Reisman on opportunity cost
Reisman on opportunity cost
If I bought things for 10 and sold them for 20 did I earn a profit of 10?
– Yes, says common sense.
– No, says the economist, because you could have bought a bond that yielded you some return with those initial 10 then spent your time working for someone else instead of working in your sales business. If that yielded more money than 10 then you actually had a loss.
That is crazy, because it produces an economy in which everybody is always losing all the time, except one ideal person who makes all the correct investment decisions and thus has no opportunity cost. That person has a profit of zero.
– George Reisman in https://www.bobmurphyshow.com/139
Published at
2024-01-14 14:55:28Event JSON
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"content": "\n# Reisman on opportunity cost\n\nIf I bought things for 10 and sold them for 20 did I earn a profit of 10?\n\n-- Yes, says common sense.\n-- No, says the economist, because you could have bought a bond that yielded you some return with those initial 10 then spent your time working for someone else instead of working in your sales business. If that yielded more money than 10 then you actually had a loss.\n\nThat is crazy, because it produces an economy in which everybody is always losing all the time, except one ideal person who makes all the correct investment decisions and thus has no opportunity cost. That person has a profit of zero.\n\n-- George Reisman in \u003chttps://www.bobmurphyshow.com/139\u003e\n",
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