alt Hacker NewsThe Baumol Effect and Jevons paradox are related
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I don't think any 'interesting thought' that serves as a conclusion to an article should begin like so:
| 'With radiologists, I’m totally speculating and I have no idea what the actual workflow of a radiologist involves...'
Speculation from a place of ignorance is suitable for bar-side musings, not an article that wants us to take it seriously.
you accidentally knock a hole in your wall,
it’s probably cheaper to buy a flatscreen TV
and stick it in front of the hole
What does the HN panel say? Is it a solution? Or does it have any downside?
that example of the radiologist review cases touches on one worry i have about automation with human-in-the-loop for safety. specifically that a human in the loop wont work as a safeguard unless they are meaningfully engaged beyond being a simple reviewer.
how do you sustain attention and thoughtfully review radiological scans when 99% of the time you agree with the automated assessment? i'm pretty sure that no matter how well trained the doctor is they will end up just spamming "LGTM" after a while.
The blue-line/red-line diverging price graph is such a great litmus test for someone's ability to do even a single round of interrogation.
Here's the question to ask:
Which of these have economies of scale, are scale-neutral, or have diseconomies of scale?
Ta-da!
Three sectors that have diseconomies of scale: education, healthcare, housing.
Essential services aggregate in the red because non-essential services that have diseconomies of scale... wait for it... never achieve scale! Then you have government step in because the services are important (often with hard-to-capture upside, ergo limited incentive for private investment to begin with), and now you have an aggregation of essential, expensive, government-involved services.
> If you can make $30 an hour as a digital freelance marketer (a job that did not exist a generation ago), then you won’t accept less than that from working in food service. And if you can make $150 an hour installing HVAC for data centers, you’re not going to accept less from doing home AC service.
Plenty of people work jobs for less money because they enjoy the work more. I’m not sure if it’s worth reading what follows if most of the argument is predicated on this claim.
Aren’t real wages on the decline? We can afford to spend $100 on dog walking because $100 isn’t what it used to be.
> Whereas, after a century of productivity gains, the average American middle-class household can comfortably manage a new car lease every two years, but needs to split the cost of a single nanny with their neighbors.
...
> Why it costs $100 a week to walk your dog (but you can afford it)
Two signs this article is coming from too-privileged a point of view for its observations to be meaningful or useful to 99% of the population.
> The last piece of this economic riddle, which we haven’t mentioned thus far, is that elected governments (who appoint and direct employment regulators) often believe they have a mandate to protect people’s employment and livelihoods. And the straightforward way that mandate gets applied, in the face of technological changes, is to protect human jobs by saying, “This safety function must be performed or signed off by a human.”
I mean the role of you to go jail if something goes wrong is pretty important.... It unfortunately often doesn't work but the lengths at which well paid people go to avoid and then shorten prison sentences really should demonstrate this is the only punishment that works.
We cannot have computers solely in charge of stuff because the computer cannot have responsibility. If you take the radiologist out of the loop then you should take the responsibility.
>If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall.
Is it cheaper than buying a TV, and then having someone come install it on your wall? More meaningless drivel from Marc Andreesen.
This comment on the article is more reasonable than the entire article:
https://www.a16z.news/p/why-ac-is-cheap-but-ac-repair-is/com...
It’s not like people are piling into AI at the expense of other jobs, tech hiring and wages on general seem down relative to a couple of years ago. Hard to see the link between either effect and AI
Also weird that Dutch disease wasn’t mentioned at all, it actually seems more relevant.
Dupe: https://news.ycombinator.com/item?id=45807542 (two weeks ago: 134 points, 184 comments)
> it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole
Says a lot about American politics, figuratively speaking
The basic premise here is that productivity growth in one sector, increaes wages in other sectors. But we already know that productivity and wage growth are increasingly disconnected. Thsi si not to say the affect doesnt exist but that it must therefore be small or limited in scope. https://www.epi.org/productivity-pay-gap/
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Each of these phenomena have a name: there’s Jevons Paradox, which means, “We’ll spend more on what gets more productive”, and there’s the Baumol Effect, which means, “We’ll spend more on what doesn’t get more productive.”
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I don't think that's exactly right. Jevons says "we consume more on what gets more productive" and Baumol says "the unit cost increases for that which is less productive".
The typical example for Baumol is the orchestra (or live music) which is today much more expensive than in the 1800s. I don't think we spend more in aggregate than we did in the 1800s!
Edit as I continue reading: ```
Other goods and services, where AI has relatively less impact, will become more expensive - and we’ll consume more of them anyway. ```
This definitely NOT the case. Basically the author is saying we will consume more of everything, which is not true! We famously stopped using horses and all the relevant industries.
The unit cost for horses, however, did increase!
What the author should be stating is that the new production bottlenecks will command a higher price and probably play a bigger role in the economy, but not everything gets to be a new bottleneck.