From: "Lane, Gina" <laneg@WILLIAM.JEWELL.EDU>
To: Multiple recipients of list NDT-L <NDT-L@UGA.CC.UGA.EDU>
Subject: more on opportunity cost
Well, I read part 2 of Korcok's essay and I decided I had to do some
reading of my own on the theory of opportunity cost. I've only
scratched the surface however. This is a long post -- skim for answers
to your own questions if you wish. =20
Limits on negative fiat: Opportunity costs authors indicate that the
notion of scarcity must be present (i.e. limits are placed on the
choices one makes). If choices are limitless, then it is difficult, if
not impossible, to measure opportunity costs. Therefore, one must
examine the initial choice and then examine alternative choices using
the same parameters. For most of the economists I read, this means
capital or other resources (see Raiklan and Uyar; Silver.) Principia
Cybernetica, one of Korcok's sources, defines OC as: "the advantage
forgone (sic) 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
those accepted.
I argue that a strict reading of opportunity cost literature would mean
that the negative fiat would only be constrained to the same limits as
the affirmative. This could essentially mean that the counterplan =
would
have to take a different action using the same agent and the same =
amount
of resources.
I also looked for economists' examples of opportunity cost in action,
and I tried to find those which would look at the real-world. Here are
some examples:
Think of decision-maker as (DM), choice as (C), and benefit as B.
example 1
city (DM) offers tax incentives to casinos (C1) in order to improve
business development (B)
city (DM) offers tax incentives to light industry (C2) in order to
improve business development (B) (see Goodman)=20
OC can only be measured if the same actor accrues the same costs using
the same resources. OC cost is measured by weighing the costs versus
the benefits of these two choices. The choices become mutually
exclusive only by the nature of scarce resources, which is a
prerequisite of OC.
example 2
woman (DM) decides to divorce husband (C1)
woman (DM) decides not to divorce husband (C2)
This study wanted to find out the OC to a woman's income after divorce
(Peters). OC is measured as the difference in present value of future
income streams that a married woman might expect if she were to stay
married rather than become divorced. It considered the following =
income
scenarios (advantages) after divorce: 1) remarriage 2) employment
income 3) welfare income 4) alimony income and 5) child support income.
It also examined the relevant costs of divorce, including: 1) loss of
children 2) loss of family income 3) duration of marriage 4)
Husband/Wife similarity of social characteristics.
The study concluded: women's income drops early after a divorce, but
returns to the pre-divorce level within 5 years after the divorce. =
The
reason? remarriage. (Somehow I knew that would be the reason). =20
example 3
RTC (DM) decides to take over failing thrifts (C1)
RTC (DM) decides to reprivatize thrifts (C2)
OC is defined as the estimated taxpayer equity cost of capital
expenditures.
Authors (Ely and Varadja) argue that RTC underestimated opportunity
costs of bailout because it did not take into consideration the =
expenses
of marketing and reprivatizing the thrifts. The authors conclude that
the time delays the RTC caused in their approach to thrift resolution
cost taxpayers much more than the RTC claimed because of the
noncalculation of these costs. =20
In these examples, the actor remains the same -- it is the policy which
differs. The scarcity parameter is fairly clear on example 1. On
example 2, the woman choice is an either-or scenario (scarcity in
choice), but there are different costs and benefits to her choices
depending on the outcome. Example 3 is interesting -- the RTC is the
single actor, but the authors include the taxpayer equity cost -- i.e.
the cost is borne by the taxpayer -- but as with most other USFG agents,=
the taxpayer foots the bill. The scarcity is the amount of budget =
given
to the RTC for this work and the knowledge that increased costs could
create budget reallocations.
In each case the actual choice (aff plan) is compared to alternative
choices (counterplans) but those choices are limited by the agent and
other relevant parameters.
Scarcity demands that choices must be mutually exclusive:=20
Principia Cybernetica's link to the definition of "alternative" within
its OC definition states this: An alternative is one of the mutually
exclusive courses of action for attaining the objectives. . . . By
mutually exclusive, we mean that the alternatives compare in the sense
that if A is selected, B cannot be chosen. A course of action that
combined A & B would be a new alternative." Thus the notion of
competition and even permutations are very closely linked to OC. (It
also seemed to be linked to systems theory - at least that was my note.
For more on the application of system theory to debate, see Pfau, =
Thomas
and Urlich).
What about alternate agents?
I argued in an earlier post that if the debate world couldn't give up
alternate agents under a O.C. paradigm, then some type of limits would
have to be recognized. Limits some of us already recognize would be
applicable: for example, neg limited to one agent. I get around the
"same agent" limit by arguing by analogy (the corporate-head) that the
U.S. (decision-maker) could decide that another agent would be better.
However, I argued that additional limits would have to be recognized,
i.e. alternative agents would have to 1) exist 2) be capable of doing
the policy 3) have propensity to do the policy.=20
=20
When I started reading Mike's part 2 and reread part 1, I started to =
get
worried when Mike said things like "Opportunity costs, properly
understood, are not subject to calculations of likelihood or =
propensity"
(part 1). This really messed up my limits on alternate agents. But it
also seemed to be inconsistent with some of his examples. However, as =
I
further read part 2, I decided I was still OK (for now). You see, it
didn't make sense to me that the propensity of choice existence could =
be
ruled out, but I believe Mike is referring to the propensity that a
choice would actually be made. Korcok writes: "Opportunity costs,
properly understood, are necessarily situated within choicemaking
contexts (systems?) where decisionmakers choose whether to take action.
A decisionmakers' own calculations of the likelihoods or probabilities
that the would choose one or another alternative are literally
nonsensical in these contexts" (part 2). This makes the "would v.
could" modality question fairly clear for me, and makes Lucius K's
"could" standard for counterplans pretty appropriate (good job Lucius!)
I keep arguing that choices must exist simultaneously or they aren't
choices. If we have to dissolve the USFG and then create an alternate
agent, that is not a choice. Mike's latest examples:
**In our discussions of whether or not Dallas will drink coffee or =
soda,
Mike agues the best alternative is Dallas drinks tea. =20
Damnit, what if Dallas doesn't have any tea?
**Spot runs. Spot walks. Spot takes a nap. =20
Damnit, what if Spot was hit by a car (arf!) and can't run?
The choice has to be an existing choice to the decision-maker at the
time, and negative fiat, if is isn't limited to the agent acting, must
be limited to a possible actor as argued above At least that creates
some scarcity of choice.
So what about Mike's big list of counterplans?
Well, here's my answer. =20
Any non-U.S. agents: Must prove exists simultaneously with U.S., must
prove capable with same or similar resources, must prove propensity to
act as negative would like. Not only does this eliminate utopian
counterplans, but it also eliminates "China surrenders," "India and
Pakistan choose peace" etc.
Fiating attitudes: I have no idea why negative gets to fiat attitudes
when affirmative doesn't. There is no propensity for "everyone to =
adopt
the ethic," "individuals to renounce violence" etc.
Voluntary actions: How does this co-exist with fiat? It is not
voluntary. Instead, the negative can fiat if it seems possible at the
time of the aff choice, that this choice could be made -- i.e. that a
certain corporation exists and has the potential and the propensity to
solve.
Alternate agents within the USFG: OK, but must demonstrate scarcity.
Exclusion CP: OK, but must prove exclusion could be considered.
***What about kritiks? (Mike challenged us for a cite -- here is a
specific link:)
Raiklan and Uyar argue:
OC can only be measured in a society where wants are different than
needs, such as a class society, capitalism, etc. Wants are never
satisfied, so some sacrifice is necessary. In a society where there is
no difference between needs and wants -- individual wants are =
sublimated
-- can't measure opportunity costs. (my paraphrase)
"Opportunity costs are dependent on an existence of a class society
because in a classless society there is no distinction between needs =
and
wants." =20
Looks like a socialism link to me.=20
Cites -- sorry, rather informal. My info is off the net -- mostly full
text articles off Infotrak. If you have trouble finding anything,
backchannel me. =20
Ely, David P. and Nikhil Varadja. Quarterly Review of Economics, Fall
1996.
Goodman, Robert. Wilson Quarterly, Autumn 1995.
Peters, H. Elizabeth. Economic Inquiry, January 1993.
Pfau, Michael et al. Debate and Argument: A Systems Approach to
Advocacy. 1987.
Principia Cybernetica -- on the web, I didn't write down address.
Should be on Korcok's bib. I found it pretty quickly after searching
for "opportunity cost" on Infoseek.
Raiklan, Ernest and Uyar. International Journal of Social Economics,
July 1996.
Silver, Gerald. Graphic Arts Monthly, January 1990.
This has been fun -- congrats for reading to the end. If I didn't
answer your question, infer an answer for yourself -- or ask me :)
Gina Lane
William Jewell College
Opportunities are still available for the Midwest Debate Institute.
Contact Greg Simerly at debate@siu.edu for details. =20
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