The Opportunity Costs of Time refers to a concept in economics that values the costs of anything by the other possibilities that are foregone by your present choice of spending time. For instance, if I spend time today washing my car, I could have been working, going to school, making love or doing any number of alternative endeavors. Each of these other choices entails a “cost” in terms of both money and my perception of the value of the time spent. Some things I can do will provide me more money either now or in the future and some things will provide me more pleasure. Some things will probably do neither (taking out the garbage) but they are necessary to prevent possible future unpleasantness or costs.

Here is an example from my life. When I decided to go to school to get my Ph.D. degree, a number of years ago, I gave up a decent paying job. My “opportunity costs” of going to school would include the following:

1. Salary for 4 years
2. Possible raises and promotions
3. Cost of tuition and books
4. Cost of loans
5. Interest on loans
6. Time to spend on more pleasant activities
7. Study time
8. Class time spent in some boring classes

If I were thinking rationally before I started my school program, I would have considered all of these costs and measured them against the expected benefits of getting my degree. As it turned out, I do believe that I came out ahead. The one factor that cannot be calculated in this mental effort is the “risk” factor for time spent. For instance, I wonder each time I go out and run a rugged trail if I will break my leg. In over 5000 runs, I have not broken my leg yet, but as they say “there is always a first time.” I try to compensate for this possibility by taking my cell phone with me when I go trail running. Two small problems I often encounter are, first, that I cannot get T-Mobile reception anyplace on my Ice Age Trails in Wisconsin and second, that I often forget to take my cell-phone holder. Thus, my risk factor escalates some.

It is interesting to think of Time as Risk. We often talk about time as money but the opportunity costs of time also imply a risk. For instance, I might not have been able to get a good job when I left grad school or I might not have found that my Ph.D. degree opened any more doors than before I obtained it. If we think about the idea of Opportunity Time rather than Opportunity Costs, it may provide a different set of insights into the activities we pursue. Another striking example of this concerns the oft given wisdom that the value of obtaining a college degree is worth the time spent beyond merely going to high school. However consider the following facts:

•Average net worth of a Forbes 400 member without college degree: $2.27 billion
•Average net worth of a Forbes 400 member with a college degree: $2.13 billion
•Percentage of Forbes 400 members with college degrees: 66%, without 33%.
•Richest self-made Americans without a college degree:

William H. Gates III
Harvard University, dropout
Net worth: $43 billion
Source: Microsoft (nasdaq: MSFT – news – people )

Paul Allen
Washington State University, dropout
Net worth: $21 billion
Source: Microsoft; Charter Communications (nasdaq: CHTR – news – people )

Larry Ellison
University of Illinois, dropout
Net worth: $15.2 billion
Oracle (nasdaq: ORCL – news – people )

Michael Dell
University of Texas Austin, dropout
Net worth: $11.2 billion
Dell (nasdaq: DELL – news – people )

The above facts can be found at http://www.forbes.com/2003/07/28/cx_dd_0728mondaymatch.html

When I look at the facts above, it makes me wonder what the real value of a degree is. It does not appear that it can simply be measured by monetary returns for the billionaires without a degree are richer than the billionaires with a degree. Perhaps, the real value lies in how confident it makes us feel or how much more literate and wise we are? If so, I have yet to see any evidence that going to college makes one either more confident or wiser. So we return to the Opportunity Risks of spending time. Here are some quotes that I like that reflect on this issue:

“Don’t be fooled by the calendar. There are only as many days in the year as you make use of. One man gets only a week’s value out of a year while another man gets a full year’s value out of a week.” – Charles Richards

“A man who dares to waste one hour of life has not discovered the value of life.” – Charles Darwin

Thus, I do not think that time can be measured as simply money or simply opportunity costs. I think we need to measure time as a risk and time as rewards and costs that go beyond monetary considerations. I am not making any money writing this blog today. I have been writing it for over two years now and have not made one dime yet on it. No one has picked me for a “reality” show and no one has called me up to be on the Oprah show. Nevertheless, I write these blogs and am sustained by the faith and hope that somehow each day or perhaps only once a month, I might make a positive difference in someone’s life. There is a great risk in my spending this time with this hope, but without hope and risk what would our lives be. If we can go through live and do no harm or do more good than we do harm, then we may have done all that is possible as a human being. The simple calculus of time as money or time spent on activities that pay a dividend reduces life to a pure equation with no emotion or no feeling. We are not automatons to be driven by calculators that measure the dollar value of every minute spent. I think we need more choices and a wider set of criteria in which to measure the value of the time we spend.

Do you spend your time well? Are you satisfied with the efforts and goals you have set for your life? Are you doing what you want to with your life and time? If not, why? When will you start making the choices that bring you joy and satisfaction?

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3 Comments (+add yours?)

  1. bgalbreath
    Dec 08, 2011 @ 15:37:51

    OK, so far as it goes. But it doesn't go very far. How much good or harm you or I do is in the eyes of the one making the evaluation. There are millions of people who, if they knew you very well, would sincerely judge you (or I) as a net harmful person merely because we do not live in their culture, that is, do not subscribe to the methods and standards of evaluation that they do. Even such frugal people as I believe both of us are use several times as much of the world's resources as the average person alive today, and that gives plenty of people reason to resent us. But we shouldn't feel bad. There is probably no one in the world that most people wouldn't see as a harmful blight, because there are so many incompatible ways of making the evaluation, each taken seriously by its adherent. We can't get along with some evaluation standard or other, but there are so many divergent ways of evaluating that each of them constitutes a tiny minority, at sometimes deadly odds with all the others.
    Or maybe I'm being too pessimistic. Maybe there is a unity behind the apparent divergence. Do all cultures share a common, compatible, underlying code? I don't know. (comment continues)

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  2. bgalbreath
    Dec 08, 2011 @ 15:44:10

    Still, thinking about what you do with the question “Am I helpful or harmful?” in the back of your mind may be a good thing, even if we cannot come to an ultimate, stable judgment about the matter. I honestly don't know if I've done more harm than good in my life so far. I'd like to think I have had a net posit impact on the world (as tiny as that impact may be), but everyone would like to think that, and just about everybody manages to believe it about themselves, I think. Even the monsters who send millions to horrible deaths feel sincerely justified in doing so because it creates some greater good that overbalances the harms (if those are even acknowledged).

    Whatever specific thing you do at a particular time rules out a large set of other things you might have done instead. The set may even be infinite, I don't know. But I (and you too, I'd guess) consider only a tiny handful of those seeming alternatives. We somehow rank order them and, if we deliberate consciously at all, pick the one that comes out on top by the evaluation standard currently operating. If we are rational (a big if) we have to do what seems to us the best available thing at the time.
    If I attempt to look at what I do as if from a distance, it is easy to question my own rationality. If I really am doing what I think best with my time, why is so much of it so unimpressive? Most of what I do has little to do with helping or harming other beings, or with creating something of lasting value, or even with creating something useful. I've spent most of my time haphazardly reacting to local events as they impinged on me. I've reacted in a way that strikes me as surprisingly unthinking for a supposed intellectual (again, looking at it reflectively from my current vantage point). I've never really pursued opportunities so much as did the best I could with whatever happened to cross my path. I can call that “trusting the process to unfold in a benign way, or as it should”, but, be that as it may, it's a comfortable lazy way to get through life that has perhaps served me well. I think of myself as a fairly happy, contented and satisfied person. If I had been less easily satisfied, perhaps I would have been driven to go further, to accomplish more, or even to do more good. But, somehow, that doesn’t bother me, or interfere with my enjoyment of my life. Maybe that just shows how depraved I am.

    Peter Singer, a contemporary philosopher, takes the idea that we should always do what is most helpful quite seriously. He thinks the most helpful thing most people could do is contribute to things like OXFAM. Going to a movie or having a restaurant meal are good things, but the money spent on them is potentially life saving in the hands of the OXFAM recipient, so we should give up the lesser good in favor of the greater. The life Singer recommends is to use your skills and time to make as much money as you can to donate, but only use on yourself the minimum required to allow you to generate the income, in other words, a very frugal, bare-minimum maintenance.

    Where, if anywhere, has Singer gone wrong? Almost no one lives as Singer says we should, not even him. He presents us with an ideal that demands perfection, a sort of secular sainthood. Do we owe almost all our time, money, and other resources to those whose need is desperate? Or is there room for enjoying other things?

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  3. John Persico
    Dec 09, 2011 @ 03:15:00

    In regards to your first comment Bruce, I am reminded up the comment by Mother Teresa who said “I am not called on to make a difference, I am called on to have faith.” I think there is a profound understanding in her comment that we may never know if we are doing more good or bad, more harm or not. However, we need to work as though we believe we can make a difference for the good and only history will judge us and even then history has misjudged (in my opinion) many people. Nevertheless, what are the alternatives? To do nothing? Try nothing? Take no risks? That is not living, that is being in the Jungle that Bhagwan Shree Rajneesh describes so well in his book “”The Path of Love.”

    As for your second comment, you ask “Where has Singer gone wrong?” I think he is judging what is good by his standards and asking everyone else to accept them. Only a God has this power. I personally do not believe that today I would be were I am were it not for the help, advice and support of too many people to name. At the same time, I do not believe I owe a single person in this world either one cent or one minute of my time. I do not feel motivated by debt or guilt. I try to act under the assumption that I can do a good deed by following a combination of looking out for myself and looking out for others. Not from a utilitarian perspective, but because I feel good when I can help someone else. Does what goes around come around? Often, but not always. I have a hard time teaching Ethics because I have not found a single system of Ethics that cannot be subverted into something unethical. However, I still believe that there are ethics and morals in this world. I try to believe in Kung's Global Ethics that there are more things we share than do not. This helps me to subscribe to both the Golden Rule and Platinum Rule. Each has value in their own place. It does get back to Mother Teresa's comment though and so I can keep trying. I don't think you can find a system of ethics that is based on rational dialogue. I could never be St. Peter because I would not know who to send to heaven and who to send to hell.

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