Social-cognitive principles underlie people's learning about what matters in the social world. The benefits of these social-cognitive principles reveal essential aspects of what it means to be human. But these social-cognitive principles also have inherent costs, which highlight what it means to be ‘only human’. Social cognition is ‘social’ because what is learned concerns the social world, and where the learning takes place is in the social world. This paper reviews the benefits and costs of both sides of social cognition: (1) the cognition of social psychology principles of organization, explanation, knowledge activation and use; and (2) the social psychology of cognition principles of shared reality role enactment, social positions and identities and internal audiences. The fact that there are inherent costs of the same social-cognitive principles for which there are essential benefits affords a new perspective on social-cognitive costs that is different from either the classic ‘conflict’ perspective or the more current ‘limited capacity’ and ‘dual-process’ perspectives. This ‘trade-off’ perspective deepens both our understanding of the true nature of these principles and our appreciation of our common humanity. Copyright © 2000 John Wiley & Sons, Ltd.