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The economic way of thinking about problems stands in sharp contrast to two other points of view, which l have labeled the
romantic and the monotechnic. The romantic point of view denies the existence of scarcity or blames it on some convenient scapegoat such as communism, capitalism, unions, advertising, or defense spending. Unfortunately, the problem of scarcity cannot be solved by denying its existence. For all our affluence, we still live in a world where our wants exceed our ability to fulfill them, and, so far as anyone can see, we always will.
The necessity for choice is part of what it means to be human_ The monotechnic point of view acknowledges scarcity, but seeks an optimal solution as defined by a particular technolo. This approach denies a role for the values of those who must bear he costs. For instance, a specialist in medicine (or in education) might understandably want to provide as much medical care (or schooling) as is technically possible, even though the resources required would be more valuable in some other use.
Helpful as it is, the economic perspective is only a partial one because people face problems other than scarcity. For instance, there is the problem of peace and order, both in the community and in relations with other countries. There are problems of learning, of socialization, and of human relations. Finally, there are problems of meaning, ethics, and aesthetics. The diversity of human problems makes clear the importance of many approaches—-political, sociological, psychological, philosophical, religious, and others. To avoid falling into a monotechnic fallacy of economics, we must remember that scarcity is only one aspect of the human condition. Economists are trained to deal with questions of scarcity, but we must not assume that scarcity is the only problem and that the most efficient use of resources is the only goal.

When thinking about questions from this perspective, there are five useful maxims to keep in mind:
1. There is no free lunch. This maxim does not deny the existence of altruism, but underscores the importance of the idea of alternative cost. Someone may provide a lunch that is free to you, but to the extent that the lunch requires labor, raw materials, and other scarce resources (and every lunch does), there is a cost
to someone. A good measure of that cost is the value of the best
alternative use of those resources as the poet Robert Frost said, “the road not taken.”
2. There is more than one way to skin a cat. This maxim reminds us that in most situations there is an alternative road; there is a choice. It also serves as a reminder that the “best” choice is not something to be decided only on the basis of scientific or technological data. These data are useful, indeed necessary, but they are not sufficient. A rational choice must relate the causeand-effect information that science provides to the values that come from the preferences of the decision maker. For instance, science may be able to tell us how much pollution results from burning a certain quantity and quality of fuel, what the physical and biological consequences are likely to be, and what the cost will be of achieving alternative levels of pollution. What science cannot do is determine the optimal level of pollution; that depends
on the values we assign to the consequences of alternative courses of action.
3. Nature doesn’t make leaps. This maxim, a favorite of the great British economist Alfred Marshall, reminds us that most
choices are made along a continuum -
“anore” or “    they’re questions of
less.” For instance, the decision about pollution will rarely be one of “yes” or “no” but rather “how much.”
questions that must be answered “yes”    Even
or “no” by the individual (to marry or not; to retire or not) can be analyzed as continuous
phenomena when studying the behavior of populations (the marriage rate; the retirement rate).
4. There can be too much of a good thing. This warns us that there actually can be too much medical care, too much education, too much of many things that are clearly desirable and useful. We
have too much of a good thing when it is pushed to the point where the cost (the alternative forgone) is greater than the benefit it confers. The quintessential element in the economic perspective is the idea of equality at the margin — that is, balancing the costs and benefits of the incremental or last unit of whatever is being evaluated. When choices are made along a continuum, the optimal level will be where the benefit of a small increment (the marginal benefit) is exactly equal to its cost. Beyond that level, costs usually rise faster than benefits; short of that level, benefits increase more rapidly than costs.
5. Time is money (or its equivalent). This maxim is relevant to the subjects discussed in this book in two ways. First, it reminds us that frequently an important part of the cost of some activity is the time spent doing it. For instance, the full cost of a meal prepared at home must include the value of the time spent shopping and cooking, as well as the money cost of the ingredients. Second, the maxim reminds us that when the cost or benefit of some activity will be realized in the future, a rate of time discount (or rate of return or interest rate) must be applied to obtain the present value of that cost or benefit. For instance, if two alternative occupations yield the same total earnings over a lifetime, but one of them pays more earlier in life, it will have a greater present value than the one that pays later because it affords an opportunity to earn interest on the differential earnings in hand. When alternative courses of action involve costs and benefits that occur at different times, rational decision making requires comparison of the present value of those costs and benefits. Sometimes both applications of the maxim will be relevant in analyzing a single activity, as in deciding whether to go to school now in order to increase earnings later in life. The current cost includes not only tuition, but also the value of the time spent in study. Because the benefits will be realized only in the future, a rate of time discount must be applied so that they can be compared to costs in terms of present value.

A constraint of critical importance for most people is wealth, or income-two alternative ways of describing a person’s command over material resources. Many choices are significantly affected by wealth, either the individual’s or the family’s, and there are other important resource constraints as well. Even the wealthiest person’s behavior is limited by the fact that there are only twenty-four hours in a day-that is, by the constraint of time (Becker 1965; Linder 1970). The analysis of choice within a framework of constraints is what economics is all about.
The economic perspective assumes that resources are scarce relative to human wants, that these resources have alternative uses, and that people have diverse wants, not all of which can be satisfied. It follows that the basic economic problem of every society, and of every individual, is to allocate resources so as to best satisfy wants.

Life, for most people, is not so much “a bowl of cherries” as a succession of difficult decisions. Consider a typical young woman entering her senior year in high school. During the years ahead she will have to make many important choices. Stay in school, or enter the labor market? Where to live? Marriage? When and with whom? Children? When and how many? How much labor force participation? How much work at home? And there are other choices, such as those concerning smoking and alcohol, that can profoundly affect her life and the lives of those close to her.
To say that this young woman will make choices is not to say that these choices are unconstrained, Unless she has great mathematical aptitude, a career as a theoretical physicist is not, for all practical purposes, a choice that is open to her. Similarly, it is not realistic for her five-foot six-inch brother to aspire to be a professional basketball player. The fact that choices are constrained, however, does not mean that all choice is eliminated. Individuals still choose, but within their constraints.

The concluding chapter summarizes the major themes and makes explicit my own views about policy. It offers some recommendations concerning social security, health insurance, child care, births to unwed mothers, and youth unemployment, al-though these specific recommendations are not central to the major objectives of the book. My primary aim is not to gain agreement with my judgments and values, but to provide readers with a clearer view of the facts, a fuller understanding of relation-ships between behavior and external circumstances, and a deeper insight into the issues and dilemmas of public policy.

This is not a textbook in economics; but because many readers are unaccustomed to looking at problems from an economic point of view, the next section introduces the economic perspective. The six subsequent chapters develop this perspective in the context of the life cycle, a constant of human existence. Institutions may change, empires may rise and fall, and entire civilizations may crumble: but everyone is born, most people mature, wed, and have children, and all eventually die.
The social and economic details of the life cycle vary, however.
In particular, the age at which various transitions take place has changed over time and differs among groups at any given time. Some transitions of great interest are the ages of entering and leaving the labor force, the age of parenthood, and the age of death. In this book the life cycle is divided into six stages: birth and infancy, childhood, adolescence and youth, young adulthood, middle age, and old age. Each chapter identifies major choices for persons of that age, describes long-run trends and cyclical variations, analyzes behavior, and discusses public policy issues. Al-though the approach is similar throughout, the substantive emphasis varies, depending upon which subjects are most salient at different ages-education for the young, for example, or health for the old.

This is not to say that numbers speak for themselves. Interpretations must be made, and, given the imperfections of theory and data, some scholarly disagreement about them is inevitable. For most questions about family, work, health, and education, I try to alert the reader to alternative interpretations and to indicate the degree of confidence warranted for the explanation under discussion. Thus the book offers less certainty than some would like, but does not shy away from making judgments, even when the basis for judgment is incomplete.
Despite the scope of the book, certain questions have been excluded. For instance, the causes of economic growth are not considered, although it is the basic cause of most of the phenomena under discussion. Neither does the book attempt to explain cultural differences in values, important though such differences may be in shaping behavior. Finally, no effort is made to explain individual differences. The contribution that economics makes to the understanding of human behavior is at the level of populations, not individuals. Its principal object is to explain or predict the behavior of aggregates or averages and to draw conclusions that are true in general, even though it is always possible to think of individual exceptions.

The last major theme concerns the conflicts and dilemmas that face public policy makers-the impossibility of reconciling all worthwhile social goals, These conflicts arise between highly valued goals such as efficiency and justice, and between different groups such as young and old. The distinction between allocative efficiency and distributive justice receives particular attention throughout the book. Economics has a great deal to say about the former, but the justice of any particular distribution of income cannot be established by economies. All public policies, whether they concern children or the elderly, health or education, work or family life, have effects on both efficiency and justice. The economic perspective can help clarify those effects, even though it cannot provide the final answers. These must come from our values – from our vision of the kind of society we want to shape for ourselves and for future generations.
In developing these themes the book presents many numbers, but no more than are necessary to help the reader understand and remember the points that are being made. “The office of the scholar,” said Ralph Waldo Emerson, “is . .. to guide men by showing them facts amidst appearances.” Numbers serve to discipline rhetoric. Without them it is too easy for a writer– or a reader to follow flights of fancy, to ignore the world as it is, and to “remold it nearer to the heart’s desire.”

The “demography and destiny” theme refers to the way changes in demographic variables such as fertility and mortality transform the circumstances facing individuals, thereby altering the nation’s social and economic course. Family size and Iife expectancy are two of the variables whose consequences we will examine in detail. The timing of birth is also important: men and women who reached adulthood during the Great Depression made decisions very different from those of youth who entered adulthood during World War II or the peacetime prosperity of the 1950s. Economist Richard Easterlin (1980) has emphasized that even variations in the number of young people reaching maturity can result in systematic differences in life cycle behavior,
The theme of “wanting and waiting” concerns the importance of delay of gratification, or time discount, in shaping the way we live, Almost every choice discussed in this book, whether pertaining to fertility, schooling, health, occupation, or other areas of life, involves comparisons between present and future costs and benefits. The willingness and ability of individuals to invest in the future, to forgo present wants and to wait for future benefits, have major consequences for their own lives, for the lives of their children, and for society as a whole.

Let’s examine the choices we make in our private lives and also the ones we make collectively as citizens and voters. Through these choices – especially those concerning family, work, health, and education — we are constantly defining and redefining American society, that is, we are determining “how we live.”
The raw statistics of recent decades suggest that Americans have been caught up in a whirlpool of social change. For example:
In 1950 only 12 percent of married women with children under six years of age were wage earners; by 1980 the proportion had soared to 45 percent.
In 1960 5 percent of all births were to unmarried women, but in 1980 the proportion was 18 percent.
In 1970 only 11 percent of women ages 25-29 had never been married, but in 1980 this was true of 21 percent.
The proportion of adults living alone almost tripled, from 4 percent to I1 percent, between 1950 and 1980.
Among men sixty-five and over, the proportion in the labor force fell by more than half, from 46 percent to 19 percent, between 1950 and 1980.