I am currently reading the book, "The Cost Disease" that tries to explain why costs of health care and college keep going up. It says, due to their being labor intense, and highly specialized, they can't help but increase. There are some things you can't just automated. And Baumol's cost disease says that other sectors becoming more productive make things worse. In the book I am reading, it seems to indicate that there is no choice but for the public sector to keep growing, and the poor are going to require redistribution of wealth to be able to keep up with needed and essential services that aren't going to be able to be automated.
Here is Wiki on it:
http://en.wikipedia.org/wiki/Baumol's_cost_disease
And here is Forbes on it:
So, anyone here not buy that? If not, and you are familar with Baumol's cost disease, can you go into why it is bunk, and how unfettered free markets should be able to resolve everything without government involvement outside of reenforcing contracts people sign?
