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Sunday, September 26, 2021

Opportunity costs

I’ve spent a lot of time over the past few weeks talking about money: spending it, saving it, bathing in it, etc. I have no say in whether money will bring about happiness or anything deep and cosmic like that, but it’s something that the majority of the population is in constant need of. Money to eat, money to go out, money to make it rain at the strip club, money to pay for the rent, money to pay for gas, money to pay for alcohol, the list goes onward to infinity.

There is the old adage of “time is money,” or the updated classic, “If I ain’t getting paid then I’m getting laid,” which are both venerable mottos to live your life by. But more importantly, they bring up an alternate currency that is just as valuable (or possibly even more so) than money: Time.

Time is an incredibly deceitful beast. In a morbid sense, I don’t think anyone in the world knows how much time they have, save for prisoners on death row and wizards, I guess. Even though one must put in time and effort to get money, the reverse does not usually apply.

A normal person cannot extend his or her life by sacrificing money. An ailing patient can gain a few more years by paying for a new wonder drug or undergoing a costly surgery procedure, but a healthy person cannot extend their livelihood by putting their head in a glass jar (à la Futurama) or putting their body in a robot. Not yet, at least.

How anyone chooses to spend their time is entirely left up to them. In economics, we have a concept called opportunity costs, that compare the tradeoffs between doing A or doing B. The special part about opportunity costs compared to most other tools in economics is that it takes into account measures other than specific monetary costs like forgone time or pleasures.

For example, one may think that the only opportunity cost to working a three–hour shift is three hours of said person’s time. But it also can be considered that it is time lost towards being able to do homework, to shower, to have sex, to watch a movie, to take a tour of a submarine, not all necessarily in that order, but you get the picture. So it boils down to whether those three forgone hours were worth the wage earned.

Of course, no one really has exciting things planned for every minute of their day and that’s why people are willing to work. Because otherwise, they’d realistically just spend those hours sitting on their asses surfing Reddit or something. The best of both worlds is getting away with browsing the internet whilst still getting paid. Boring office cubicle jobs can be nice after all.

There are opportunity costs to everything. Instead of studying for a midterm, you could be riding a tractor. Instead of going home for the weekend, you could take a road trip to Tijuana. It’s all relative on you and on how you value certain things. For example, I’d derive much more pleasure from just sitting in my bed and reading rather than biking to my job any day, but I’m obligated to go to work. Sometimes you’ve got to do the right thing, even if you have to forgo things you’d rather be doing.

I’m sure it’s a concept that most people would understand because nearly everyone would rather be doing something other than what they’re currently doing. Like I’m sure you’d rather be petting a dozen cute puppies than reading this column right now. Or that you’d rather be rich and comfortable living in a seaside manor instead of toiling away for a degree at this university.

Alas, we all can’t have what we want. That’s where money comes back into the equation. With the right amount of money, you could buy 12 dozen cute puppies, let them live in a seaside manor and simply visit the place and pet them whenever you’re feeling up to the occasion. I understand that some people don’t have such grandiose desires though.

Whether your aspirations be simple or grand, money and time are undoubtedly two great factors in whether they will come to fruition or not. Working on managing and balancing these two aspects harmoniously can lead to tremendous happiness.

ANDREW POH apologizes for his ridiculously corny closing lines. He borrows them from fortune cookies that he gets from Chinese take-out. If you have better ideas, shoot some his way at apoh@ucdavis.edu.

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