From: Michael Korcok <mk48@CORNELL.EDU>
To: Multiple recipients of list NDT-L <NDT-L@UGA.CC.UGA.EDU>
Subject: A Question of Terminology
The 1986 Nobel Prize-winning economist James M. Buchanan wrote in his
1969 classic "Cost and Choice" that:
"If we remain strictly within the predictive science of economics, cost
can be considered to be properly defined in most of the modern
textbooks, and there is little need to elaborate on these standard
definitions. This is the cost of the familiar textbook diagrams, the
objectively-identifiable magnitude that is minimized. It is the market
value of the alternate product that might be produced by rational
reallocation of resource inputs to uses other than that observed.... In
the strict sense, this theory is not a theory of choice at all.
Individuals do not choose; they behave predictably in response to
objectively-measurable changes in their environment. The distinction
between the concept of cost in the predictive context, as sketched out
above, and the concept of cost in a more general theory of choice... is
the direct relationship between cost and the act of choice, a
relationship that does not exist in the neoclassical predictive theory.
In the London-Austrian conception, by contrast, cost becomes the
negative side of any decision, the obstacle that must be got over before
one alternative is selected. Cost is that which the decision-taker
sacrifices or gives up when he (or she) makes a choice." (1)
Confusion animates economists' conception of costs and lies at the
heart of a controversy over the meaning of "opportunity cost." On one
hand is a conception of cost, sometimes equivocated with "opportunity
cost", which Buchanan identifies as "the concept of cost in the
predictive context". On the other hand is "opportunity cost" in the
context of a theory of choice and choicemaking: this is the concept
Buchanan identifies as "the concept of cost in a more general theory of
choice." Deciding which of these distinct concepts of cost is correct
is a precondition to evaluating actions for both economists and
policymakers. While this complex and technical dispute may seem remote
from debate theory, it is anything but that. This confusion lies at the
heart of the problem of negative fiat.
In debate theory, the legitimacy of negative fiat is contested with an
ultimately simple question: "Why should counterplans, actions which
have no likelihood or propensity, count as reasons to reject the
affirmative plan?" The correct answer to this question is: "Because the
real reasons to reject an affirmative plan are always opportunity
costs. Opportunity costs, properly understood, are not subject to
calculations of likelihood or propensity - they are coequal alternatives
for a decisionmaker choosing whether to take plan action." This is the
concept of cost in the context of a theory of choice -- the concept of
opportunity cost, properly understood.
As is often the case, debate theory has been here before. But the last
time this issue was publicly discussed, the wrong (and an incoherent)
interpretation of opportunity cost was at issue. Because Robert
Branham's 1989 essay "Roads Not Taken" seemed to conflate the two very
different conceptions of cost discussed above, it appeared that
calculations of "opportunity cost" necessitated rather than nullified
calculations of propensity. Roger Solt, in his 1989 Journal of the
American Forensic Association essay, "Resolving the Ambiguities of
Should" argued that:
"The most draconian limit proposed is that there should be no negative
fiat at all. The argument that there should be no negative fiat is one
which has been frequently made in intercollegiate debate over the past
few years. The theoretical basis for the no negative fiat position is
found in Branham's (1979) view of counterplan as disadvantage. The crux
of Branham's position, as I understand it, is that one foregoes the
opportunity to obtain the benefits of other competitive policies
(Branham, 1989).... What is at issue here is clearly a question of
terminology, but it is an important one. I believe that Branham uses
the term 'counterplan' in a rather different sense than is customary.
As commonly envisioned, a counterplan is a negative plan which is
offered to the judge as an alternative possessing coequal status with
the affirmative plan. (That is, the counterplan, like the plan, is to
be assessed purely in terms of its desirability, rather than in terms of
its political practicality.) The judge is assumed to have as much
ability to either adopt or endorse the counterplan as s/he is the plan."
(2)
If Solt correctly understood Branham's conception of "opportunity cost"
as entailing "no negative fiat" then what Branham grounded was a species
of disadvantage rather than counterplans. It is at best unclear that
Branham intended what Solt attributes to his writing. In any case,
opportunity cost, properly understood, does ground negative fiat and
thus counterplans in the manner they are normally understood.
This essay lays the foundations for negative fiat in the concept of
opportunity cost appropriate to choicemaking contexts. The two
competing concepts of cost at issue are first developed, then the
Solt-Branham misunderstanding of opportunity cost and fiat is examined,
and finally several arguments are presented grounding negative fiat in
the theory of opportunity cost, properly understood.
Is It Opportunity Cost Or Is It Opportunity Cost?
There is confusion in economics about the meaning of "opportunity
cost": with respect to questions of negative fiat, the outstanding
difficulty is the ambiguous handling of modality. James Buchanan and
other economists principally concerned with the economics of public
choice as well as the main tradition of opportunity cost theory
developed by the Austrians and the London School of Economics consider
"opportunity cost" as situated within choice-making contexts. This
understanding of "opportunity cost" commits to a "could" modality and a
typical definition of "opportunity cost" within the tradition is:
the value of the best alternative which could have been undertaken but
must be foregone if a posited action is taken.
Some economists, however, equivocate "opportunity cost" with a species
of "alternative cost":
the value resources used in taking an action would command in the
absence of the posited action.
This version of "alternative cost" as opportunity cost commits to a
"would" modality. The economics literature is filled with every
possible permutation and mixture of these two paradigmatic
understandings of "opportunity cost." Modality will be discussed
initially and then distinctions between these two very different
conceptions of opportunity cost will be developed.
Modality concerns possibility and contingency. English sentences
typically express modality by using a modal auxiliary verb. The
following examples illustrate a few different modal relations between an
agent and an action:
Spot may run. Spot might run. Spot must run.
Spot does run. Spot will not run. Spot should run.
Two modal auxilliary verbs, "would" and "could," are of principal
interest here. The modal auxilliary "would" typically expresses the
LIKELY or probable state of affairs, actions, or consequences given that
some condition obtains. The modal auxilliary "could" typically
expresses a POSSIBLE state of affairs, action, or consequence without
regard to likelihood or probability of that state of affairs.
The distinction between "would" and "could" is important insofar as
opportunity cost is concerned. If the preferred definition of the
opportunity cost of an action is
"the value of the action which must be foregone but WOULD be undertaken
otherwise",
then only actions which have propensity, that is, are "likely" or
"probable" in the absence of the posited course of action present
possible opportunity costs of acting. In debate, those are represented
by plan disadvantages. This modality does not provide any sort of
grounding as opportunity costs for actions which have no propensity --
they have no "likelihood" or "probability" if the plan is not
undertaken.
This way to understand the opportunity cost of an action is as the
value resources used in taking an action would command in the absence of
the posited action. Another way to say the same thing is to define the
alternative cost of an action to be the market value of the resources
required to take an action. The hallmark of these definitions is that
they either commit explicitly to or assume a "would" modality. A
typical definition of "opportunity cost" using a "would" modality and
equivocating "opportunity cost" with "alternative cost" is presented by
the Cybernetica Economica Website:
"Opportunity cost is defined as the advantage foregone as the result of
the acceptance of an ALTERNATIVE. It is measured as the BENEFITS that
would result from the next best alternative use of the same resources
that were rejected in favor of the one accepted. Opportunity cost is
difficult, perhaps impossible, to measure precisely. (IIASA)" (3)
These definitions of opportunity cost necessarily involve a calculation
of the propensity or likelihood or probability of the actions which
would be undertaken in the absence of a posited action: one must ask
what would be done if the action being evaluated were not undertaken.
This understanding of opportunity cost does not treat alternative
actions as subject to choice: one merely predicts or evaluates the
probability that they will occur.
If, however, the preferred definition of the opportunity cost of an
action is
"the value of the best action which must be foregone but COULD be
undertaken otherwise",
then actions which may have no propensity but which are nonetheless
possible in the absence of the posited action can present opportunity
costs of acting. In debate, those are represented as counterplans which
compete with the plan. This modality grounds at least some types of
counterplans by allowing actions which have possibility but which lack
propensity to count as opportunity costs of posited action.
The understanding of "opportunity cost" which emerged in the main
tradition of opportunity cost theory developed by the Austrian
economists and at the London School of Economics and which has been most
thoroughly developed by James Buchanan in "Cost and Choice" has
positioned "opportunity cost" within choice-making contexts. The
hallmark of this understanding is that it commits either explicitly or
assumes a "could" modality. A typical explanation of "opportunity cost"
in this "could" or "might" sense was presented by James Buchanan in
"Cost and Choice":
"Within a before-choice, or choice-influencing context, the
opportunities lost are those that 'might be,' as considered and
evaluated at the moment of choice itself and as reflected in the
presently anticipated value of utility losses expected to be incurred.
Within the post-choice or choice-influenced context, by comparison, the
opportunities lost are those that might have been enjoyed, as these are
reflected in experienced utility losses or sacrifices." (4)
This understanding of "opportunity cost" does not involve a calculation
of the propensity or likelihood or probability of alternative actions,
precisely because those actions are subject to choice. In this sense,
opportunity costs are always and only situated in choicemaking contexts
and they are "suffered" by decisionmakers. Since the only alternative
actions which are potential sources of opportunity cost are thus also
and simultaneously subject to choice, those alternatives are not subject
to calculations of propensity.
Finally, a simple example may motivate the difference between these two
different conceptions of "opportunity cost". For example:
posited action: Dallas drinks the coffee now.
most likely competitive alternative: Dallas drinks the soda now.
best competitive alternative: Dallas drinks the tea now.
Is the opportunity cost of the posited action the value of the action
which would be taken or the value of the best action which could be
taken if the plan is not done? If opportunity cost is understood in the
first sense (the value of the alternative that would be done in the
absence of posited action), then the answer is the disadvantage
represented by "Dallas drinks the soda now." If opportunity cost is
properly understood as situated in choicemaking contexts, that is the
value of the best alternative which could be chosen if posited action
were rejected, then the answer is the counterplan "Dallas drinks the tea
now."
Misunderstanding Opportunity Cost
Roger Solt wrote in 1989:
"I believe that the no negative fiat position which has emerged (at
least historically) out of the counterplan as disadvantage theory would
mean the end of the counterplan as we have known it. How tragic this
occurrence would be depends, of course, on how intellectually and
competitively valuable one believes the counterplan to be." (5)
Economists' confusion over the definition of "opportunity cost" may
seem hopelessly technical and remote from debate: it is not - it is at
the heart of disputes about the legitimacy of negative fiat. Roger Solt
understood Robert Branham's 1989 essay "Roads Not Taken" as grounding
counterplans in a conception of "opportunity costs" which utilized the
first, or "would" modality of "opportunity cost. Whether or not Branham
intends to do so, his use and development of opportunity cost" in "Roads
Not Taken" does not support this reading of "opportunity cost". There
are two basic reasons Branham does not delegitimate negative fiat in his
grounding of counterplans in opportunity cost: the idea of a "best"
alternative is nonsensical in the absence of fiat and at least a few of
Branham's example counterplans cannot reasonably be thought to have
propensity.
Robert Branham makes it clear that the opportunity cost of a posited
action is the "best" action foregone if posited action is taken. Branham
notes, for example, that:
"There are, however, several standard illustrations of the concept.
According to the notion of opportunity costs: 'The true cost of a
college education consists not of the tuition and fees paid, but of the
value attached to the best alternative uses (such as full-time
employment or investment) of the resources (primarily time and money)
devoted to it; The true cost of a city's decision to build a public
swimming pool consists of the value assigned to the best alternative use
of the designated land, funds, and labor involved;'" (6)
Even more pointedly, Branham argues that:
"Calculations of the opportunity costs entailed by a particular
decision depend upon the selection of the available alternative of
highest comparative value. As Wildavsky (1979) insists, it is 'only by
the value of the best alternative that must be foregone to undertake
such action' that an opportunity cost can be assigned." (7)
The "no negative fiat" position cannot logically coexist with an
understanding of opportunity cost as the "best" foregone alternative.
If there is no negative fiat, then the cost of an action is the value of
the alternative action which WOULD have been taken if the posited action
were not done. It is simply irrelevant whether or not the foregone
action that would have been done was the best, the worst, or simply a
mediocre alternative: without fiat, there is no choice among
alternative actions.
If Branham's grounding of counterplans in opportunity cost is meant to
argue that counterplans are literally disadvantages, that negative fiat
is not needed, then his example counterplans grounded in opportunity
cost make little sense. Branham argues:
"Counterplans defending socialism and anarchy describe their 'roads not
taken' as fopreclosed or forestalled by the implementation of the
affirmative programs or regulations. The unique benefits available
under such systems are presented as costs of the affirmative proposal."
(8)
There is no indication that Branham is under some illusion that
socialism or anarchy counterplans WOULD be chosen in the absence of plan
action. Even more perplexing if the Solt reading of Branham as arguing
the "no negative fiat" position is true is Branham's example of
exclusion counterplans:
"The issues raised by exclusion counterplans are sometimes
straightforwardly presented as disadvantages, weighin the costs of
overbreadth in legislative design. The exclusion counterplan is
designed to minimize the status of the affirmative plan itself as an
opportunity cost by arguing that most or all of the affirmative bnefits
can be gained through the counterplan, while avoiding undesirable
applications of plan authority." (9)
How it is plausible to think that an exclusion counterplan WOULD be
passed in the status quo is never explained by either Branham or by
Solt. Especially if the affirmative has argued inherency for the plan
as a whole, it is at best difficult to understand how an exclusion
counterplan might exist without negative fiat. That Branham contrasts
exclusion counterplans with disadvantages proper is similarly
illustrative.
In the previous examination of the relation between opportunity cost
and negative fiat, the wrong conception of opportunity cost was
examined. Whether it is Branham's or Solt's confusion, it is clear that
Branham's development of opportunity cost does not support a "no
negative fiat" view. In fact, Branham's understanding of opportunity
cost suggests that opportunity cost, properly understood, grounds
negative fiat.
Opportunity Cost Grounds Negative Fiat
Robert Branham wrote in "Roads Not Taken" that:
"Every decision involves forsaken alternatives. The true cost of any
action consists of the sacrificed benefits of the best available
alternative. This 'opportunity cost' is of fundamental importance to
economic and policy analysis, directing attention to the 'road not
taken' in a prospective decision. The counterplan is a form of
opportunity cost calculation, and opportunity cost theory best explains
the weight and operation of the counterplan in academic debate." (10)
In debate theory, the legitimacy of negative fiat is contested with an
ultimately simple question: "Why should counterplans, actions which
have no likelihood or propensity, count as reasons to reject the
affirmative plan?" This reasoning is extended by noting that in the
absence of plan action, the status quo will NOT take counterplan action
-- there is typically neither evidence nor inclination to show
propensity for counterplan action. There may even be evidence from the
affirmative indicating what the status quo will do and that it does not
involve counterplan action. It is simply the assumption that
counterplan action is taken which seems to "create disadvantages" to the
affirmative plan.
The correct answer to this question is: "Because the real reasons to
reject an affirmative plan are always opportunity costs. Opportunity
costs, properly understood, are not subject to calculations of
likelihood or propensity - they are coequal alternatives for a
decisionmaker choosing whether to take plan action."
In choosing whether to take plan action, a decisionmaker must evaluate
the costs and benefits of the plan. The worth of any action is its
value in comparison to its opportunity cost: the value of the best
action which must be foregone but could be chosen otherwise.
Opportunity costs, properly uinderstood, are necessarily situated within
choicemaking contexts, that is in situations where decisionmakers choose
whether to take action. A decisionmaker's own calculations of the
likelihoods or probabilities that they would choose one or another
alternative are literally nonsensical in these contexts. The
decisionmaker would be in the bizarre position of attempting to predict
what they would do if they chose not to take a given action rather than
choosing what to do if they chose not to take a given action. And that
means opportunity costs ground negative fiat.
1. James M. Buchanan, Cost and Choice, 1969, Markham publishing, pp.
42-43
2. Roger Solt, "Resolving the Ambiguities of Should, Journal of the
American Forensics Association, winter 1989, p127
3. URL= http://pespmc1.vub.ac.be/ASC/OPPORT_COST.html
4. Buchanan Cost and Choice p46
5. Solt p128
6. Robert Branham, Roads Not Taken: Counterplans and Opportunity Costs,
Journal of the American Forensics Association, Spring 1989 v.25 p249
7. Branham p250
8. Branham p250
9. Branham p250
10. Branham p246
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