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Honest question (willing to be consider new info): I always thought that housing, health care, and college are more expensive than TVs and cell phones because t
by chubot 4y ago
Honest question (willing to be consider new info): I always thought that housing, health care, and college are more expensive than TVs and cell phones because those things can't be OUTSOURCED to another country.
- If an American/Westerner wants a TV or a cell phone, Samsung or Apple can manufacture it overseas and have someone ship it here cheaply.
- If an American wants a house, they generally have to hire local labor, and pay local prices for land.
- If an American wants health care, for practical reasons, they must be treated by doctors and nurses who live here, and who are generally educated here.
- If an American wants to send his or her children to college, they often pay a huge premium for a campus in this country, with educators who also live in this country.
i.e. these are the industries where "remote work" is less appealing for inherent logistical reasons.
Andressen says that prices have increased because of regulation, but he doesn't provide evidence for these claims:
Why? The sectors in red are heavily regulated and controlled and bottlenecked by the government and by those industries themselves. Those industries are monopolies, oligopolies, and cartels, with extensive formal government regulation as well as regulatory capture, price fixing, Soviet style price setting, occupational licensing, and every other barrier to improvement and change you can possibly imagine. Technological innovation in those sectors is virtually forbidden now
Sure, there are little mini-cartels in all those industries. But wasn't that also the case 50 years ago? (I remember watching a documentary about the Mafia in the 20th century in NYC, and even then it was common for real estate builders to have to pay the mafia for labor. The mafia controlled some union leaders.)
So how much of the tremendous price increase is due to regulation, vs. labor costs? And there are obviously more than 2 possibilities.
Anyone have real evidence to cite?
- James_Henry 4y agoNot being outsourced is part of what's going on. There is more to it, and each of these different goods have their own particular factors going into the rise in their costs. A big factor leading to this graph is labor productivity. An hour is an hour for everyone, but while we've figured out how to make a TV in a lot less labor hours, it still takes about as many labor hours to set a bone or read a book.
- thenerdhead 4y agoThe idea he is trying to say is similar to old school investors in which the the prices continue to be hiked up in order to afford people who are willing to bribe / lobby to reduce the possibility for disruption. I think there’s a UC Santa Barbara talk by Charlie Munger on this pricing power.
- carom 4y agoHousing isn't very expensive to build. $350/sqft is on the high side for a house. The zoning is what prevents it from being abundant.