Either as a result of calculated stubbornness or economic naivete, it seems so much of political and economic gridlock, in energy policy for example, is due to ignorance of trade offs (i.e. opportunity costs). Burning oil for electricity means dependence on petroleum stocks and the generation of greenhouse gases; burning coal for electricity means mining pollution and yet more air pollution; nuclear power means the slight risk of nuclear meltdown and the certain risk of nuclear waste; wind power means unsightly windmills and dead birds; hydropower means unsightly dams, changes to watersheds and fish spawning; and solar power means little power at great economic expense.

To someone schooled in even only basic economics, the concept of opportunity costs is unavoidable. Every action has an opportunity cost; there are trade offs for every decision we make. Ordering the lamb kabob means you won’t be able to have the chopli kabob. Spending time with your girlfriend means you won’t be able to get rowdy with the boys. As a rational agent you assess the perceived benefit of each outcome as well as the opportunity costs and weigh them all, resulting in a decision of action. Gretchen Rubin even identifies a specific kind of fun, “accommodating fun”, in which your choice of fun is made in the shadow of the opportunity costs you face by not dictating your first choice of fun.

Now politically, it might not make sense to highlight the opportunity costs of your favorite course of action. All your opponent has to do is ignore the opportunity costs of his favorite course of action and emphasize the fact that you acknowledge weakness. But once you get to the business of actually making a decision, its critical to acknowledge the trade offs of each course of action, and even the fact that every decision is loaded with these trade offs, these opportunity costs.

Until you acknowledge the various opportunity costs it is impossible to weigh them. Beyond the primary decision, without acknowledging the implied opportunity costs it is impossible to delineate which opportunity costs can be mitigated and how this might be done. Perhaps some kind of warning system can be developed for windmills to deter birds. Perhaps recycling nuclear waste will reduce the material available for potential theft.

The degree to which a decision making process identifies opportunity costs should be a good indicator of the maturity of the decision making system.