The concept of opportunity cost, to be operable, certainly depends crucially on
the ability to compare opportunities along some kind of scale or measure. It
assumes that the various costs and benefits are knowable variables. If it is
simply not possible to specify alternative options and their consequences in a
comparable way, we don’t get very far with evaluating opportunity costs. At
that point we only have a speculative hypothesis that there are opportunity
costs of some sort.
I proceed with the assumption that there is a “rational kernel” of truth in the
concept of opportunity cost, but, as often happens in social sciences and
humanities, a concept can be extended far beyond its appropriate limits of
application, so that its real function becomes more justificatory and
apologetic, than scientific (it hides as much as it reveals).
A concept should, I think, ideally speaking, not be asked to do more work than
it was really designed to do, or than its intended purpose really was. Of
course there are also cases of fruitful interdisciplinary transfers of
concepts, but they seem to be fairly rare.
I wasn’t aware of Michael’s discussion of opportunity costs in the Invisible
Handcuffs book, so thank you Michael. It is on my reading list, as well as the
Railroad Economics book.
Jurriaan
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