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191 sats \ 3 replies \ @Undisciplined 27 May \ on: 🤮 The Cost Disease: Why Progress Makes Services Pricier econ
This can't just be about the violinist wanting to be paid more. We all want to be paid more.
The mechanisms that come to mind are 1) the violinist now has more productive outside options that the symphony goers must outbid, and 2) the wealth effect of higher productivity leads to greater demand for services in general.
The real genius of Baumol’s theory isn’t that the violinist wants a raise, it’s that she can get one because someone in tech just tripled productivity and flooded the economy with surplus capital.
Let me ask you a question (out of the context)
An orchestra of 120 men take 60 minutes to complete a song.
How much time will 2 men take to complete it?
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The flip side, which is plausible, is that the violinist's wage could decrease because the labor market is flooded with workers displaced by new technology, some of whom can play violin well.
Presumably, it takes the two men 60 minutes to complete the song, as well. It just won't sound very good.
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The flip side, which is plausible, is that the violinist's wage could decrease because the labor market is flooded with workers displaced by new technology, some of whom can play violin well.
yeah I didn't think of that 😂
Presumably, it takes the two men 60 minutes to complete the song, as well. It just won't sound very good.
You're the first person in 1 week to not fall in my trap :)
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