Arctotherium on Male-Female differences on progress and technology; FAIR on California's woke ethnic studies curriculum; Matt Yglesias on Baumol's Cost Disease
Most people associate "we are getting richer" with "I can afford the necessities of life easier."
Since they consider healthcare, education, childcare, etc to be necessities, it feels like a "disease" that they don't get any cheaper (in fact rise as a % of income).
I don't know who first said this, but it's true: As a society becomes richer, luxuries become conveniences become necessities. Forty years ago, a hip replacement, a post-high school certification, and day care soon after birth were not necessities.
Nor was cell service once deemed a necessity. But, while the cost of cell service has declined significantly over the past 25 years and the benefits of that service have improved immensely, the cost of the services you mention, like hip replacement, have increased significantly.
For example, in 2002, I paid $50/mo for cell service, which only included 120 minutes of peak time and did not include long distance, data, texting or roaming out of some certain arbitrary area. In 2025, I pay $25 with everything unlimited. Good luck finding a similar trend with the U.S. healthcare system or any other labor intensive industry.
Baumol's Cost Disease stands the test of time. I don’t understand the hate from Arnold or other commenters here.
If Baumol's Cost Disease is so mathematically obvious, then why weren’t economists making the point earlier and why did Baumol gain any traction whatsoever for something so obvious. This feels like the same treatment that Coase got for his “obvious” non obvious insights on social costs and the shock within the profession when he received the Nobel.
I take it that the real insight of Baumol's point is not either of your two observations about supply and demand arithmetic. Rather it's the observation that productivity increases that reduce prices in one large sector of the economy will tend to *cause* demand (for labor) to outstrip productivity and raise prices in other sectors with more static productivity.
You're are just stating it differently, possibly better than Arnold did. The point is even a jabroni like me can do the arithmetic with simple modelling to show baumol's point. It doesn't require any fancy differential equations or proofs, or whatever higher level sophisticated calculus other more complex changes over time require to prove a phenomenon as observationally and mathematically true.
But it's not definitionally true that eg increasing industrial productivity will increase the price of maid service labor, because there could be some psychological reason why demand for maid service reduces at the same time
I don't know man. I think I may have misunderstood you originally and possibly Arnold. I am less sure whether I am misunderstanding Baumol, but that wouldn't surprise me either.
Perhaps... I wonder if part of what is going on in Arnold's statement of it is a skepticism on his part about the notion of an "absolute" price over time? Like maybe he thinks the only thing we can reliably operationalize and talk about is relative prices at a given time. I know he is skeptical about wealth-aggregating concepts like GDP.
There isn't a point to dispute. Cinna just said it much better. It isn't like Arnold doesn't know what Baumol's work says. Or that the different sectors of the economy don't exist in different economies or worlds or whatever.
Peaceful societies are not progressive societies. During the Edo period in Japan, society more or less revolved around religious-military ceremonies in which the formerly warring clans paraded up and down Japan peacefully for centuries. There was moderate economic and population growth until it tapered off and stagnated. Foreign trade was famously curtailed. The turbo-macho Sengoku cultural strains were tamed and refined into cyclical ceremony.
Social and technological progress are driven by the pressure of existential rather than ritualistic warfare. If you read Herodotus and Thucydides together, it tells the story of how the ritual-bound leading Greek cities developed into empires because of the pressure of war. This also entailed social, military, and technological innovation. Without these pressures, human nature favors relatively steady-state cyclical societies stabilized by tradition.
So I think "Progress Studies" will see what it wants to see and ignore what it does not want to see. The 20th century turn against technological progress is not just because women are crazy but because the wars were very destructive and could not be contained by a framework of honor or shared ritual. To establish an alternative theory for the causes of progress it'd behoove the advocates to at least grapple with the classical theory of progress instead of trying to conspicuously tap-dance around it.
On male female issues with personality, MBTI has more insight about iNtuitive (abstract) oriented folk, who are only about 25% of the people, but the vast majority of leaders. Among them, the most important trait is how they make decisions, based on Feelings or on Thinking. Far more women are NF abstract feelers, while men are more often NT abstract thinkers.
This T-F personality trait, in how one makes decisions, is the single most important trait for predicting political support, I believe. Also organizational decisions, including team sports.
The Feelers feel bad about the unsuccessful oppressed, as well as the unsuccessful who fail w/o oppression tho falsely claiming oppression, and often even the failures who admit it’s their own fault. Minimizing bad feelings is what such folk want to.
Arcto mentions lots of feminist issues which won between 1963-1973, but doesn’t mention The Pill, a huge driver, nor the Roe v Wade abortion legalization semi-amendment (now overturned). He does mention rationality, which is what NTs kind of specialize in (as the vast majority of readers here know, and are). And progress & improvement come from better changes.
He does note that as women take over the culture, including as students and professors in college, it becomes Feminized, which I call Feeling oriented, which is more accurate than his more focused claim of anti-progress. His conclusion is true, but using F-T as the key personality trait would more it more clear.
We needn’t focus so much on the Sixties—rather we should look at the bigger trends.
Women tend conform to authority more than men because women are more vulnerable to power than men. See Benenson’s *Warriors and Worriers.*
As a result of this evolutionary fact, women tend toward neutrality and flexibility in their worldviews, opinions, and desires. At the same time women want to be treated with dignity, respect, fairness, and equality.
Women increasingly play a larger role outside the home due to labor-saving technology. With more women working outside the home, some sectors of the economy have been feminized.
Additionally, as the size and scope of government has grown, especially in education, our children are increasingly growing up in this feminized culture, which tends to be more conformist and risk averse.
What should men do?
Reduce the size and scope of government, especially in education.
Create opportunities for children to learn from male teachers—through more physical, team-oriented, activities like sports, the outdoors, camping, fitness, and competition both academically and athletically. Through these educational opportunities men should teach and model good moral character, self-control, respect, and all the other good virtues that contribute to success.
“ when productivity increases faster than demand in an industry, prices fall. And when demand increases faster than productivity in another industry, prices rise.”
….that’s a lot more straightforward explanation for this phenomenon than I usually get. Usually it’s like “imagine you’re in a string quartet in 1820, and your sister weaves carpets by hand…”
Does demand for haircuts rise for other reasons, or because the productivity enabled higher wages which people were keen to turn into more professional haircuts?
"…if you’re looking for people who are both interested and able in engineering, disagreeable enough to break consensus, and willing to take risks for uncertain payoffs, you will overwhelmingly find men."
If we assume that is true, what does that tell us about women who study engineering? What does it tell us about women in leadership positions? Are they outliers more like men or a feminizing force?
From a purely observational point of view, I would say it depends on whether the field is private or public. All the women I encountered as a research chemist for 25 years in management-track were driven, competent, and willing to take risks for reward. I don't see that in women who become politicians (I often don't see it in the male politicians either, however).
Re: women on the political left, I mostly agree with your take. There are exceptions there, too, but I agree with the rule. And of course the majority of female politicians are on the left.
Re: women on the political right, until you become an entrenched incumbent in a relatively safe seat, the nature of the job - specifically of getting and holding the job - is that you have to be careful about where to pick your battles.
But that said, I don’t agree with your premise that female politicians on the political right are inherently less willing to take risks. And I’d be willing to bet that in fact they take somewhat more risks on average than their male counterparts on the right.
And be very confident that even if they don’t take more risks than their male counterparts, they surely do not take substantially fewer risks.as you yourself basically note.
Yes they are outliers who on average are “more like men”.
Margaret Thatcher was perhaps the most obvious and notable of these in the last 50 years.
And they should be lionized as examples for other women.
If you want to be the one to redefine “feminism” to be about them, I will celebrate your success if it occurs, but sadly remain confident that it will not.
I’d have said about the same thing 10-12 years ago, but I’d have only been ~99% confident in my prediction. Today I am more than 99.999% confident.
I don't really know what you are talking about but I'm pretty sure you missed my point. Maybe I can help you by using your 99.999% in a different way. Maybe the other 1 in 100,000 are more like Thatcher. Maybe those women are the ones most attracted to the leadership positions
You clearly missed my two different but related points.
My first point was “yes, the women who study engineering are in fact more like the typical male than the typical female”.
My second point was that those women are not a “feminizing force” writ large.
But if you were thinking of politicians exclusively, I can see why you might consider female politicians a feminizing force. Because the ones on the left on average are. Even though the (admittedly lesser number of) female politicians on the political right are not.
To me it’s clearer that it is female *voters* who writ large are the “feminizing force” in changing our politics - whether voting for female candidates of male candidates - perhaps in some ways for the better, but IMO net net for the worse.
Arnold, Would it be accurate to label the following major phenomenon "Kling's Cost Disease"?
The distortion in relative prices that is caused by policies that simultaneously subsidize demand and restrict supply in an industry, absent externalities that would justify such policies.
(See education and healthcare industries. IMO This real phenomenon counts as a pathology. Its high prevalence can be explained by fundamental concepts in public-choice economics and in social psychology.)
What about the Dutch disease? It is equally simple arithmetic of relative prices. But it's good to have a name for it. Disease is just a term of art in economics for price increases that may seem counterintuitive. Compare the term "fever" which can either refer to an actual disorder or to a symptom, namely high body temperature.
“The teachers’ union, especially in California, is a formidable proponent of social justice activism instead of real education.”
Dog bites man.
Getting to true school choice (vouchers that parents can use to send their child to the school of their choice) imo needs to be the #1 item that proponents of liberty advocate for if we want a decent future for our society. The teachers unions are a cancer, and the more we can do to free children from the trap of public schools, the better.
Even if AK was exactly right four years ago that “Teachers who are not ‘woke’ will be treated as pariahs by other teachers and administrators. Public schools will end up serving the children of parents who are either very progressive or apathetic.”
Dog bites man, but CA doesn’t have any proponents of liberty left, at least not to any significant extent, to advocate for school choice. They all fled during Covid. Take a bong hit on that while you consider which freedoms are most important.
School choice already exists in TX, FL and many other red states.
I ain’t disagreeing with you on CA. I’m one of those who left the state and became a FL resident.
I DO disagree with you on your claims about those other states. They are surely better, but none yet offer full school choice for all where a voucher for fully 80% of the cost of funding a public school student goes.
AZ and FL come closest, where almost all of the STATE portion of funding can go to the private school of the parent’s choice. But even in those two states it does NOT include either the local portion or the federal portion, and so it is not yet complete school choice, and in particular less well off folks cannot afford to take their kids out of public schools.
I’ve always been confused by the Wikipedia entry on Baumol cost disease. It talks of relative productivity gain but gives the “classic” example of orchestra musicians’ wages rising in the last couple centuries (if no more) - where there can be no productivity gain. I don’t know how to slot that into your formulation either.
I guess Baumol is saying, the barber won’t keep cutting hair, the violinist won’t keep sawing his bow - if he cannot command a wage that rises with his fellows. And we must have those things.
But you’re framing it as a demand issue instead which sounds right but is so different from what Wikipedia says as to seem like a different point.
A musician for live performance is a much better example than Yglesias's use of a maid. Megan McArdle, back when she was a rather interesting solo blogger, did a whole column inspired IIRC by Downton Abbey on how much labor running a household took which explained why even the modestly wealthy back in the day had lots of hired help (also a pretty common way a rural man started on the path to owning a farm). Maids went away because people invested in household automation instead such as vacuums, ovens, refrigerators (to store partially prepared foods), other small electric appliances, i.e. *productivity* improved to the point that household duties became something people accomplished in the hours they weren't gainfully employed or otherwise occupied rather than a full-time job. It's not that it's expensive to hire a maid (I really don't get the 'expensive to be' framing but I have no interest in giving money to Matty to find out), it's that only extremely wealthy people put a high enough marginal value on their time to want to pay for one.
“I guess Baumol is saying, the barber won’t keep cutting hair, the violinist won’t keep sawing his bow - if he cannot command a wage that rises with his fellows”
No that is not most of what he is saying. (There is of course a little bit of that, indirectly.)
The barber is the easier one to address by far, since there are very limited substitutes for his services, and it’s one of the cleanest areas where there has not been much technological innovation, and so not much in the way of productivity gains.
The basic point is that as the relative cost of other goods and services goes down, thanks to productivity gains, and as overall societal productivity goes up and so we become wealthier, the highly inelastic demand for barber services means that on a relative basis, the price paid for a haircut will rise.
Said more concisely, as the real cost of other goods and services go down, ceteris paribus the relative price of a haircut will go up since given relatively fixed demand and a very competitive market, and in this particular market, a fairly constant percentage of that price continues to go the barber as his wage.
Ceteris paribus. And in this particular field ceteris has been paribus for a very long time.
Now it is plausible that AI will change this. And I don’t even mean AI robots cutting hair. Even if we presume that ”never” happens, if AI makes a bunch of people unemployable in many many other fields, then perhaps that would cause a massive increase in the supply of barbers - which would then cause a decrease in in the price of haircuts, given the highly inelastic demand for haircuts.
(And I did deliberately type *his* services, since of course almost no females go to barbers, they - as do some men as well - go to “hairdressers”… 😏
“This occurs because wages in stagnant, service-based sectors must rise to match broader economic wage increases driven by the high-productivity sector, leading to rising costs for services like education, healthcare, and the arts.”
But offers no mechanism.
AK makes it sound like demand is not fixed but rises with the productivity gain in the other sector.
Broadly speaking there are two factors: supply and demand.
Demand for most services is indeed not fixed but ever rising as a more productive society is wealthier. This is a variation of Say’s Law / supply-side economics - supply creates its own demand. When I have more potato chips or microchips I’m in a position to demand a lot more goods and services.
The supply of the *services* in question does not grow as fast as for goods and services that benefit from productivity growth. Which is roughly the Baumol cost disease point for industries not experiencing rising productivity.
The supply of *labor* delivering these lower productivity services can of course indirectly be affected by the availability of higher paying jobs in other sectors (which I think was your OG point here). But it is not the only factor in explaining the higher relative pay of barber jobs, even if often it is *part* of the explanation.
Okay, thanks. I like this explanation better. (AI useless.) I will try to restate: supply in sectors experiencing productivity increases, creates demand in another, where supply has not been able to grow, because productivity is more or less fixed.
Productivity goes up on goods, prices go down, you buy a bit more goods but also have spent less on goods. With more money, you want more services (demand up), so prices go up for those.
As prices change, one’s budget changes, and the limited money should be more explicit in discussion of price changes.
I don’t consider Wikipedia canonical or even authoritative on topics like these. I did not even read it.
But the idea that there is a wealth effect to demand for goods and services is well known.
Having more supply of stuff due to higher productivity for society, even when said higher productivity is limited to certain sectors, makes society wealthier, and causes society in aggregate to have greater demand for more stuff.
As or more important than the generic “demand” for more stuff, it is the supply of that more stuff - which came about from that greater productivity - that makes us all richer and able to buy/trade for even more stuff.
This is the essence of Say’s Law. This is the essence of supply-side economics.
Or: factory workers can now afford to go to the opera. But wait - the opera tickets keep going up over time. The factory worker has been robbed. That’s the “disease”? The cost of the ticket ought not to have risen?
Factory workers don’t go to the opera. Never have and never will. They watch it on YouTube for free instead 😜
In other words, technology can help to overcome the cost disease even in certain labor intensive industries. For example, I could spend $1,000 to take my family to an NFL game or we can enjoy at home on the television at $0 on a marginal cost basis.
I don’t think so. It’s for people who like opera. Pretty sure it was the dominant entertainment of the 19th century. Couldn’t have been so if only blue bloods bought tickets. A matter of arithmetic as AK would say.
Poor people generally did not attend the opera in the 19th century, as it was primarily an elite cultural institution. The working classes were more likely to attend music halls, vaudeville shows, or popular theater, which offered music and drama at much lower prices.
I like Baumol's Cost Disease. Where have I gone wrong?
It taught me that in *progressive sectors*, productivity can increase through technological advances, automation, or improved processes. That means decreasing average costs per unit over time. That’s a blessing.
But, *stagnant sectors* have limited potential for productivity improvements because they rely heavily on human labor that cannot easily be replaced or made more efficient. That means steady costs per unit, or in the case of public education, increasing costs per unit. That’s a curse.
Arctotherium defines the subject of progress studies as ““economic, technological, scientific, and cultural advancements that have transformed human life and raised standards of living over the past couple of centuries.” “Transformed human life” and “raised standards of living” would seem to leave much room for debate. Which transformations? And how to define and measure “standards of living”? And what were the trade offs for each such phenomenon? Even advocates realize:
“there is no overarching ‘unified field theory’ of what Progress Studies entails or what underpins it.. …
Everyone shared the goal of advancing human well-being, but participants had different conceptions of the moral foundations of well-being, and even some disagreement about what well-being meant in concrete terms.”
But yet, study is not sufficient for the founders of progress studies who demand control and acceleration:
“Collison and Cowen went further. Their goal was not merely to inspire the development of a field of study that could give us a better understanding of the prerequisites of progress, but also to formulate a plan for advancing progress. They argued that “mere comprehension is not the goal,” and advocated for “the deeper goal of speeding it up.” They went on to say, “the implicit question is how scientists [and others] should be acting” and that Progress Studies should be viewed as, “closer to medicine than biology: The goal is to treat, not merely to understand.” The presupposition here is that progress is important and that we need to take steps to get a lot more of it. Again, we can think of this part of Progress Studies as progress advocacy. And advocacy can entail both advocating for progress generally as well as specific types of policy advocacy.”
So, might it be that everyone, advocates and skeptics alike,” are grateful and happy for medical advances, labor saving devices, increased information sharing, cheaper and more abundant power, etc, etc, but have different notions of who gets to prioritize what get resources and what gets sped up?” Does a divergence in priorities really mean one group is pro-progress and another is anti-progress? Are GMO advocates strangling future Norman Borlaugs in the cradle how we want to define “progress” ?
Since progress is about changes in “standards of living,” can’t we acknowledge that people can legitimately have competing conceptions of what that phrase entails. Recently Harvard released the results of years of study on what human flourishing means and came up with results that challenge the notion that wealth is everything:
“The study found that Indonesia’s flourishing score was highest; Japan’s was lowest. Mexico, the Philippines, and Israel had the other high scores; Turkey was second lowest. The U.S. and Sweden—a country that consistently ranks as one of the world’s happiest countries when judged only by life evaluation—ranked in the middle.”
Does this inform progress studies or do progress studies advocates find it antithetical to their project? Might the results provide a rational explanation for declines in optimism?
Merely attacking and denigrating people who question the holiness of GDP as a measure when $39 trillion of the US’s GDP growth over the past decades is national debt plays into the hands of
pear to play into the hands of some skeptics with different, possibly less benign, agendas For example, Slavoj Žižek's Against Progress:
“To define 'progress' is to lay claim to the future. Seminal thinker Slavoj Žižek turns essayist to interrogate the competing visions which form the horizons of human possibility and ask: Can things, which have never seemed worse, get better? What would a better world be? And how, when we are constantly besieged by doomers, degrowthers and disorienting relativisms can we make any headway at all in the face of unprecedented ecological, social and political crises?
In thirteen iconoclastic essays, Slavoj Žižek disrupts the death-grip that neoliberalists, Trumpian populists, toxic self-improvement industries and accelerationists alike have established on the idea of progress. Anatomizing what is lost when opponents of the future are allowed to define it, Žižek ruthlessly exposes what different visions of progress exclude or sacrifice and the dynamics of desire, denial and disavowal at work in Hollywood blockbusters, Buddhist economics, decolonization movements and other engines of vision.”
I dunno. Lot to think about. Nevertheless, my crank American knee-jerk reaction to the idea of a meta-bureaucracy for the control and direction of progress is that even if it could be managed competently it would be dangerous and in reality more than likely to be subject to malignant influences. If you want progress, go out and create it, instead of instructing creators in how to go about their business. One suspects that going forward, it will be the peasants with pitchforks and torches who keep the promise of progress alive, and they will have their work cut out for them.
Your questions and critiques are exactly why we need to spend more attention on studying the topic. In essence, the broader issue of whether humanity survives and flourishes in the future is arguably more important than every other topic combined.
You are right that every person has a different (and changing) view of what flourishing entails, and that progress studies need to embrace this squishiness. In addition there are conflicts and uncertainties. Any study of progress that makes light of these complications should be suspect (and Collision and Cowen are just recent cheerleaders, not the foundational architects of the issue.) I certainly agree with them that there is value not just in understanding progress, but in promoting and advancing it. That of course is not the same thing as controlling it. And nobody remotely familiar with real progress would recommend a bureaucracy to promote it.
You are also right that we shouldn’t conflate progress with GDP. I get the sense that some writers emphasize per capita GDP more because of how easy it is to measure.
I haven’t read Zizek yet. Do you recommend it?
Why the belief that progress will come from those with pitchforks? Pretty much the opposite of what I would recommend.
At least one film critic claims that the film is no longer socially relevant: “(we no longer can look at Frankenstein’s Monster and use him as a metaphor for the current problems facing our nation.”
(https://influxmagazine.com/frankenstein-1931/) but in this age of the stolen brain of AI and the Tesla coil womb (https://nurse.org/news/pregnancy-robot-artificial-womb-china/ ) the metaphor appears patently obvious. And the fear of the ordinary townspeople in the film and the great depression audiences who related to the film, might well be upon us as abundant energy for the masses is diverted to tax-subsidized server farms via tax-subsidized grid extensions from former farmland covered with heat retaining solar panels. The idea that the great and good maybe aren’t as great and good as they might think they are and might need a little democratic boundary setting.
And an additional theme is the notion of competence culture:
“The core of redneck culture, though, is competence. Rednecks have been left to care for themselves for a very long time, and they can do a surprising amount. We often say that if the dystopia comes, we’re sure to make it — but we’re not so sure about you folks in the city, where some kids don’t even know milk comes from cows. We do it ourselves — fix our own cars, build our own homes, grow our own food. And we do it by learning from those around us.
That’s the real cultural clash of our time. Rednecks prove knowledge by doing. If you can fix the truck, wire the barn, or keep the hunting camp fed, you’re qualified. No paperwork needed. The managerial class, by contrast, proves knowledge by credentials. Degrees, certificates, HR résumés — those are the tickets to respectability. Rednecks don’t have a problem with book learning, mind. An autodidact who can outthink a PhD is welcomed in a redneck town; because he may not have papers proving his knowledge, though, he’d likely be dismissed in a progressive office.
This obsession with paper over proof is why our culture is stagnating. Once credentials certified skill. Now they mostly gatekeep it. HR filters toss out innovators and people with real skills for lacking the “right” degree. Institutions value conformity more than discovery. People with beautiful résumés but weak real-world skills clog the system, while men and women with raw competence are shut out.”
Very little of the great advances in living standards enjoyed in the United States over the past two and half centuries can be attributed to federal government programs, management science, or grant programs. It happened because people with competence succeeded in achieving in spite of it all. One wonders whether all the control over progress exercised by grant-makers is actually improving living standards or serving other agendas. And one wonders too how much raw human talent caught up in the journal article producing industry would find its way to work pragmatically improving standards of living if only there were weaned from the grant-makers teats.
In your view, does a declining wage premium for US college education indicate a reduction in productivity for that sector? It seems difficult to extract the supply demand effect on prices from a more direct measure of productivity like "graduates produced per labor hour". I wonder if the "cost disease" framing is allowing people to lump other factors and sources of inefficiency into the excusing the problem (including declining productivity and something like increasing the supply of graduates reducing the value of the degree).
Most people associate "we are getting richer" with "I can afford the necessities of life easier."
Since they consider healthcare, education, childcare, etc to be necessities, it feels like a "disease" that they don't get any cheaper (in fact rise as a % of income).
I don't know who first said this, but it's true: As a society becomes richer, luxuries become conveniences become necessities. Forty years ago, a hip replacement, a post-high school certification, and day care soon after birth were not necessities.
Nor was cell service once deemed a necessity. But, while the cost of cell service has declined significantly over the past 25 years and the benefits of that service have improved immensely, the cost of the services you mention, like hip replacement, have increased significantly.
For example, in 2002, I paid $50/mo for cell service, which only included 120 minutes of peak time and did not include long distance, data, texting or roaming out of some certain arbitrary area. In 2025, I pay $25 with everything unlimited. Good luck finding a similar trend with the U.S. healthcare system or any other labor intensive industry.
Baumol's Cost Disease stands the test of time. I don’t understand the hate from Arnold or other commenters here.
I guess Arnold hates “disease” as if it’s something that can be cured.
It’s an equation kind of inevitable adjustment, or trade off. He doesn’t say a better phrase. Perhaps “Cost Adjustment “?
If Baumol's Cost Disease is so mathematically obvious, then why weren’t economists making the point earlier and why did Baumol gain any traction whatsoever for something so obvious. This feels like the same treatment that Coase got for his “obvious” non obvious insights on social costs and the shock within the profession when he received the Nobel.
I take it that the real insight of Baumol's point is not either of your two observations about supply and demand arithmetic. Rather it's the observation that productivity increases that reduce prices in one large sector of the economy will tend to *cause* demand (for labor) to outstrip productivity and raise prices in other sectors with more static productivity.
You're are just stating it differently, possibly better than Arnold did. The point is even a jabroni like me can do the arithmetic with simple modelling to show baumol's point. It doesn't require any fancy differential equations or proofs, or whatever higher level sophisticated calculus other more complex changes over time require to prove a phenomenon as observationally and mathematically true.
But it's not definitionally true that eg increasing industrial productivity will increase the price of maid service labor, because there could be some psychological reason why demand for maid service reduces at the same time
I don't know man. I think I may have misunderstood you originally and possibly Arnold. I am less sure whether I am misunderstanding Baumol, but that wouldn't surprise me either.
Perhaps... I wonder if part of what is going on in Arnold's statement of it is a skepticism on his part about the notion of an "absolute" price over time? Like maybe he thinks the only thing we can reliably operationalize and talk about is relative prices at a given time. I know he is skeptical about wealth-aggregating concepts like GDP.
AK did not dispute the substantive point here at all; he merely laments the terminology.
There isn't a point to dispute. Cinna just said it much better. It isn't like Arnold doesn't know what Baumol's work says. Or that the different sectors of the economy don't exist in different economies or worlds or whatever.
No, it’s not a disease; no, it’s not that profound; and no, Baumol was not the first one to think about it.
But, yes, it’s good to have a name for the Thing, and basic arithmetic continues to surprise people.
Peaceful societies are not progressive societies. During the Edo period in Japan, society more or less revolved around religious-military ceremonies in which the formerly warring clans paraded up and down Japan peacefully for centuries. There was moderate economic and population growth until it tapered off and stagnated. Foreign trade was famously curtailed. The turbo-macho Sengoku cultural strains were tamed and refined into cyclical ceremony.
Social and technological progress are driven by the pressure of existential rather than ritualistic warfare. If you read Herodotus and Thucydides together, it tells the story of how the ritual-bound leading Greek cities developed into empires because of the pressure of war. This also entailed social, military, and technological innovation. Without these pressures, human nature favors relatively steady-state cyclical societies stabilized by tradition.
So I think "Progress Studies" will see what it wants to see and ignore what it does not want to see. The 20th century turn against technological progress is not just because women are crazy but because the wars were very destructive and could not be contained by a framework of honor or shared ritual. To establish an alternative theory for the causes of progress it'd behoove the advocates to at least grapple with the classical theory of progress instead of trying to conspicuously tap-dance around it.
Arctotherium is among the best posters now available, and is totally correct about the sex difference issues.
There is another great note on how bad “brain drain” immigration can be, and increasingly is:
https://arctotherium.substack.com/p/brain-drain-as-geopolitical-strategy
On male female issues with personality, MBTI has more insight about iNtuitive (abstract) oriented folk, who are only about 25% of the people, but the vast majority of leaders. Among them, the most important trait is how they make decisions, based on Feelings or on Thinking. Far more women are NF abstract feelers, while men are more often NT abstract thinkers.
This T-F personality trait, in how one makes decisions, is the single most important trait for predicting political support, I believe. Also organizational decisions, including team sports.
The Feelers feel bad about the unsuccessful oppressed, as well as the unsuccessful who fail w/o oppression tho falsely claiming oppression, and often even the failures who admit it’s their own fault. Minimizing bad feelings is what such folk want to.
Arcto mentions lots of feminist issues which won between 1963-1973, but doesn’t mention The Pill, a huge driver, nor the Roe v Wade abortion legalization semi-amendment (now overturned). He does mention rationality, which is what NTs kind of specialize in (as the vast majority of readers here know, and are). And progress & improvement come from better changes.
He does note that as women take over the culture, including as students and professors in college, it becomes Feminized, which I call Feeling oriented, which is more accurate than his more focused claim of anti-progress. His conclusion is true, but using F-T as the key personality trait would more it more clear.
We needn’t focus so much on the Sixties—rather we should look at the bigger trends.
Women tend conform to authority more than men because women are more vulnerable to power than men. See Benenson’s *Warriors and Worriers.*
As a result of this evolutionary fact, women tend toward neutrality and flexibility in their worldviews, opinions, and desires. At the same time women want to be treated with dignity, respect, fairness, and equality.
Women increasingly play a larger role outside the home due to labor-saving technology. With more women working outside the home, some sectors of the economy have been feminized.
Additionally, as the size and scope of government has grown, especially in education, our children are increasingly growing up in this feminized culture, which tends to be more conformist and risk averse.
What should men do?
Reduce the size and scope of government, especially in education.
Create opportunities for children to learn from male teachers—through more physical, team-oriented, activities like sports, the outdoors, camping, fitness, and competition both academically and athletically. Through these educational opportunities men should teach and model good moral character, self-control, respect, and all the other good virtues that contribute to success.
“ when productivity increases faster than demand in an industry, prices fall. And when demand increases faster than productivity in another industry, prices rise.”
….that’s a lot more straightforward explanation for this phenomenon than I usually get. Usually it’s like “imagine you’re in a string quartet in 1820, and your sister weaves carpets by hand…”
Does demand for haircuts rise for other reasons, or because the productivity enabled higher wages which people were keen to turn into more professional haircuts?
"…if you’re looking for people who are both interested and able in engineering, disagreeable enough to break consensus, and willing to take risks for uncertain payoffs, you will overwhelmingly find men."
If we assume that is true, what does that tell us about women who study engineering? What does it tell us about women in leadership positions? Are they outliers more like men or a feminizing force?
From a purely observational point of view, I would say it depends on whether the field is private or public. All the women I encountered as a research chemist for 25 years in management-track were driven, competent, and willing to take risks for reward. I don't see that in women who become politicians (I often don't see it in the male politicians either, however).
“I don't see that in women who become politicians”
I surely don’t agree with that. In particular women who become politicians on the political right.
The very act of a woman becoming a right of center politician is taking a risk.
Margaret Thatcher, Golda Meir took major risks.
Sarah Palin took risks surely. Nikki Haley too. Though surely the latter two were less successful than the former two.
Margaret Thatcher and Golda Meir are great outliers, Andy, not anywhere close to the norm for political women.
Two points.
Re: women on the political left, I mostly agree with your take. There are exceptions there, too, but I agree with the rule. And of course the majority of female politicians are on the left.
Re: women on the political right, until you become an entrenched incumbent in a relatively safe seat, the nature of the job - specifically of getting and holding the job - is that you have to be careful about where to pick your battles.
But that said, I don’t agree with your premise that female politicians on the political right are inherently less willing to take risks. And I’d be willing to bet that in fact they take somewhat more risks on average than their male counterparts on the right.
And be very confident that even if they don’t take more risks than their male counterparts, they surely do not take substantially fewer risks.as you yourself basically note.
Yes they are outliers who on average are “more like men”.
Margaret Thatcher was perhaps the most obvious and notable of these in the last 50 years.
And they should be lionized as examples for other women.
If you want to be the one to redefine “feminism” to be about them, I will celebrate your success if it occurs, but sadly remain confident that it will not.
I’d have said about the same thing 10-12 years ago, but I’d have only been ~99% confident in my prediction. Today I am more than 99.999% confident.
I don't really know what you are talking about but I'm pretty sure you missed my point. Maybe I can help you by using your 99.999% in a different way. Maybe the other 1 in 100,000 are more like Thatcher. Maybe those women are the ones most attracted to the leadership positions
You clearly missed my two different but related points.
My first point was “yes, the women who study engineering are in fact more like the typical male than the typical female”.
My second point was that those women are not a “feminizing force” writ large.
But if you were thinking of politicians exclusively, I can see why you might consider female politicians a feminizing force. Because the ones on the left on average are. Even though the (admittedly lesser number of) female politicians on the political right are not.
To me it’s clearer that it is female *voters* who writ large are the “feminizing force” in changing our politics - whether voting for female candidates of male candidates - perhaps in some ways for the better, but IMO net net for the worse.
Arnold, Would it be accurate to label the following major phenomenon "Kling's Cost Disease"?
The distortion in relative prices that is caused by policies that simultaneously subsidize demand and restrict supply in an industry, absent externalities that would justify such policies.
(See education and healthcare industries. IMO This real phenomenon counts as a pathology. Its high prevalence can be explained by fundamental concepts in public-choice economics and in social psychology.)
What about the Dutch disease? It is equally simple arithmetic of relative prices. But it's good to have a name for it. Disease is just a term of art in economics for price increases that may seem counterintuitive. Compare the term "fever" which can either refer to an actual disorder or to a symptom, namely high body temperature.
“the most reproductively successful man of the second millennium was Genghis Khan. The most reproductively successful woman was his mother.”
This juxtaposition made it clear that I don’t understand the evolutionary psychology argument for sex differences very well.
“The teachers’ union, especially in California, is a formidable proponent of social justice activism instead of real education.”
Dog bites man.
Getting to true school choice (vouchers that parents can use to send their child to the school of their choice) imo needs to be the #1 item that proponents of liberty advocate for if we want a decent future for our society. The teachers unions are a cancer, and the more we can do to free children from the trap of public schools, the better.
Even if AK was exactly right four years ago that “Teachers who are not ‘woke’ will be treated as pariahs by other teachers and administrators. Public schools will end up serving the children of parents who are either very progressive or apathetic.”
https://arnoldkling.substack.com/p/cant-duck-critical-race-theory
The fact that we will be unable to save all children cannot be an excuse not to save as many as possible.
Dog bites man, but CA doesn’t have any proponents of liberty left, at least not to any significant extent, to advocate for school choice. They all fled during Covid. Take a bong hit on that while you consider which freedoms are most important.
School choice already exists in TX, FL and many other red states.
I ain’t disagreeing with you on CA. I’m one of those who left the state and became a FL resident.
I DO disagree with you on your claims about those other states. They are surely better, but none yet offer full school choice for all where a voucher for fully 80% of the cost of funding a public school student goes.
AZ and FL come closest, where almost all of the STATE portion of funding can go to the private school of the parent’s choice. But even in those two states it does NOT include either the local portion or the federal portion, and so it is not yet complete school choice, and in particular less well off folks cannot afford to take their kids out of public schools.
You don’t slay a dragon in one fell swoop. Stay patient, but vigilant.
I’ve always been confused by the Wikipedia entry on Baumol cost disease. It talks of relative productivity gain but gives the “classic” example of orchestra musicians’ wages rising in the last couple centuries (if no more) - where there can be no productivity gain. I don’t know how to slot that into your formulation either.
I guess Baumol is saying, the barber won’t keep cutting hair, the violinist won’t keep sawing his bow - if he cannot command a wage that rises with his fellows. And we must have those things.
But you’re framing it as a demand issue instead which sounds right but is so different from what Wikipedia says as to seem like a different point.
A musician for live performance is a much better example than Yglesias's use of a maid. Megan McArdle, back when she was a rather interesting solo blogger, did a whole column inspired IIRC by Downton Abbey on how much labor running a household took which explained why even the modestly wealthy back in the day had lots of hired help (also a pretty common way a rural man started on the path to owning a farm). Maids went away because people invested in household automation instead such as vacuums, ovens, refrigerators (to store partially prepared foods), other small electric appliances, i.e. *productivity* improved to the point that household duties became something people accomplished in the hours they weren't gainfully employed or otherwise occupied rather than a full-time job. It's not that it's expensive to hire a maid (I really don't get the 'expensive to be' framing but I have no interest in giving money to Matty to find out), it's that only extremely wealthy people put a high enough marginal value on their time to want to pay for one.
“I guess Baumol is saying, the barber won’t keep cutting hair, the violinist won’t keep sawing his bow - if he cannot command a wage that rises with his fellows”
No that is not most of what he is saying. (There is of course a little bit of that, indirectly.)
The barber is the easier one to address by far, since there are very limited substitutes for his services, and it’s one of the cleanest areas where there has not been much technological innovation, and so not much in the way of productivity gains.
The basic point is that as the relative cost of other goods and services goes down, thanks to productivity gains, and as overall societal productivity goes up and so we become wealthier, the highly inelastic demand for barber services means that on a relative basis, the price paid for a haircut will rise.
Said more concisely, as the real cost of other goods and services go down, ceteris paribus the relative price of a haircut will go up since given relatively fixed demand and a very competitive market, and in this particular market, a fairly constant percentage of that price continues to go the barber as his wage.
Ceteris paribus. And in this particular field ceteris has been paribus for a very long time.
Now it is plausible that AI will change this. And I don’t even mean AI robots cutting hair. Even if we presume that ”never” happens, if AI makes a bunch of people unemployable in many many other fields, then perhaps that would cause a massive increase in the supply of barbers - which would then cause a decrease in in the price of haircuts, given the highly inelastic demand for haircuts.
(And I did deliberately type *his* services, since of course almost no females go to barbers, they - as do some men as well - go to “hairdressers”… 😏
Curiously the AI offers:
“This occurs because wages in stagnant, service-based sectors must rise to match broader economic wage increases driven by the high-productivity sector, leading to rising costs for services like education, healthcare, and the arts.”
But offers no mechanism.
AK makes it sound like demand is not fixed but rises with the productivity gain in the other sector.
Broadly speaking there are two factors: supply and demand.
Demand for most services is indeed not fixed but ever rising as a more productive society is wealthier. This is a variation of Say’s Law / supply-side economics - supply creates its own demand. When I have more potato chips or microchips I’m in a position to demand a lot more goods and services.
The supply of the *services* in question does not grow as fast as for goods and services that benefit from productivity growth. Which is roughly the Baumol cost disease point for industries not experiencing rising productivity.
The supply of *labor* delivering these lower productivity services can of course indirectly be affected by the availability of higher paying jobs in other sectors (which I think was your OG point here). But it is not the only factor in explaining the higher relative pay of barber jobs, even if often it is *part* of the explanation.
Okay, thanks. I like this explanation better. (AI useless.) I will try to restate: supply in sectors experiencing productivity increases, creates demand in another, where supply has not been able to grow, because productivity is more or less fixed.
Think of Goods, Services, and your own budget.
Productivity goes up on goods, prices go down, you buy a bit more goods but also have spent less on goods. With more money, you want more services (demand up), so prices go up for those.
As prices change, one’s budget changes, and the limited money should be more explicit in discussion of price changes.
The Wikipedia page makes no mention of wealth.
I don’t consider Wikipedia canonical or even authoritative on topics like these. I did not even read it.
But the idea that there is a wealth effect to demand for goods and services is well known.
Having more supply of stuff due to higher productivity for society, even when said higher productivity is limited to certain sectors, makes society wealthier, and causes society in aggregate to have greater demand for more stuff.
As or more important than the generic “demand” for more stuff, it is the supply of that more stuff - which came about from that greater productivity - that makes us all richer and able to buy/trade for even more stuff.
This is the essence of Say’s Law. This is the essence of supply-side economics.
I believe in a wealth effect too - but it seemed like the Baumol entry was at pains not to mention it.
They are similar concepts but not completely identical.
The wealth effect is usually mentioned in connection with the increase in the value of assets - stocks or one’s home.
What they have in common is that as people have more, they are in position to demand more goods and services.
Say’s Law: supply creates its own demand.
Wealth effect: additional wealth creates additional demand.
Additional supply creates wealth directly, creating more demand.
Wealth effect increases in the value of assets does not directly create supply, but it does create more demand.
Or: factory workers can now afford to go to the opera. But wait - the opera tickets keep going up over time. The factory worker has been robbed. That’s the “disease”? The cost of the ticket ought not to have risen?
Factory workers don’t go to the opera. Never have and never will. They watch it on YouTube for free instead 😜
In other words, technology can help to overcome the cost disease even in certain labor intensive industries. For example, I could spend $1,000 to take my family to an NFL game or we can enjoy at home on the television at $0 on a marginal cost basis.
I was seeking an example from an earlier time; “opera” was supposed to make this plain, its heyday being in the rearview.
On behalf of factory workers everywhere, please do better next time. Opera is for the blue bloods not the masses.
I don’t think so. It’s for people who like opera. Pretty sure it was the dominant entertainment of the 19th century. Couldn’t have been so if only blue bloods bought tickets. A matter of arithmetic as AK would say.
Poor people generally did not attend the opera in the 19th century, as it was primarily an elite cultural institution. The working classes were more likely to attend music halls, vaudeville shows, or popular theater, which offered music and drama at much lower prices.
That’s history, not arithmetic.
I like Baumol's Cost Disease. Where have I gone wrong?
It taught me that in *progressive sectors*, productivity can increase through technological advances, automation, or improved processes. That means decreasing average costs per unit over time. That’s a blessing.
But, *stagnant sectors* have limited potential for productivity improvements because they rely heavily on human labor that cannot easily be replaced or made more efficient. That means steady costs per unit, or in the case of public education, increasing costs per unit. That’s a curse.
Arctotherium defines the subject of progress studies as ““economic, technological, scientific, and cultural advancements that have transformed human life and raised standards of living over the past couple of centuries.” “Transformed human life” and “raised standards of living” would seem to leave much room for debate. Which transformations? And how to define and measure “standards of living”? And what were the trade offs for each such phenomenon? Even advocates realize:
“there is no overarching ‘unified field theory’ of what Progress Studies entails or what underpins it.. …
Everyone shared the goal of advancing human well-being, but participants had different conceptions of the moral foundations of well-being, and even some disagreement about what well-being meant in concrete terms.”
But yet, study is not sufficient for the founders of progress studies who demand control and acceleration:
“Collison and Cowen went further. Their goal was not merely to inspire the development of a field of study that could give us a better understanding of the prerequisites of progress, but also to formulate a plan for advancing progress. They argued that “mere comprehension is not the goal,” and advocated for “the deeper goal of speeding it up.” They went on to say, “the implicit question is how scientists [and others] should be acting” and that Progress Studies should be viewed as, “closer to medicine than biology: The goal is to treat, not merely to understand.” The presupposition here is that progress is important and that we need to take steps to get a lot more of it. Again, we can think of this part of Progress Studies as progress advocacy. And advocacy can entail both advocating for progress generally as well as specific types of policy advocacy.”
(https://progressforum.org/posts/m2wB8L886v9goeLz9/where-is-progress-studies-going )
So, might it be that everyone, advocates and skeptics alike,” are grateful and happy for medical advances, labor saving devices, increased information sharing, cheaper and more abundant power, etc, etc, but have different notions of who gets to prioritize what get resources and what gets sped up?” Does a divergence in priorities really mean one group is pro-progress and another is anti-progress? Are GMO advocates strangling future Norman Borlaugs in the cradle how we want to define “progress” ?
Since progress is about changes in “standards of living,” can’t we acknowledge that people can legitimately have competing conceptions of what that phrase entails. Recently Harvard released the results of years of study on what human flourishing means and came up with results that challenge the notion that wealth is everything:
“The study found that Indonesia’s flourishing score was highest; Japan’s was lowest. Mexico, the Philippines, and Israel had the other high scores; Turkey was second lowest. The U.S. and Sweden—a country that consistently ranks as one of the world’s happiest countries when judged only by life evaluation—ranked in the middle.”
https://hsph.harvard.edu/news/measuring-a-life-well-lived/
Does this inform progress studies or do progress studies advocates find it antithetical to their project? Might the results provide a rational explanation for declines in optimism?
Merely attacking and denigrating people who question the holiness of GDP as a measure when $39 trillion of the US’s GDP growth over the past decades is national debt plays into the hands of
pear to play into the hands of some skeptics with different, possibly less benign, agendas For example, Slavoj Žižek's Against Progress:
“To define 'progress' is to lay claim to the future. Seminal thinker Slavoj Žižek turns essayist to interrogate the competing visions which form the horizons of human possibility and ask: Can things, which have never seemed worse, get better? What would a better world be? And how, when we are constantly besieged by doomers, degrowthers and disorienting relativisms can we make any headway at all in the face of unprecedented ecological, social and political crises?
In thirteen iconoclastic essays, Slavoj Žižek disrupts the death-grip that neoliberalists, Trumpian populists, toxic self-improvement industries and accelerationists alike have established on the idea of progress. Anatomizing what is lost when opponents of the future are allowed to define it, Žižek ruthlessly exposes what different visions of progress exclude or sacrifice and the dynamics of desire, denial and disavowal at work in Hollywood blockbusters, Buddhist economics, decolonization movements and other engines of vision.”
(https://guardianbookshop.com/against-progress-9781350515857/ )
I dunno. Lot to think about. Nevertheless, my crank American knee-jerk reaction to the idea of a meta-bureaucracy for the control and direction of progress is that even if it could be managed competently it would be dangerous and in reality more than likely to be subject to malignant influences. If you want progress, go out and create it, instead of instructing creators in how to go about their business. One suspects that going forward, it will be the peasants with pitchforks and torches who keep the promise of progress alive, and they will have their work cut out for them.
Great comment!
Your questions and critiques are exactly why we need to spend more attention on studying the topic. In essence, the broader issue of whether humanity survives and flourishes in the future is arguably more important than every other topic combined.
You are right that every person has a different (and changing) view of what flourishing entails, and that progress studies need to embrace this squishiness. In addition there are conflicts and uncertainties. Any study of progress that makes light of these complications should be suspect (and Collision and Cowen are just recent cheerleaders, not the foundational architects of the issue.) I certainly agree with them that there is value not just in understanding progress, but in promoting and advancing it. That of course is not the same thing as controlling it. And nobody remotely familiar with real progress would recommend a bureaucracy to promote it.
You are also right that we shouldn’t conflate progress with GDP. I get the sense that some writers emphasize per capita GDP more because of how easy it is to measure.
I haven’t read Zizek yet. Do you recommend it?
Why the belief that progress will come from those with pitchforks? Pretty much the opposite of what I would recommend.
Thanks.
I have just read about the book, not actually read it.
The idea of peasants with pitchforks and torches comes from the 1931 Frankenstein film: https://www.youtube.com/watch?v=yq1KeyEARBU
At least one film critic claims that the film is no longer socially relevant: “(we no longer can look at Frankenstein’s Monster and use him as a metaphor for the current problems facing our nation.”
(https://influxmagazine.com/frankenstein-1931/) but in this age of the stolen brain of AI and the Tesla coil womb (https://nurse.org/news/pregnancy-robot-artificial-womb-china/ ) the metaphor appears patently obvious. And the fear of the ordinary townspeople in the film and the great depression audiences who related to the film, might well be upon us as abundant energy for the masses is diverted to tax-subsidized server farms via tax-subsidized grid extensions from former farmland covered with heat retaining solar panels. The idea that the great and good maybe aren’t as great and good as they might think they are and might need a little democratic boundary setting.
And an additional theme is the notion of competence culture:
“The core of redneck culture, though, is competence. Rednecks have been left to care for themselves for a very long time, and they can do a surprising amount. We often say that if the dystopia comes, we’re sure to make it — but we’re not so sure about you folks in the city, where some kids don’t even know milk comes from cows. We do it ourselves — fix our own cars, build our own homes, grow our own food. And we do it by learning from those around us.
That’s the real cultural clash of our time. Rednecks prove knowledge by doing. If you can fix the truck, wire the barn, or keep the hunting camp fed, you’re qualified. No paperwork needed. The managerial class, by contrast, proves knowledge by credentials. Degrees, certificates, HR résumés — those are the tickets to respectability. Rednecks don’t have a problem with book learning, mind. An autodidact who can outthink a PhD is welcomed in a redneck town; because he may not have papers proving his knowledge, though, he’d likely be dismissed in a progressive office.
This obsession with paper over proof is why our culture is stagnating. Once credentials certified skill. Now they mostly gatekeep it. HR filters toss out innovators and people with real skills for lacking the “right” degree. Institutions value conformity more than discovery. People with beautiful résumés but weak real-world skills clog the system, while men and women with raw competence are shut out.”
https://pjmedia.com/jamie-wilson/2025/08/24/redneck-rising-why-competence-beats-credentials-n4942984
And stagnation has set in despite every more vast sums of money subsidizing journal articles, 85% of which will never be cited:
https://ncses.nsf.gov/pubs/nsf25332
Very little of the great advances in living standards enjoyed in the United States over the past two and half centuries can be attributed to federal government programs, management science, or grant programs. It happened because people with competence succeeded in achieving in spite of it all. One wonders whether all the control over progress exercised by grant-makers is actually improving living standards or serving other agendas. And one wonders too how much raw human talent caught up in the journal article producing industry would find its way to work pragmatically improving standards of living if only there were weaned from the grant-makers teats.
I like your emphasis on real world practicality over rhetoric
In your view, does a declining wage premium for US college education indicate a reduction in productivity for that sector? It seems difficult to extract the supply demand effect on prices from a more direct measure of productivity like "graduates produced per labor hour". I wonder if the "cost disease" framing is allowing people to lump other factors and sources of inefficiency into the excusing the problem (including declining productivity and something like increasing the supply of graduates reducing the value of the degree).