If you are utterly powerless, with no money, skills, status, or friends, survival already takes all your time and energy.
Yet I’m not in that situation — and you’re probably not either. Our circumstances surely vary, but we have at least some power — we can pump towards certain outcomes, to some extent. And with even a modicum of power comes constant opportunity cost.
Whatever we’re doing with our power, we could do other things. And opportunity cost measures the “value” of these other things, based on our preferences. So if you have ten dollars to donate, giving it to a particular homeless person means that you won’t be giving it to another one who stays in the next street, or to a NGO. Same if you’re using your ten dollars to buy a cake, or invite a friend to (cheap) dinner.
Now let’s factor in two additional facts:
We live in a Dark World, where people die and suffer all the time, and the whole species and planet is at stake from multiple threats. The kind of world where we need to gather massive amounts of power in various forms to be able to solve these issues.
Opportunity cost grows with power. Because you can pump more outcomes more reliably, there are many more good things you could bring about by using that power differently. You’re throwing away many more potential goods when you make a decision.
This leads to a massive psychological problem that I’m learning to deal with, and which threatens anyone who cares enough to tackle important problems: opportunity cost blackmail. Because each choice condemns so many good potential actions, pain and guilt hunt me at every choice, from the smallest to the largest. It’s not a massive panic or a tremendous horror, merely a constant trickle of suffering, an infusion of damage that seeps into your very core. Even when I reflectively believe I made the right call!
If it was merely pain, and nothing else got impacted, then although sad it wouldn’t be that much of an issue (at least for me, based on my personal preferences). But it’s far worse than that: opportunity cost blackmail castrates you, it makes you actively weaker and less able to contribute. You become indecisive, change your mind all the time, or take damage each time you make a sensible decision, just because there is this background pain of the opportunity cost you’re leaving on the table. You slow down, burn out, lose time to your guilt, while the problems become more pressing by the minute.
As James Clear puts it:
A practical definition of opportunity cost: If you spend too much time working on good things, then you don’t have much time left to work on great things.
Understanding opportunity cost means eliminating good uses of time. And that’s what makes it hard.
And let’s be painfully honest here: “good uses of time” includes literally saving people’s lives. If you have enough power, you can intervene on a lot of individual cases, and save people from almost certain death. And whatever else you’re doing, even if it is the right call based on your preferences (for example it leads to saving more people in the long run), means you’re not saving these people.
For example, every time you take a break, you let people die. You let many bad things happen and many problems pile up. Yet by resting adequately, you become able to tackle far bigger and harder problems. Both these things are true. Both are facts you need to grapple with if you want to become stronger and help save the world.
What’s the solution? To detach the grim-o-meter. To still see the Dark World, and know the cost so you can make the best decision you can; yet not suffer for all the things you did not do in order to do what you thought was the best. I am working on reaching this level, but I still regularly suffer from opportunity cost blackmail.
That’s one of the psychological problems I need to tackle in this new year, so I can truly optimize.
If you heard “good is the enemy of the great”, then also consider “perfect is the enemy of good”.
Have you factored in the cost of task switching and meta-strategy research? A lot of economic theory trivializes the energy required for thinking, which might be correct for larger entities, but it’s an important factor for individual humans.
Switching to a different worldview and re-evaluating your options takes a non-negligible amount of mental energy. Learning about new opportunities and hearing new strategies also takes time. If you’re optimizing for doing good instead of collecting opportunities, then there could be a point where just doing your current best is better than the expected values of new ideas if you add the processing costs into them.
If you have 10 kinda good options and are suffering separately from the 9 things that did not get done that surely is a problem. But I don’t think what is normally implied by opportunity cost has that pattern.
If you are doing something awesome and you get the option to use the same time to do something less awesome I think it would be proper to feel like passing up an opportunity to shoot yourself in the foot rather than letting money lay on a random small street.
I know it is rather not a proper thing but consider “the opportunity cost of opportunity cost”: in order to do that other thing you need to stop doing the good things you are already doing. Asking “Is it worth it to clean a street” feels different than asking “Should I stop putting out this fire in order to clean streets?” . So there are no free lunches, even if it feels like it you need to trade-in your existing lunch. If you are choosing from a menu of 10 dishes it is not like you are recieving 10 plates of food at the moment. So you are not losing the 9 because you never were having them. At most the cost of bad choice is how much the options vary. Dealing with options that are of value 0.7 and 1.0 but you don’t now which is which is limited to suck only at 0.3. If you feel negative to the extent of 0.7 something is going overboard.
Opportunity cost properly points to different thing. If your investment only makes what you have interest rates would have made you, it was ambivalent whether you should have ventured into it. If your company makes a bit above and you restructure and hit the same level that is not an improvement. Having more inferior investements you could have ventured or improvements you could have tried does not make the opportunity cost go up (it does not measure “the value of everything missed” but “value of missing everything”).
There’s something extra which is closely connected with this: The time and motivation of central nodes is extremely valuable. Burning the resources of people who are in positions of power and aligned with your values is much more costly than burning other people’s resources[1], and saving or giving them extra resources is proportionately more valuable.
People who have not been a central node generally underestimate how many good things those people would be able to unblock or achieve with a relatively small amount of their time/energy/social favors that simply don’t get done because they’re making hard trade-offs. Finding ways to buy central nodes more time by finding things they’d love to do but don’t have the bandwidth to do themselves or even manage other people in any detail and stepping up to do a good job of it is one of the best ways to contribute for many people.
For example, I noticed that the LW tag portal entry on AI was missing many of the recently created tags about a year ago, and after making a bunch of other contributions to less sensitive tag-wiki pages I brought this up with the LW team and they gave me access to keep it updated. I’ve been doing that, and taking a small load off the team while maintaining something which should obviously be maintained.
Energy is more often the limiting factor than time, so if a central node gets a motivation boost from mentoring you this can be great. Don’t avoid talking to central nodes and trust them to manage their own time, just don’t pressure them to talk to you if they seem like they don’t want to continue the conversation. It’s almost certainly not personal, they just have 10 other high value things they could be doing.
So, basically this comic: https://www.smbc-comics.com/comic/2011-07-13
Also what that other user said: the opportunity cost is only the next best thing you could have done, not all the alternatives.
The older I get the more I’ve noticed the power of opportunity cost. I think it’s the result of a few things:
I have more experience with the value of my time
I have greater urgency because I better understand my time to be productive is limited (barring big changes that will let me work longer)
I have enough training and experience to reasonable get more value from spending more time exploiting than exploring
I see the topic very much related to regret. Dealing with opportunity cost doesn’t bother me much, and I suppose that’s because I don’t live with regrets. I know that at each moment I did the best I could. If I could have done something else I would have. Counterfactuals aren’t real, per se: they’re things we use in our head to reason about causality. We only can and only will ever do one thing, and that thing will be the best thing (and the worst thing!) because if we could have done literally thing else we would have. So I just accept that I don’t exactly know what’s going to happen, but I’m here for the ride of whatever amazing stuff this person I am gets up to.
I can’t help but notice that if for you “nothing else could have happened than what happened”, then your definition of “could have happened” is so narrow as to become trivial.
Rather, I think that by “X could have happened in situation Y”, the laymen mean something like: even with the knowledge of hindsight, in a situation that looks identical to situation Y for the parameters that matter, I could not exclude X happening”.
Now let’s factor in two additional facts:
-- are these facts though?
I see this a bit on here, a kind of rapid fire and then and then, and this is a fact therefore… when perhaps slowing down and stopping on some of those points to break the cognitive cage being assembled is the move.
Such as opportunity cost. We can make clear examples of this, invest in stock A means you can’t invest in stock B.
But in the world, there are plenty of examples that are not OR gates but AND gates. It’s not an opportunity cost to choose between providing clean needles to homeless drug addicts to reduce HIV infections OR giving money/time/effort to better HIV treatment drugs.
That situation is an AND gate, not an OR. Both are needed.
Calling it opportunity cost pits one thing against another when both made be needed, or neither, or a hundred things might be required. It restricts your thinking too.
As for James Clear—he doesn’t know what is good or great and it’s arguable that he doesn’t really know the answer here. That quote, which I’ve read before, sounds lovely but can also be trite and somewhat useless.
What is good, what is great? Can you know ahead of time?
The story of the man who has the wild horse come to his farm comes to mind. What good luck, a new horse for free! They put a saddle on it and the son immediately breaks his leg getting thrown off. What bad luck that horse is! The army marches through town the next day taking young men off to war. What good luck that horse was!
You can keep that story going endlessly.
The idea of opportunity cost in social or scientific progress is itself a flawed one because it is based on knowing what is good, great, bad, etc, and many times that cannot be known, certainly not ahead of time and sometimes not even retrospectively.
It may apply for stock A vs stock B but in reality it doesn’t to most things. People are fired from jobs and devastated and then because of their response or consequence of the firing, end up somewhere else in a far better position. Ahead of time they may have pondered the opportunity cost of taking that job, how they didn’t do X. Later on they may have bitterly regretted it. Much later on their wedding day with the person they met at their new job, they may think that firing was the best thing that ever happened.
Here’s another example: you want to end the prison industrial complex in the US. What should you do today? What is optimal? If you frame it in terms of opportunity cost, you needlessly harm yourself, judge yourself, and ultimately do worse work because you’re beating yourself up or spending a lot of time and effort trying to “optimize”.
You can’t know for example this path:
Some place bring in medical marijuana cards.
The regulation of them is a bit lax. Some doctors arguably commit a type of fraud by mass issuing of them but it slips on by for a while.
It becomes a bit of a social joke. It’s for my glaucoma.
The “drugs are evil!” message is diluted.
Public attitudes change as a result. Comedians are making jokes about it, it appears in movies and tv.
A state ends marijuana prohibition. Enormous sums of money are made for the state and business.
The public attitudes change even more over the years of all this money being made and no problems.
Pressure comes to bear as to why there are non-violent prisoners in jail for years on end for something that is completely legal now.
They are let out, records are expunged.
One of the key evils the private prison industry grew upon is systematically destroyed.
-- eventually you may see the private prison industry die and it all started from lax regulations over marijuana cards in some specific area.
Where I am in Australia, we have medical marijuana but not legal. The system is a bit lax though. So if I want to end the pointless war on drugs, where should I optimize my time? Perhaps the best use is advocating for some state in the US to legalise, such that it spreads and eventually is exported here. Or maybe it’s spreading how to get a card? Or writing another letter to the Prime Minister.
In this example, does the concept of opportunity cost even exist? If you were working on spreading the word of how easy it is to get a medical marijuana card vs protesting, which was the “optimal” move?
I would very strongly suggest that the idea of opportunity cost is broken in many ways and subsequent ideas that it grows with power are meaningless in many situations.
“For example, every time you take a break, you let people die. You let many bad things happen and many problems pile up. Yet by resting adequately, you become able to tackle far bigger and harder problems. Both these things are true. Both are facts you need to grapple with if you want to become stronger and help save the world.”
Such as this—I see it as an incorrect conclusion of highly flawed premises. Taking a break may result in people living because your efforts are pushing in the wrong direction. You cannot know and may never know.
As for far bigger and harder problems—I’d dispute that you can know this in many cases. You can construct arbitrary “great” and “good” for problems but you can be flat-out wrong. Great—we cure HIV. Good—we reduce it and delay it long enough that it’s effectively a cure. So are we sure that’s not two “greats” right there? Perhaps the only great is the long term delay for the seventy years it takes for technology to eventually provide a cure? Who are any of us to tell ahead of time?
I dispute that either of these things are true. They’re not facts, and you certainly don’t need to grapple with them.
Building a cognitive cage is easy to do and even easier to hand it to someone else.
What if the model is that 1000 switches need to be flicked? We know some of them but not others. We can’t know sometimes how many switches we will flick with our efforts. You cannot know for example that the most effective thing you ever do in your entire life is a drunken reddit rant at 1am next year because of the downstream impact it has on others.
All your optimizing and suffering and grappling and really the game was flick switches, or cause others to flick switches, or to talk or to listen or to participate in the great swell of water much the way an individual droplet of water is part of a wave.
There are models for how progress is made—organizing, spreading ideas, debating them, ways of thinking, and so on and of course persistent effort in a direction does appear to give results mostly.
But massively flawed concepts such as opportunity cost, which come from one discipline and then get shoved into another just turns thinking off, produces a kind of frantic worrying and delays action.
The other side of opportunity cost is the person who endlessly researches every option possible and cannot make a first step on any of them because they become hopelessly paralyzed.
Sometimes, rather than endlessly researching all the types of flour, it’s better to get out the bowl, put the flour, egg and milk in it and start mixing. Opportunity cost doesn’t apply there and even later if you retrospectively try to fit it, you can still be wrong because you can’t know the long-term future.
The entirety of Less Wrong, every post, every comment, everything that has come from it my end up being a single comment on one post two years from now that the GPT-6 researcher reads and makes them realize something. Everything else was meaningless except for that one comment.
How can you define opportunity cost in this?
One flaw with your argument though...
you seem to think it would be a good thing? Why?
How is that a flaw?
The harms of it are well known and established. You can look them up.
It’s beside the point however. Replace it with whatever cause you want—spreading democracy, ending the war on drugs, ending homelessness, making more efficient electrical devices.
The argument is the path to the end is convoluted, not clear ahead of time. Although we can have guideposts and learn from history, the idea that today you can “optmize” on an unsolved problem can be faintly ridiculous.
James Clear has zero idea of what is good or great and the idea that you can sit there and start crossing off “good” things in favor of “great” is also highly flawed.
Hence the examples of reducing HIV infection rates and reducing health consequences of infection. Not an OR gate but an AND and the idea of opportunity cost doesn’t really apply.
It feels rather funny when LW rediscovers the ideas of famous philosophers and acts as if they were the first to think about them.
Commenting here to explain how I voted on this comment (since it was unusual): downvoted the comment and agreed with it. I think the point stands that LW often misses things others have done and it’s worth connecting them, but downvoted for being snarky about it. Yes, reinventing things is a thing LW is notorious for, but I personally don’t want to see a social dynamic take hold like exists on sites like Hacker News and many subreddits where people become afraid to post because they’ll get harsh comments.