There ain’t no such thing as a free lunch


‘There ain’t no such thing as a free lunch’ (TANSTAAFL) is a popular adage communicating the idea that it is impossible to get something for nothing. The phrase dates to the 1930s and 1940s, but its first appearance is unknown. The ‘free lunch’ in the saying refers to the nineteenth-century practice in American bars of offering a ‘free lunch’ in order to entice drinking customers.

The phrase and the acronym are central to Robert Heinlein’s 1966 science-fiction novel ‘The Moon Is a Harsh Mistress,’ about the revolt of a lunar colony and the installation of a libertarian regime. Free-market economist Milton Friedman used it as the title of a 1975 book, and it is often mentioned in economics literature to describe opportunity cost (the value of the next best thing you give up whenever you make a decision). Macroeconomist Campbell McConnell writes that the idea is ‘at the core of economics.’

A ‘free lunch’ was a once-common tradition in US saloons, providing complementary snacks to patrons who had purchased at least one drink. Many foods on offer were high in salt (e.g., ham, cheese, and salted crackers), so those who ate them ended up buying more beer. Rudyard Kipling, writing in 1891, noted how he: ‘…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.’ TANSTAAFL, on the other hand, indicates an acknowledgement that in reality a person or a society cannot get ‘something for nothing.’ Even if something appears to be free, there is always a cost to the person or to society as a whole, although that may be a hidden cost or an externality. For example, as Heinlein has one of his characters point out, a bar offering a free lunch will likely charge more for its drinks.

According to biographer Robert Caro, Fiorello La Guardia, on becoming mayor of New York in 1933, said ‘È finita la cuccagna!,’ meaning ‘The abundance is finished’ or, more liberally translated, ‘No more free lunch’; in this context ‘free lunch’ refers to graft and corruption. The earliest known occurrence of the full phrase, in the form, ‘There ain’t no such thing as free lunch,’ appears as the punchline of a joke related in a 1938 article in the ‘El Paso Herald-Post,’ entitled ‘Economics in Eight Words.’ The article sourced the phrase to a fable about a king seeking advice from his economic advisors. The ruler asks for ever-simplified advice following their original ‘eighty-seven volumes of six hundred pages.’ The last surviving economist advises that ‘There ain’t no such thing as free lunch.’

In economics, TANSTAAFL demonstrates opportunity cost. Macroeconomist Greg Mankiw described the concept as follows: ‘To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another.’ The idea that there is no free lunch at the societal level applies only when all resources are being used completely and appropriately – i.e., when economic efficiency prevails. If not, a ‘free lunch’ can be had through a more efficient utilization of resources. Or, as computer scientist Fred Brooks put it, ‘You can only get something for nothing if you have previously gotten nothing for something.’ If one individual or group gets something at no cost, somebody else ends up paying for it. If there appears to be no direct cost to any single individual, there is a social cost.

Similarly, someone can benefit for ‘free’ from a public good, but someone has to pay the cost of producing these benefits. This is relevant to several issues in economics such as free riders (individuals who benefit from resources without paying for the cost of the benefit), moral hazard (a situation in which a party is more likely to take risks because the costs that could result will be borne by someone else), externalities (a cost or benefit that affects a party who did not choose to incur that cost or benefit), and the ‘tragedy of the commons’ (in which individuals, acting independently and rationally according to each one’s self-interest, behave contrary to the whole group’s long-term best interests by depleting some common resource).

In the sciences, TANSTAAFL means that the universe as a whole is ultimately a closed system. There is no magic source of matter, energy, light, or indeed lunch, that does not draw resources from something else, and that will not eventually be exhausted. Therefore the TANSTAAFL argument may also be applied to natural physical processes in a closed system (either the universe as a whole, or any system that does not receive energy or matter from outside). This concept is encapsulated in the Second law of thermodynamics: the state of entropy (disorder) of the entire universe, as a closed isolated system, will always increase over time. This is because energy is never created or destroyed, but can be transformed from one form to another (First law), and transformations aren’t perfectly efficient, therefore some energy is wasted in the process (i.e. lost as heat or light or other ways). As entropy increases in a system, there are fewer energy differentials and it becomes homogenized. Maximum entropy on a universal scale is called the ‘heat death of the universe,’ the theorized ultimate fate of the universe: thermodynamic equilibrium (no movement of matter or energy).

In finance, the term is also used as an informal synonym for the principle of no-arbitrage. Arbitrage is the practice of taking advantage of a price difference between two or more markets; a no-arbitrage situation is one in which no such difference exists, as all relevant assets are priced appropriately.

TANSTAAFL is sometimes used as a response to claims of the virtues of free software. Supporters of free software often counter that the use of the term ‘free’ in this context is primarily a reference to a lack of constraint (‘libre’) rather than a lack of cost (‘gratis’). Free software advocate Richard Stallman has described it as ”free’ as in ‘free speech,’ not as in ‘free beer.” The phrase has also been adopted and modified by a number of other people and groups. Among electrical engineering professors is phrase is ‘There Ain’t No Such Thing As A Noise Free System.’ ‘Baseball Prospectus’ coined the phrase ‘There Is No Such Thing As A Pitching Prospect,’ as many young pitchers hurt their arms before they can be effective at a major league level.


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