Unless you are steeped in aspects of American history, or unless you are a science fiction fan, you will probably not recognise the expression TANSTAAFL. Robert Heinlein was a great science fiction writer. For science fiction aficionados, he will be mentioned in the same breath as Isaac Asimov and Arthur C. Clarke, perhaps even ahead of them, though Asimov and Clarke resonate much more with the general reader.
In 1966, Heinlein published a novel titled, The Moon is a Harsh Mistress. It was about a penal colony on the moon (Luna) and its relationships with earth. The third part of this novel is titled, ‘TANSTAAFL’, a favoured expression among residents of Luna, appropriately named Loonies. TANSTAAFL is actually an acronym and once expanded, everyone will recognise it. It stands for “There ain’t no such thing as a free lunch”, and is a phrase that is obviously typically American, originating from free lunches provided in US saloons to patrons who bought a drink. Salt in the food made diners thirsty and they ended up buying plenty of beer. In the process, saloons more than recouped their apparent loss.
In 1891, Rudyard Kipling wrote a series of essays titled, American Notes. The first is about San Francisco and Golden Gate and Kipling wrote, “By instinct I sought refreshment, and came upon a bar-room full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the “free lunch” I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts.”
What is economics? There can be alternative ways of defining economics as a bag of tools that provides an analytical perspective, rather than as one that provides definitive answers. The most popular of these definitions must still be that of Lionel Robbins in his 1932 essay on the nature and significance of economic science.
The bit that is quoted most often now is, “Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”
At the time, Robbins went into other possible definitions of economics and that oft-cited quote was preceded by another sentence. “But when time and the means for achieving ends are limited and capable of alternative application, then behaviour necessarily assumes the form of choice. Every act which involves time and scarce means for the achievement of one end involves the relinquishment of their use for the achievement of another.”
This is staple stuff for all economists—limited resources and choices between different policies, tradeoffs and opportunity costs. What’s spent on something cannot be spent on something else. Therefore, there are no free lunches. Everything that is free has a cost somewhere down the line, even if that cost tends to be hidden. Sometimes, costs are borne by future generations. As a bag of tools, that’s what economists highlight—long-term consequences and costs of short-term apparent benefits, with the latter outweighing the former.
It was natural that economists would latch onto the expression of there being no free lunch. Other than Heinlein, the person who popularised it the most is Milton Friedman. His 1975 book was titled, There’s No Such Thing as a Free Lunch. I am not sure who Pierre Dos Utt was, probably an economist. His name keeps cropping up. In 1949, he authored a slim monograph titled, TANSTAAFL: A Plan for a New Economic World Order. It was an obscure publisher and I haven’t been able to get hold of the book.
The best account appeared in the El Paso Herald-Post on June 27, 1938. (It is available in the archived form and the story is worth a read.) It is aptly titled, Economics in Eight Words and the story, as a fable, is about a great and wise king who ruled over a populous and prosperous land. “The width and breadth of his kingdom were measured in thousands of leagues.”
But suddenly, poverty descended and no one knew why this had happened. People starved and there was unhappiness everywhere. Here and there, within the government and outside, the issue was debated, just as commentators debate it today. Someone said—do this. Someone else said—do that. No one was very clear about what the solution ought to be.
“The king, seeing that his people were starving and distressed in the midst of plenty, called his wisest counsellors from the four quarters of the kingdom.” The advisers and counsellors debated and disputed, but couldn’t give the king a clear answer. The king threatened them with dire consequences unless they were able to draft “a short and simple text” to save the kingdom.
Something akin to a Planning Commission (in the fable, it wasn’t called that) was created and, after a year, the advisers produced a prescription that had 87 volumes with 600 pages in each volume. The king was disgusted and executed half the experts in the Planning Commission. More and more experts were executed. As more and more experts were executed, the volume of the prescription became shorter and shorter. Eventually, there was only a single economist left and, threatened with execution, he had to make the message as crisp as possible.
“Speak on,” cried the king, and the palace guards levelled their crossbows. But the old economist rose fearlessly to his feet, stood face to face with the king, and said, “Sire, in eight words I will reveal to you all the wisdom that I have distilled through all these years from all the writings of all the economists who once practiced their science in your kingdom. Here is my text: ‘There ain’t no such thing as free lunch.’” But the advice, if not the economist, always gets executed.
Bibek Debroy
Chairman, Economic Advisory Council to the PM
(bibek.debroy@gov.in)