Aretae

The virtue of excellence

Tuesday, July 26, 2011

For Libertarians + Reactionaries

10% -- Good Luck.
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6 comments:

rightsaidfred said...

Ten percent? Seems like another case where there are lots of counter examples.

OT, what's your opinion of Baumol's cost disease in light of your belief that things get cheaper over time.

July 26, 2011 at 9:55 AM
Aretae said...

The cost disease is so cool, and so guaranteed by economics.

1. The Cost of STUFF is dropping hard and fast...basically, you can get a robot to make it, mine it, etc. So most things (Pencils) are able to be produced far cheaper than they used to be. Given competition, price of stuff drops to just over the price needed to produce (+ SMALL profit). One hour of work used to buy us a pencil...now it buys us ten thousand pencils.

2. The standard story is that many services are NOT automatable...you can't substitute a robot. In that case... productivity doesn't tend to push down the cost of the good. Indeed, one hour of work used to buy a haircut...and it still does.

3. The standard story is very wrong in at least one major area. MOST of the lack of ability to automate services is legislative protection. While it's true that we've got prototype machines that can diagnose disease well better than an average doctor...we are not allowed to use them. We have software that can give legal advice better than an average lawyer, but we're not allowed to use it. Barbers are highly regulated (Think African hair-braiders in NYC who want only to braid black-women's hair, but who are prohibited due to not having a 2000hr barber school diploma).

On the other hand, relatively unregulated sectors (Reference librarian) have often been replaced.

4. Some goods are status goods. If it was too cheap, and everyone could do it...the folks who currently do wouldn't.

Overall,

I blame the cost disease primarily on regulation, though historically, it was simply due to the lack of ability to automate services.

July 26, 2011 at 12:45 PM
rightsaidfred said...

Though the cost of stuff is dropping, it seems the cost of people is increasing at a commensurate or greater rate. Thus college costs and the costs of maintaining Civil Service GS 15's go up and up for the same end product. I was reading about California towns where safety officers were drawing $300,000 a year. Not to be outdone, I found out that some of the same positions in Las Vegas go for $400,000. If the people side of the equation have learned to hack the savings from the stuff side, how do we get ahead? And don't tell me it is all government.

July 26, 2011 at 8:27 PM
Aretae said...

Colleges are legally accredited, and the system is massively protected by the government (See the current assault on for-profit colleges).
GS15's are government jobs.
Police officers are government jobs.

Show me an example of this happening that isn't blatantly obviously government action, and we'll talk about other causes.

Doctors? Well...in the un-insured / poorly regulated areas (Plastic surgery, Lasik, etc.), costs are falling massively. In the insured/regulated areas...costs are almost flat.

July 26, 2011 at 8:35 PM
rightsaidfred said...

Show me an example of this happening that isn't blatantly obviously government action, and we'll talk about other causes.

Government is one big in-group that gathers wealth for its members.

Unions are a big in-group that gathers wealth for itself.

CEO's are an in group that gathers wealth for itself.

Mexican immigrants are an in group that gathers wealth for its members.

Somali immigrants are an in group that gathers wealth for its members.

Gays are a big in group that gathers wealth for its members.

Doctors are an in group that gathers wealth for its members.

Some groups are in decline (unions, traditional journalists, White Zimbabwe farmers) while others are in ascendance. People are expensive, and there is a scramble for resources. Organized groups are better able to compete. If you don't have a seat at the table, you are probably getting screwed.

Do we spend our time and energy breaking up in groups, or do we spend our time and energy organizing in groups to our advantage?

Well...in the un-insured / poorly regulated areas (Plastic surgery, Lasik, etc.), costs are falling massively. In the insured/regulated areas...costs are almost flat.

Is this the best strategy in the long run? Zimbabwe farmers are a cautionary tale. Ag used to be many people, but technology/economics drove relative costs/prices relentlessly downward. We got the rise of the BTO: big time operator. Zimbabwe farms became utterly huge, each one a mini General Motors of sorts. But they lost their demographic and political power. The End.

July 27, 2011 at 4:42 AM
Aretae said...

RSF,

I think I disagree on everything you said.

Government is NOT a big ingroup... it's a tool that various groups use to fight outsiders. Group A uses government to protect group A, screw everyone else, and total welfare drops. Group B, C, ... W all do the same thing...and now everyone is roughly the same positionally (unless one group ie especially good at getting gun-backed privileges)...but everyone is far worse off absolutely.

Unions are primarily (now) a government-supported group.

All the other groups you mention are, in theory, groups. Unfortunately for all the groups, in reality, they're mostly competing among themselves for wealth. Mexican immigrants are not pulling for Mexican immigrants in general...except insofar as they can use the government to do so. They're pulling for themselves...and they're primarily in competition with other Mexican immigrants (Similar skill-sets).


You seem to think that the between-group interactions are the big ones...and I don't see ANY evidence of that except insofar as they are able to use government to do the dirty work for them.

It's a basic truth of cartel economics that they basically always fail because intra-group competition trumps solidarity roughly 100% of the time.

July 27, 2011 at 7:27 AM

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