Time is money. Your desk must be clean and your life must be in order, so that you’ll have time to drive your kid to his soccer match in western Ontario before the market opens and the price of Saudi crude allows you to double down on pork belly futures.
And you must find time to take a quick look at Banker & Tradesman, home to Cohen the Columnist and some other stuff.
You carefully read the advertisements, so that the publisher can brag about it to other potential advertisers. And then, of course, you savor Cohen the Columnist, as your allotted time for Banker & Tradesman winds to a close.
What of the other news and opinion strewn across the pages? It’s an interesting dilemma. There is “opportunity cost” to be considered. If you have budgeted a specific amount of time to spend reading the newspaper, any time spent away from Cohen is a cost to you. Those other stories and columns and data don’t come free; every moment you spend with them is a precious moment away from Cohen.
Life is like that. Time, money, opportunity is not limitless; a second spent or a dollar expended on “X” is time or money that could have been spent on “Y.” That’s why the economists invented the notion of “opportunity costs.”
The highest-value thing you give up in order to consume something else is called making tradeoffs in the real world – and you can attach a cost to the decision you make.
The folks that run from the room screaming at the notion of “opportunity costs” are the economic development types and other boosters of particular segments of the economy. They want us to focus on the care and feeding of whatever they are championing at the moment, with no thought given to the opportunity cost, that is, the alternative ways that we could spend the money.
The sports stadium cheerleaders make economists crazy, because the boosters offer up all manner of supposed additional revenue that would be created – without ever acknowledging opportunity costs. Money spent on a ticket and a hot dog and a beer at a baseball game is money that could be spent instead on a round of golf or a movie ticket or a seat at the opera, or a gratuity to your favorite columnist.
Let Them Eat Nothing
A new report from the New England Foundation for the Arts suggests that arts and culture outfits should be perceived as businesses, just like any other business, creating jobs and generating all manner of multiplier to help local economies prosper.
In bad times, the artsy-crafty folks don’t want to be perceived as a hobby for rich folks, so they trot out statistics forecasting how important they are to economic development.
The arts-and-culture folks are a bit more nervous than other boosters because of the Great Unspoken: opportunity costs. It’s not that a cluster of starving artists can’t generate economic activity. It’s just that an analysis has to be made: do we spend more philanthropic and public money on the arts, or do we use the extra dough to entice a steel mill or slaughterhouse to settle in town and create jobs that don’t depend on the texture of the tapestry? Do we fund the science museum, or do we use the money for a biotech research lab?
Of course, it’s not an either-or decision, especially in a large, prosperous metro area such as Boston, but boosters for any economic development slice of life never want to talk about opportunity costs, for fear that we build industrial parks and let the starving artists starve for a while.
The New England Foundation for the Arts is well aware of the competition for our dollars and attention. The foundation report suggests that the arts and culture nonprofits “spent” more in 2009 than the region’s entire paper manufacturing industry, “and nearly as large as the gross product of the region’s information and data processing industry.”
There. Starving artists versus mill workers or computer geeks. Who gets the money? Who gets the love? Opportunity costs are everywhere.
