Today's Quote of the Day...

…is from G. F. Thirlby’s 1946 paper in Economica, quoted on page 30 in the 1999 Liberty Fund edition of Jame’s Buchanan’s Cost and Choice (original emphasis:

The cost is not the things-e.g. money-which will flow along certain channels as a result of the decision; it is the loss, prospective or realized, to the person making the decision, of the opportunity of using those things in the alternative courses of action. A fortiori, this cost cannot be discovered by another person who eventually watches and records the flow of those things along those channels. Cost is not something which is objectively discoverable in this manner; it is something which existed in the mind of the decision-maker before the flow began, and something which may quite likely have been but vaguely apprehended…

Cost is ephemeral. The cost involved in a particular decision loses its significance with the making of a decision because the decision displaces the alternative course of action.

JMM: A concept oft-misunderstood in the study of economics is cost and its relation to choice. Costs, probably understood, are subjective. They are what alternatives face an individual when making a choice. They are not the monetary outlay, but rather the foregone opportunities at that point in time.