Cost Disease

#thoughts #capitalism

Everything is built so expensive.
We built the space needle in a year (400 days) for about $4.5 million. Today, that would be ~$45 million.

We just (2017) spent $100 million to renovate the Space Needle in a similar time frame.

College education is waaay up.
Part of this is because we're willing to pay it.

I don’t know if there’s an equivalent of “test scores” measuring how well colleges perform, so just use your best judgment. Do you think that modern colleges provide $18,000/year greater value than colleges did in your parents’ day? Would you rather graduate from a modern college, or graduate from a college more like the one your parents went to, plus get a check for $72,000?

Why

Labor increases
Safety regulations

Bureaucracy

You pay an accountant $300 to figure out how much money you owe in taxes. This doesn't move anyone's needle forward in any way. It's pushing a circle, effort for no reward.

Ballooning

(from SSC, again)

Or, once again, just ask yourself: do you think most poor and middle class people would rather:

Rent a modern house/apartment
Rent the sort of house/apartment their parents had, for half the cost

II.

So, to summarize: in the past fifty years, education costs have doubled, college costs have dectupled, health insurance costs have dectupled, subway costs have at least dectupled, and housing costs have increased by about fifty percent. US health care costs about four times as much as equivalent health care in other First World countries; US subways cost about eight times as much as equivalent subways in other First World countries.

I worry that people don’t appreciate how weird this is. I didn’t appreciate it for a long time. I guess I just figured that Grandpa used to talk about how back in his day movie tickets only cost a nickel; that was just the way of the world. But all of the numbers above are inflation-adjusted. These things have dectupled in cost even after you adjust for movies costing a nickel in Grandpa’s day. They have really, genuinely dectupled in cost, no economic trickery involved.

What about technology?

And this is especially strange because we expect that improving technology and globalization ought to cut costs. In 1983, the first mobile phone cost $4,000 – about $10,000 in today’s dollars. It was also a gigantic piece of crap. Today you can get a much better phone for $100. This is the right and proper way of the universe. It’s why we fund scientists, and pay businesspeople the big bucks.

Why

Bureaucracy

Ballooning

What about technology?

See Also