TANSTAAFL
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http://en.wikipedia.org/wiki/TANSTAAFL
TANSTAAFL is an acronym for the adage "There Ain't No Such Thing As A Free Lunch," popularized by
science fiction writer Robert A. Heinlein in his 1966 novel The Moon Is a Harsh Mistress, which discusses
the problems caused by not considering the eventual outcome of an unbalanced economy. This phrase and
book are popular with libertarians and economics textbooks. Sometimes (in order to avoid referring to the
word "ain't"), the acronym "TINSTAAFL" is used instead, meaning "There Is No Such Thing As A Free
Lunch".[1]
The phrase refers to the once-common tradition of saloons in the United States providing a "free" lunch to
patrons, who were required to buy at least one drink.
TANSTAAFL means that a person or a society cannot get something for nothing. Even if something appears
to be free, there is always a cost to the person or to society as a whole even though that cost may be hidden or
distributed. [2] For example, you may get free food at a bar during "happy hour," but the bar-owner must
recover that marketing expense somehow, perhaps by charging slightly more for drinks or other food, and
even if you personally never buy those drinks or that other food, someone else has to or the bar will go out of
business.
It is thought that TANSTAAFL may not always hold at the individual level, depending on the interpretation
of the phrase; for example, some may argue that mothers provide their breast-fed children with milk at no
cost. But the mother in turn had to consume food to generate the milk, and this food had to be produced by
someone somewhere. Even though the cost is not paid by the children themselves, it is still paid by someone.
Indeed, it might be argued that the mother's body pays the cost of the child's meal (or even the plants or
animals whose lives were sacrificed to nourish the mother). It can be argued though that the mother might
have consumed the same amount of food anyway, meaning that the only difference to her would be that her
body mass and nutritional level might be different in ways that wouldn't affect her well-being, which would
make the example with the mothers milk a bad one.
Hence, it seems that if one individual is getting something at no cost, somebody else ends up paying for it. If
there appears to be no direct cost to any single individual, there is a social cost. Similarly, someone can
benefit for "free" from an externality or from a public good, but someone has to pay the cost of producing
these benefits.
The idea that there is no free lunch at the societal level applies only when all resources are being used
completely and appropriately, i.e., when economic efficiency prevails. But when inefficiency exists, one can
get a "free lunch". For example, microeconomics argues that the production of pollution may be inefficient
because the polluters are not forced to pay for the damage they cause. A tax or other program that forces the
polluter to internalize this externality would improve efficiency, increasing social welfare. In practice,
however, others who are benefiting from the inefficiency will use their political or social power to prevent
this tax. That is, the polluter may use lobbying and campaign contributions to preserve his or her ability to
freely pollute.
To a scientist, TANSTAAFL means that the system is ultimately closed — there is no magic source of
matter, energy, light, or indeed lunch, that cannot be eventually exhausted. Therefore the TANSTAAFL
argument may also be applied to natural physical processes. (See Thermodynamics.)
In mathematical finance, the term is also used as an informal synonym for the principle of no-arbitrage. This
principle states that a combination of securities that has the same cash flows as another security must have
the same net price.
TANSTAAFL is sometimes used as a response to claims of the virtues of free software. Free-software
supporters often counter that the use of the term "free" in this context is primarily a reference to a lack of
constraint rather than a lack of cost.
TANSTAAFL is the name of the student-run snack bar in the Pierce residential student dorm of the
University of Chicago. The name references the fact that the use of the term in economics was popularized
by Milton Friedman, the Nobel-Prize-winning former University of Chicago professor.
Citations
 In 1950, a New York Times columnist ascribed the phrase to economist Leonard P. Ayres of the
Cleveland Trust Company. "It seems that shortly before the General's death [in 1946]... a group of
reporters approached the general with the request that perhaps he might give them one of several
immutable economic truisms which he had gathered from his long years of economic study... 'It is an
immutable economic fact,' said the general, 'that there is no such thing as a free lunch.'" [1]
 "Oh, 'tanstaafl'. Means 'There ain't no such thing as a free lunch.' And isn't," I added, pointing to a FREE
LUNCH sign across room, "or these drinks would cost half as much. Was reminding her that anything
free costs twice as much in the long run or turns out worthless."
o Manuel in The Moon Is a Harsh Mistress (1966), chapter 11, p. 162, by Robert A. Heinlein [2]
 "There's no such thing as a free lunch.”
o popularized by economist Milton Friedman [3];
o Contrary to rumor, New York Mayor Fiorello LaGuardia did not say it in Latin in 1934; what
he really said, in Italian, was "No more free lunch" (current references: linguistlist and a speech
by George H. W. Bush; more references needed).
 The book TANSTAAFL, the economic strategy for environmental crisis, by Edwin G. Dolan (Holt,
Rinehart and Winston, 1971, ISBN 0-03-086315-5) may be the first published use of the term in the
economics literature.
 Malcolm Fraser, prime minister of Australia, was a fond user of this phrase.
 In the early 1980s, TANSTAAFL was the name of the newsletter of the Republican Party of Minnesota
“The way to wealth is as plain as the way to
market. It depends chiefly on two words,
industry and frugality: that is, waste neither
time nor money, but make the best use of both.
Without industry and frugality nothing will do,
and with them everything.”
~ Benjamin Franklin
"Many people think that by hoarding money they are gaining safety for
themselves. If money is your ONLY hope for independence, you will never have
it. The only real security that a person can have in this world is a reserve of
knowledge, experience, and ability. Without these qualities, money is
practically useless."
~Henry Ford