybe they did the most good for the most people (and who is to say that doing the most good is the most desirable thing anyway?). But it came at a cost. Money went into these programs and not others and that choice meant other lives and livelihoods lost. 

I know that this is true of everything. We choose to frequent one store instead of another and that ripples through the economy, redirecting resources. A moment of carelessness in our day to day lives can cause an accident that ends a life. And that is just existence. We can’t control anything, and yet we’re constantly influencing everything. We all choose to weigh and carry the burden of our own autonomy differently. 

I’m not telling you to worry about small things. I don’t or at least I try not to. I only meant to illustrate the surprising nature of causality and opportunity cost, to give you a sense of the intuition for thinking in terms of trade-offs. I want you to know that it’s not good enough for a policy to be good, it has to be better than the next obvious alternative. When someone disagrees with your proposal to increase state funding to public schools, it’s not because they hate education for poor children. It’s because they think there’s something more important, and they might not be wrong.

We all want people to have healthcare and be healthy, we all want people to get an education, we all want to eliminate poverty. We all want to have a better society where people are happy and prosperous. We like to pretend otherwise, we like to insist that the people who oppose our obviously good plans for making the world a better place are evil, malicious, have an agenda, and are willing to make others suffer for their own greedy self-interest. Okay, it would be naively optimistic to say that wasn’t sometimes the truth, people can be corrupt, greedy, and hateful. But that’s not the truth on the whole. People are good and want the best for others. 

We disagree on the best way to a better world. And we present strong (if not always well reasoned or thoroughly researched) arguments why the path we offer is best. But we don’t know and can never know, truly, who is right and who is wrong. We can only try our best. In this diatribe I am not offering a prescription for a better world. Just a plea for consideration. 

Call this a modest admonition. To politicians most of all. Because if you find yourself in a position of some power, where you might be able to direct the fortunes of hundreds or thousands or millions of people, you should consider your moves carefully. There are consequences to every action and inaction. Trade-offs that make it so no matter how good your cause, it’s costing something to someone. 

 Don’t toy with people, don’t play around with their lives, understand that for many life is a precarious thing. I’m sure sticking zealously to some convoluted ideology is what got you into office but believing in insane, demented politics was a luxury you could afford when you had no ability to act on them. I want you to reflect. I just want you to understand the gravity of your decisions. That though you may feel insulated from the reality of what you do, lives are in your hands, do right by them. Do what you can. 

Politics can be trivial. The news tends to cover the horse race, controversy, and anger in part because these are simple things to explain and analyze in news mediums. It’s what excites people. It’s what people focus on. You can see easy cause and effect and decide who to blame. This is not a game, even if it plays like one.