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Subjective preferences and alternative costs

Author

Listed:
  • William Barnett II

    (Loyola University)

  • Walter E. Block

    (Loyola University)

Abstract

The present paper is an exploration of the economics of subjectivism and opportunity or alternative costs. Most contemporary economists pay lip service to these concepts, but when push comes to shove, all too often they jettison them. We shall illustrate this lapse from basic economics with a challenge that has been perplexing several modern economists: why do people always walk on staircases, but only sometimes on escalators. Landsburg (2002) misunderstood the reason people only sometimes walk on escalators, whereas they always walk on stairs. Garrison (2009) tackled the same problem, with somewhat different results. Both of them, however, are guilty of a failure to use what is perhaps the most fundamental concept in the economist’s toolkit – opportunity cost, known to an immense number of non-economists by the aphorism ‘There’s no such thing as a free lunch.’ This oversight resulted in his (their) failure to explain why people only sometimes walk on escalators, in contradistinction to the fact that they always walk on staircases.

Suggested Citation

  • William Barnett II & Walter E. Block, 2013. "Subjective preferences and alternative costs," The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, vol. 6(2), May.
    • Handle: RePEc:bus:jphile:v:6:y:2013:i:2:n:2
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    References listed on IDEAS

    as
    1. Edward P. Stringham, 2010. "Economic Value and Costs are Subjective," Chapters, in: Peter J. Boettke (ed.), Handbook on Contemporary Austrian Economics, chapter 4, Edward Elgar Publishing.
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    Cited by:

    1. José Antonio Manuel Aguirre Sotelo & Walter E. Block, 2014. "Indifference Curve Analysis: The Correct And The Incorrect," Oeconomia Copernicana, Institute of Economic Research, vol. 5(4), pages 7-43, December.

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    More about this item

    Keywords

    indifference; opportunity costs;

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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