Baumol's cost disease: Anyone here not buy it?

[richardhutnik]

badgenome said:

richardhutnik said:
Thing is, unless there can come some efficiency breakthroughs, the costs end up rising higher than other things, partly due to the reality that you can't reduce the amount of labor demanded. That is a kicker part to it. I suggest others do more research into it. I haven't found anyone who speaks out and says it is flat out false. Side discussions here, and why it is important and I bring it up, is that the end result is that government sector and welfare will grow, in order to get people to be able to afford needed services. It is called a disease because of the effect being like that and needing to be cured.

But again, the cost only seems to be growing so out of control in areas where the government is tampering with or outright destroying the price system. If welfare is to be done by the government, Hayek makes a very good case that it ought to be done through cash transfers and not with the government providing or subsidizing those services.

Read more on Baumol's Cost Disease.  The argument there is that Is NOT the case.  Yes, the government can make it worse, but it is a systemic issue that can happen in markets, even if free, if certain conditions exists.  To say that the government alone is responsible for it is false, if you consider Baumol's arguments valid.  The thing is that, you can't just have markets fix everything, if resourses are both needed and lacking, and the standard of living rises to make the demands on them so.  Well, you can have a free market situation, but the end result is the services get priced out of market, so people end up lacking basic services like health coverage, because they can't afford it.  Lack of government intervention doesn't reverse this.  That is the issue with Baumol's cost disease that needs to be refuted here.  This is post Hayek's work.