Baumol’s Cost Disease
Article
Baumol’s Cost Disease is a recurring concept in the Astral Codex Ten archive, appearing 2 times across 2 issues between October 04, 2021 and December 11, 2021. The archive places it in contexts such as “Baumol’s Cost Disease and concepts of comparative advantage are critical in here”; “because Baumol’s cost disease means less easy access to the heavy manual labor”; “William Baumol of Baumol’s cost disease”. It most often appears alongside Germany, United States, /r/georgism.
Metadata
- Category: Concepts
- Mention count: 2
- Issue count: 2
- First seen: October 04, 2021
- Last seen: December 11, 2021
Appears In
- Highlights From The Comments On Modern Architecture
- Does Georgism Work, Part 3: Can Unimproved Land Value be Accurately Assessed Separately From Buildings?
Related Pages
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- Germany (2 shared issues)
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- United States (2 shared issues)
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- georgism (1 shared issues)
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- 19th century African art (1 shared issues)
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- 20th century (1 shared issues)
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- 9-11 (1 shared issues)
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- abstract art (1 shared issues)
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- ACX community (1 shared issues)
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- Aggregate Land Rents, Expenditure on Public Goods, and Optimal City Size (1 shared issues)
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- Aka (1 shared issues)
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- Akhenaten (1 shared issues)
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- Albert Gleizes (1 shared issues)
External Links
Source Context
Recovered passages from the original issue text. When the raw archive preserved outbound links inside the source passage, they are listed directly under the quote.
Baumol's Cost Disease and concepts of comparative advantage are critical in here. And you can tell, because actually we _are_ still building, or re-building, a few of these -- there was active renovation on Notre Dame (which went horribly wrong with an accidental fire), and Sagrada Familia is actively under construction. But the cost to employ skilled masons to produce that kind of ornamental stonework has gone up _drastically_ relative to the baseline of what laborers broadly earn. It used to be that if you were a lower class person with the aptitude for engineering, "mason" was probably your best career choice. And you could still choose that! But you also could be any of a dozen other flavors of engineer, and many of those choices would carry considerably less risk of bodily harm, plus many of them have the "bits versus atoms" leverage, such that your work can ultimately produce much more marginal revenue per hour of labor. The fact that the kind of person who might decide to become a mason has that kind of life choice available feeds back into what it costs to hire a mason.
The ugliest buildings to me nowadays are probably McMansions. They try to imitate traditional 19th century or earlier building styles, but fail heavily, partially because Baumol's cost disease means less easy access to the heavy manual labor those styles required.
He was even a co-signer of this famous open letter to Gorbachev in 1990 urging the Soviet premier to establish a Land Value Tax to provide a stable basis for the new economy as Russia struggled to rise from the collapse of communism. Other co-signers included four Nobel Laureates: Franco Modigliani, Robert Solow, James Tobin, and William Vickrey, not to mention William Baumol of Baumol's cost disease. Unfortunately, the Russian authorities went with Harvard Professor Jeffrey Sachs' "shock therapy" instead, and the rest is history, as anyone who lived through the post-Soviet chaos can tell you.