Baumol Effect

Post by anonuser123456 » Tue, Jul 16, 2019, 2:14 PM UTC

Lerc wrote: post #49

mrfredward wrote: post #40

Earlier quoted context omitted.

Musicians are used instead of imaginary button pressers because this is a real world effect. Think about it this way...assume everyone is paid fairly for the value of their work, no "exploitation" (although that's a tough thing to impartially define). A factory worker who does 10% of the work in producing 1000 widgets per day can enjoy a much higher standard of living than his grandfather who made 5 widgets a day wit…

The modern doctor is far more productive. She's healing 10 highly productive units. In fact I think that could generalise for all service based work. Providing a service enables people to not have to do the thing themselves. As such the productivity of the service can be considered a factor of the productivity of the people they are providing the service for.

Post by mrfredward » Tue, Jul 16, 2019, 3:18 PM UTC

Lerc wrote: post #49

mrfredward wrote: post #40

Earlier quoted context omitted.

Musicians are used instead of imaginary button pressers because this is a real world effect. Think about it this way...assume everyone is paid fairly for the value of their work, no "exploitation" (although that's a tough thing to impartially define). A factory worker who does 10% of the work in producing 1000 widgets per day can enjoy a much higher standard of living than his grandfather who made 5 widgets a day wit…

The modern doctor is far more productive. She's healing 10 highly productive units. In fact I think that could generalise for all service based work. Providing a service enables people to not have to do the thing themselves. As such the productivity of the service can be considered a factor of the productivity of the people they are providing the service for.

Post by papln » Tue, Jul 16, 2019, 5:53 PM UTC

anm89 wrote: post #34

barrkel wrote: post #33

Earlier quoted context omitted.

> Do they really believe the value of playing music is derived solely from the effort to produce it If you remember anything from your economics courses, you should remember that in an efficient market, the price of something should decline to its marginal cost of production, due to competition undercutting the overpriced competitors. Your point might be relevant if there are wild swings in the demand for music.

And has that happened? Instead top trained musicians command huge salaries and people pay out the ass to see them. "In an efficient market" Well we aren't living in a perfectly efficient vacuum so who cares? You are point in case what Im talking about. You believe that the sanctity of your theoretical view of the world is more important than what happens in the real world. I could argue about what happens to musician…

Post by papln » Tue, Jul 16, 2019, 5:58 PM UTC

devit wrote: post #28

Isn't the premise that "real wage growth is closely tied to labor productivity changes [of that particular job, in all cases]" just completely wrong in itself? If increased productivity (of everyone in a profession due to some new technology) means less people are needed in a given profession, demand for employees decreases and thus wages go DOWN along with product prices. Also the "natural equilibrium state" for wag…

Post by papln » Tue, Jul 16, 2019, 6:05 PM UTC

legoto wrote: post #18

perfmode wrote: post #17

> Baumol and Bowen pointed out that the same number of musicians is needed to play a Beethoven string quartet today as was needed in the 19th century; the productivity of classical music performance has not increased. it’s kind of odd to consider a performance more productive if it can be done with fewer people. what if productivity is being able to entertain more people with the same number of performers?

Actually, I can 'play' a Beethoven string quartet from my phone by myself. So technically classical music performance productivity, in the loosest definition possible, has increased. Of course, as you mentioned, that could be considered an arbitrary metric.