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This is bad economics. The price of everything does not trend towards $0. Specifically, goods that require a high labor input do not get cheaper over time unles

by lacker 16y ago

This is bad economics. The price of everything does not trend towards $0. Specifically, goods that require a high labor input do not get cheaper over time unless they can be substituted with technology. Wages rise over time, so anything requiring a certain amount of labor will get more expensive. A good example is personal servants. In 1910 a middle class family in England would be able to afford several full-time servants. Nowadays it's far more expensive, because the ratio between middle-class wages and minimum wages is much higher. A similar modern example is education. The cost of education will rise over time unless we can provide the same education with less labor investment. But the cost of providing a given teacher-to-student ratio will go up over time.

dstein 16y ago
* The price of everything does not trend towards $0. I think you'd have to agree that any time you apply technology to a particular "problem", the cost of solving that problem goes down. As technology progresses, the problems become cheaper and easier to solve. And now I can go to Walmart and buy a chair for $5 instead of fashioning one out of oak. Or I can buy a $12 electric stand-up lamp, instead of burning whale-oil in a hand lamp. So, although oak and whale-oil is never going to be free, the cost of sitting down and having light at nighttime, is essentially free at this point. * A good example is personal servants. This is not an example of technology. But alas, these days we do not require a servant when I can pop a TV dinner in a microwave and eat a meal in 5 minutes. * A similar modern example is education. The cost of education will rise over time unless we can provide the same education with less labor investment Ever visit http://www.khanacademy.org/ http://www.khanacademy.org/ ?
- cjy 16y ago
  You miss lacker's point, labor intensive goods actually become more expensive as society becomes more productive. Check out Baumol's Theorem on wikipedia. Basically, as technology makes us more productive in a lot of industries, the opportunity cost of work that cannot be easily made more productive become very high. So, we can expect the cost of things like nursing care to get more expensive over time.
  - dstein 16y ago
    I don't really argue with that theorem at all. Perhaps manual labor and and raw materials will always go up, while energy, information and technology will always go down. But if nurses cost too much, once we start applying technology to that problem, we could probably find ways to dramatically reduce the cost of nursing health care. Eg, robots, tele-doctors, cheap home healthcare etc.

by lacker 16y ago

dstein 16y ago

* The price of everything does not trend towards $0. I think you'd have to agree that any time you apply technology to a particular "problem", the cost of solving that problem goes down. As technology progresses, the problems become cheaper and easier to solve. And now I can go to Walmart and buy a chair for $5 instead of fashioning one out of oak. Or I can buy a $12 electric stand-up lamp, instead of burning whale-oil in a hand lamp. So, although oak and whale-oil is never going to be free, the cost of sitting down and having light at nighttime, is essentially free at this point. * A good example is personal servants. This is not an example of technology. But alas, these days we do not require a servant when I can pop a TV dinner in a microwave and eat a meal in 5 minutes. * A similar modern example is education. The cost of education will rise over time unless we can provide the same education with less labor investment Ever visit http://www.khanacademy.org/ http://www.khanacademy.org/ ?

cjy 16y ago
You miss lacker's point, labor intensive goods actually become more expensive as society becomes more productive. Check out Baumol's Theorem on wikipedia. Basically, as technology makes us more productive in a lot of industries, the opportunity cost of work that cannot be easily made more productive become very high. So, we can expect the cost of things like nursing care to get more expensive over time.
- dstein 16y ago
  I don't really argue with that theorem at all. Perhaps manual labor and and raw materials will always go up, while energy, information and technology will always go down. But if nurses cost too much, once we start applying technology to that problem, we could probably find ways to dramatically reduce the cost of nursing health care. Eg, robots, tele-doctors, cheap home healthcare etc.