No concept in economics is so important yet so widely ignored and misunderstood as that of “the margin.” It’s vital.
Here’s my simple definition of “the margin”: the additional, or “the little bit” – “the little bit” more or “the little bit” less. But ordinary language too often conveys the impression that our decisions and actions are all or nothing rather than more or less.
Consider, for example, safety. Suzy might be described as a “safe driver,” while Sam is described as an “unsafe driver.” What do such descriptions mean? We interpret them, I think, to mean that Suzy drives at least “a little bit more” safely than does the typical driver, and that Sam drives at least “a little bit less” safely than does the typical driver.
But it’s important to note that these descriptions convey sensible meaning only because we listeners carry within our minds an implicit concept of the margin. Had we no such concept, then the claim that “Suzy is a safe driver” would be difficult to interpret. Does it mean that she drives in such a way as to guarantee that she will never be harmed and never commit harm while driving? If so, she would never drive, for the only way to ensure a 100% chance of never causing an auto accident while driving is never to drive.
If “safe” driver doesn’t mean 100% safe, what’s the level of safety – 99.9%? 75%? 50%? – that “safe” means? In fact, whenever we use the term “safe driver” we mean someone who chooses more safety (compared to some norm) and not someone who choose the most safety possible.
In short, barring the “corner solution” of 100%, absolute safety, there’s no level of safety at which a driver can’t drive even more safely.
The same is true for “unsafe.” Unless Sam drives blindfolded, drunk out of his mind, and with two broken arms in a hurricane along a seaside highway crowded with other cars, he’s not sure to cause damage to himself or to others no matter how unsafely he drives. Barring the “corner solution” of a 100% chance of causing (only serious?) damage, there’s no level of unsafety at which a driver can’t drive even less safely.
Ditto for cleanliness. For studiousness. For diligence. For laziness. For magnanimousness. For pettiness. For selfishness. For unselfishness. For physical fitness. For couch-potatonesss. For – you name it, the concept of the margin applies to it.
