>So? Does that make it wrong, just because the neoclassicals believe it?
almost. except "even a stopped clock is right twice a day." seriously, I thought it was just worth pointing out that it is a core part of the mainstream story and conception. I think that is of interest, even in itself. But it also means that much ink has flowed on this, both in support and contra. There's a good scene from Dickens' Hard Times on 'Time is Money.'
>Or maybe you are somehow constituted so that, although your life is limitred,
>you have infinite amounts of time to waste, so it's no skin off your nose if
>you have to spend your working life doing something unpleasant that is also
>no help to anyone else?--jks
non sequitur? or just wrong? first, even if the only alternative to the 'opportunity cost' view were the view that we have 'infinite time to waste', which it is not, one could still be against being compelled to engage in 'unpleasant' activity.
anyway, in the opportunity cost view, when you have three hats to choose from and you choose the blue one, the most important thing is that you *can't* wear the yellow one or the green one (actually you could wear three hats all at once. question: would that be 'rational'?). The emphasis is on what you have to 'sacrifice.' I think there are important epistemological and ontological implications here.
By the way, this is one of the reasons why neoclassical models have to assume full employment of all resources. Neoclassical prices are 'scarcity' prices, and if there are unemployed resources, resources are not 'scarce' in this sense. This was one of the huge implications of Keynes's theory.
By the by the way, a student once said they heard most human beings only use about 5% of their potential, so doesn't this mean that we are always way, way inside the production possibilities curve? (the outward bow of the PPC represents the "law of increasing opportunity cost," the flip-side of the neoclassical [not Classical!] "law of diminishing returns").
>
>Justin sez:
> >The other limit is time. Human effort is itself scarce in the sense that
> >each of us can only put out so much of it in our limited lives, so that
>if
>
>this is the penultimate neoclassical position underpinning the notion of
>"opportunity cost." (I'm not saying that is Justin's purpose or position,
>just
>that "time" is the ultimate scarce resource for neoclassicals.) Even if
>nothing
>else were 'scarce', the fact that when you are doing one thing you are not
>doing
>something else means that 'decisions have to be made'--decisions about
>'allocating' scarce resources among alternative uses, or 'competing ends.'
>It
>is often presented as a Robinson Crusoe story. Lionel Robbins is the
>classic
>reference.
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