Some people who recognise the title of this post may now be imagining that I’m some right-wing cynical nut-job. Others may be wondering if I just dropped something on my keyboard. For those who don’t recognise it, it’s an acronym for ‘There Ain’t No Such Thing As A Free Lunch’. Don’t read too much into the double-negative - it’s for emphasis and not intended to cancel out to a positive. I first encountered the acronym in a science fiction novel I read when I was about ten years old (The Moon is a Harsh Mistress by Robert Heinlein) in which the ‘free’ lunch is given only if expensive drinks are purchased.

It’s important not to confuse the real meaning of TANSTAAFL for the cynical concept that ‘anything free is worth what you pay for it’. The ‘no free lunch’ idea is a basic concept in economics and is essentially the same as the first law of thermodynamics. It means you can’t get more out of something than has been previously put in. Very important: not more than you’ve put in but more than has been put in.

Of course, we’ve probably all had an apparently free lunch or something else of value paid for by someone else. In some cases the person or organisation who paid may have expected or hoped for something from us in return. Some of us may have received something of value as a genuinely free gift. It does not alter the fact that if you get something of value then someone (or more than one person) has paid for it. Free in this context is not at all the same as without cost.

So what’s the point of this Economics - (or is it Physics - ) 101? The point is that the principle of TANSTAAFL underpins everything. Some obvious examples include:

  • Central and local government spending is paid for by tax payers.
  • Insurance payouts are paid for by those who pay premiums.
  • Corporate profits are generated by the economic activity of the workers in a company.

So far so ordinary. But the principle still applies even though some seek an advantage by:

  • Evading paying taxes while enjoying state or regional benefits.
  • Making false or unjustified claims on insurance policies.
  • Short term investment in a company’s shares to manipulate the share price.

The point here is that a some people or organisations attempt to consume resources while providing minimal value in return; they really do understand the principle and are trying to ensure that the someone who ends up paying for their lunch is not them.

So, throughout the rest of my blog posts remember the TANSTAAFL principle. Everything of any value has to be paid for - and sometimes people try to get you to pay for their lunch.