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Monday, February 03, 2020

On Free Lunches


I want to cull this from  page 2 of Greg Mankiw’s popular Essentials of Economics – used by hundreds of Econ 101 classes, tucked under the arms of thousands of students, who paid a hefty price for it:

You may have heard the old saying, “There ain’t no such thing as a free lunch”. Grammar aside, there is much truth to this adage. To get something we like, we usually have to give up something else that we also like.
I like to think of them, those thousands of scions of upper class households, products all of them of years of free lunches, nodding to this crackerbarrel truism. One of the great principles of education is to blind yourself to the self-evident. It is part of one’s self-fashioning, and it is especially useful as these scions go on to get positions in the upper ranks of management, investment, etc., and can look about them and say: I earned this.
By their truisms you shall catch them – this is the rhetorical ratcatcher’s faith. My faith, really. The crack in the neo-classical economics façade – the underpinning of that big neo-other, Neoliberalism – appears here.  If one looks deeply enough, many of the ideological decisions that go into the neoclassical model congregate around the idea that there is no free lunch – or as Mankiw translates it, there are almost always trade-offs.
The first and most important of those decisions is that the local difference between the person who pays for and offers the lunch and the person who eats it, free, is of no concern to economics. Thus, all sociology is given the bum’s rush at this banquet. The economist’s truth stops at the fact that if there is a free lunch, someone is paying for it, and that in the end, we are all someone. And it is true that if x is paying for y’s lunch, if we just move a level upward we can treat them as variables, so that y paying for x’s lunch is the same thing. But what if that move up the level is missing an essential fact – which is that there is always somebody paying for the lunch, and somebody eating it free? And what if there is a whole class of x’s who offer a whole class of y’s free lunch?

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