A Basic Theory of “Trade-Offs” – Tradeoffs and Opportunity Costs in the Different Areas of Life
It isn’t that we can’t “have our cake and eat it too,” it is that doing so is complex and involves trade-offs. It is really hard to literally eat a physical cake and expect it to be there afterwards, but we can cheat a little.
We can replace the cake, trading money for more cakes. Or we can charge admission to our cake eating, thereby actually increasing our money supply and thus increasing the amount of money we have to buy cakes… but that will be a trade-off of time and likely weight gain.
You can be very clever, but at the core of anything physical (and most things logical, ethical, and moral) there is a trade-off.
Balance, moderation, and the laws of physics are the laws of the land, it is very hard to get anything for “free” (one must always expend energy to do work).
The carrot on the stick is not meant to be eaten, but you can eat it.
It is just that, if you eat it, then there is no more carrot.
There are countless ways to express this, but knowing the basics should be enough for you to take the ball and run with it (yes, this page will use food metaphors; get over it).
According to Wikipedia, “a trade-off (or tradeoff) is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.”
Yep, that is about right. It is the trading of one thing for another, in economics it is money traded for a service, labor traded for capital, or a product traded for a product.
Can the slaver cheat by forcing their slave to work for free? Not really. This unethical horror isn’t cheating, it is just an unfair trade. Lots is being traded, it is just that the slaver is trading their moral value for capital acquisition.
The idea that the physical must always be traded for something physical isn’t exactly right. A bowl of food can be traded for an action, an action can be traded for an idea, etc.
I would express this as: While the rules of physics are constant, one can trade between the physical, logical, ethical, and moral.
Anyway, this is the ends of the rules of physics, the rule of biology and entropy, the rule of economics, the rule of time, and so many other physical rules.
We have to make trade-offs, and that includes trade-offs between policy and politics (the economics of politics).
Ideological absolutist solutions don’t tend to work, because if a person comes to the table offering nothing to trade, they are taking an absurd position which spits in the eye of the natural law.
Likewise, when a person comes to the table tactically offering to trade away something they never held (such as taking a position so extreme the middle ground is still toward your side), then the trade was simply unequal and the tactic rather unethical.
This isn’t a comment on morals and ethics though, it is just a simple realization that one can’t literally eat the cake in front of them and expect the same cake to still be there. It is not how the universe works. We can get clever, but the art of politics isn’t just the art of criminality and “the will of the stronger“, it is the aristocratic art of dealmaking, the art of the trade-off. To be a master, requires one to master not only the physical laws, but the logic, ethics, and morals as well.
When we discuss global trade, we can say fair market or free market, but the proof is in action. When we trade glass beads for gold, we make an unequal physical trade, when we make an unequal physical trade, we also trade away some morals, for we have traded away some degree of ethics. It always works like this, this is how trade-offs work in conjunction with the human condition.
The core virtue here is equity, no one respects a barter who doesn’t come to the table with some virtues. A barterer without principles is something lower than a gangster or caveman.
The true art of dealmaking requires an uncommon mastery of things, a mind for mathematics, a just spirit…. and a little bit of cunning.
This being a true principle of economics applicable to nearly all areas of life.
Tradeoffs and Opportunity Costs.