They Shoot Economists Don't They?

Economics can be confusing. We watch the news and see Robert Reich (former Secretary of Labor to President Clinton) sitting on his booster seat, expounding about the condition of the US economy. We read about Alan Greenspan in the newspaper, and he's either raising interest rates, or lowering interest rates, and somehow this affects the stockmarket, which affects jobs, which affects trade, which affects...oh who cares - the more important question is: How can George Clooney really leave ER!?

The following is a short, but handy lesson in economics. Clip out this valuable column, carry it in your pocket, and at your next cocktail party, throw out these terms and people will flock to your side and revel in your wit and wisdom. Okay, so people will probably run screaming in the opposite direction, but hey, that leaves more humus and pitas for you!

Definition 1: Opportunity Cost

The "scientific" definition of Opportunity Cost is the highest valued alternative forgone in making any choice. Left like that, it sounds rather confusing and you may say somewhat weird. You see economists are a lot like lawyers. They make up big fancy sounding terms, in the hopes that people will be fooled into thinking they know more than they actually do. Another way of looking at opportunity cost is to say, "The thing you're not doing (or buying) because you chose to do (buy) something else." Or as Milton Friedman would say, "There is no such thing as a free lunch." (You know I thought for years my mother made up that saying. Imagine my surprise when I found out she didn't make up that one or "I'll give you something to cry about!" Turns out everybody's mom said that.)

Here is an example of opportunity cost put to use. When you're cleaning the garage, you're not cooking dinner. The opportunity cost of cleaning the garage is the dinner that was not cooked. (And if you're my husband you consider yourself lucky!)

The Pope's recent visit to the US touched off a round of discussion about the paltry number of young lads willing to sign on with the Vatican as priests. It seems that your average, strapping, young Catholic male doesn't view the prospect of life long celibacy as an attractive thing. The opportunity cost of a life of serving God, in the Catholic church, is a life without children, grandchildren, and sex with anyone other than, well, oneself. (Now if you're Bill Clinton this could actually mean "sex" with many different people if you can just get the wording right.) For most of these faithful young men the opportunity cost is too high.

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