Baumol

Baumol spent his teaching career at Princeton and NYU but remained an aficionado of New York opera, and when in 1962 the Metropolitan Opera's orchestra went on strike, Baumol sought an explanation for the Met's regularly recurring labor troubles. He postulated "cost disease" afflicting labor-intensive service industries: Productivity will often increase not at all, or much slower, in some sectors — e.g., nursing, teaching, the performing arts — than in the overall economy. Decades later, Sen. Daniel Patrick Moynihan, who in 1962 was a young aide to Labor Secretary Arthur Goldberg as he arbitrated the orchestra dispute, explained Baumol's disease this way: "The number of players, the number of instruments, the amount of time it took to 'produce' a Mozart quartet in the 18th century will not have changed one whit two centuries later. To play the 'Minute Waltz' in 50 seconds leaves something to be desired. True of first violinists, kindergarten teachers, beat cops, sculptors, and so through a great repertoire of occupations."

Some things in the economy just can not be sped up. Productivity and efficiency has limits so inflation is built in. And the pursuit of efficiency and productivity relentlessly has their own costs.

Somewhere in this complex wash of economics is "identity" and "quality."

 

 (see the brilliant: http://steeleydock.blogspot.com/2013/05/health-care-and-shortstops.html )