Opportunity Lost

You can't be in two places at once. That's a fact. But it's not a cost.


"Opportunity cost", from Wikipedia via Google:

In microeconomic theory, the opportunity cost, also known as alternative cost, is the value of a choice, relative to an alternative. When an option is chosen from two mutually exclusive alternatives, the opportunity cost is the "cost" incurred by not enjoying the benefit associated with the alternative choice.

See how they put the word cost in quotes? That's because opportunity cost is not really a cost.


I Googled the word cost. Not as a verb or action word, but as a noun, it means:

an amount that has to be paid or spent to buy or obtain something.

Straightforward, simple, and obviously correct.

In homage to relevance, I Googled define cost in economics. Wikipedia again:

Economic cost is the combination of and losses of any goods that have a value attached to them by any one individual. Economic cost is used mainly by economists as means to compare the prudence of one course of action with that of another.

Prudence. Dear prudence. Because every act is a "rational" act in economics. And every man is rational, everyone is prudent. But have you looked at the world lately? The world of politics for example, your world: No one is rational in that world. No one. It's easy to see it on the other side, not so easy to see it on your side. But both sides suffer this impairment of vision and this evidence of irrational behavior.

Under "People also ask" on that same page, from BusinessDictionary.com:

What is the definition of cost in economics?
An amount that has to be paid or given up in order to get something. In business, cost is usually a monetary valuation of (1) effort, (2) material, (3) resources, (4) time and utilities consumed, (5) risks incurred, and (6) opportunity forgone in production and delivery of a good or service.

and from EconomicsDiscussion.net:

What is the concept of cost?
In general terms, cost refers to an amount to be paid or given up for acquiring any resource or service. In economics, cost can be defined as a monetary valuation of efforts, material, resources, time and utilities consumed, risks incurred, and opportunity forgone in the production of a good or service.

See it? The word "forgone". The phrase "opportunity forgone". That's not the same as a cost.

I looked up "forgo". Seems to me there should be an "e" in that word, but Google tells me otherwise. Anyway: To "forgo" something means to do without it, like I have to do without the "e". You can see it as a cost if you want to, or maybe somebody can bullshit you into thinking it means "cost". It doesn't.

Go back to the definition of opportunity cost I quoted up top:

In microeconomic theory, the opportunity cost, also known as alternative cost, is the value of a choice, relative to an alternative.

And in particular, the sentence that comes next:

When an option is chosen from two mutually exclusive alternatives, the opportunity cost is the "cost" incurred by not enjoying the benefit associated with the alternative choice.

The phrase "mutually exclusive" means you cannot pick two things; you have to pick one or the other. However, the one you give up is not a cost. The simple fact is that you can only pick one of the two.

So you pick the one you want, knowing full well that you must forgo the other. But it's not a cost. So it's not an opportunity cost.

It's just an opportunity lost.


Cost is not hypothetical. Not imaginary. Cost is actual monetary cost: I'll give you a dollar to scratch my back. Or, cost can be actual and non-monetary, as with barter: You scratch my back and I'll scratch yours.

But if I'm lying on my back by the pool, checkin out the babes, I can't have my back scratched because I'm lying on my back.

That's not a cost. Not by any definition. Cost is what you have to give up to get the thing you want.

Cost is the value, usually the monetary value, of one side of a trade or exchange. In order to get my back scratched, I have to scratch yours. There is an exchange.

Or, I have to give you a dollar. There is an exchange.

I may have to give up lying on my back to get my back scratched, but this is not an exchange. It's just the way physical reality works. Besides, giving up lying on my back does not mean I will get it scratched. It only means that I can get it scratched because it's accessible. Physical reality. Nothing to do with exchange or trade. Nothing to do with cost.

I'm not giving up lying on my back in exchange for some scratching. Giving that up is not the exchange. It's not a cost. So it's not an opportunity cost.