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Tag Archives: cheap vs quality

Terry Pratchett’s Boots Problem and Buying on Credit

  This post was submitted by a guest author. If you are interested in submitting a guest post, please contact me. If you’re familiar at all with the works of British sci-fi author Terry Pratchett, or if you read a lot about economic theory, you’re likely to come up with what is termed the “Sam Vimes Theory of Socioeconomic Unfairness.” Specifically, it’s the Boots Problem, as follows: Sam Vimes earns only $38 a month. A good pair of leather boots costs $50 and lasts a lifetime. A cheap pair of cardboard boots costs $10 and wears out in two years. Sam Vines cannot afford a pair of $50 boots. However, in 10 years he will have spent $100 on cheap boots and will continue to spend more, while a richer man will have saved money by only buying a pair of $50 boots once. Thus, to quote Pratchett: “The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.” It’s useful to apply the Vimes Theory when considering whether to purchase something on credit. After all, even if we attempt to avoid consumer debt, we still understand the value of taking out loans for college degrees ...

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