“I live this life at a pace that anyone can go. Know your place, and dedicate your role…To the faith that you’ll die alone.” — Kendrick Lamar, Musician and Pulitzer Prize Winner
The science of economics is the science of choice. In modern life, this choice involves how to spend the most precious resource of all — our time. This article explains the twentieth century concept of opportunity cost and how it can be applied to life choices most importantly to choose what to learn and what not to invest your time in. After all, the clock is ticking and we have not time to lose. We need to make the most of our time. However, the concept of opportunity cost is deceptively simple but it can seem counter intuitive at the time of making a choice. This is why thinking about life choices in terms of ‘opportunity cost’ is like common sense — uncommon to say the least.
The discipline of economics can be of tremendous utility when it comes to problems of abundance. The attention economy is a suppliers’ economy. Everyone from content creators such as Netflix to video game designers are vying for your time. We live in a world that is constantly on and scarcity is a thing of the past. How, then, should we make our choices? This is where the concept of opportunity cost comes in. While it is not a one size fits all solution, it is a great framework to help you think through life choices.
The Concept Of Opportunity Cost
In microeconomic theory, the opportunity cost, also known as alternative cost, of making a particular choice is the value of the most valuable choice out of those that were not taken. In simple terms, when you chose to do something, you give up something.
As per Wikipedia, the term was first used in 1914 by Austrian economist Friedrich von Wieser in his book Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economy). The idea had been anticipated by previous writers including Benjamin Franklin and Frédéric Bastiat. Franklin coined the phrase “Time is Money”, and spelt out the associated opportunity cost reasoning in his…