Archive for January, 2013

Productivity and the value of Labor

Tuesday, January 1st, 2013

Thought of the day:

Prosperity that resulted from manufacturing jobs happened because even as the industrial revolution made human muscle worthless, it made human brains more valuable. Everyone who lost their muscle job got a new job for doing some menial but not capital-substituteable mental task.

This is hardly something that can be taken for granted for all productivity increases though. There is no guarantee that labor will always remain valuable.

But what about Baumol’s Disease?¬†If you think Baumol’s disease will dominate, what jobs should you aim for?