Book Review: Why Are The Prices So D*mn High?

A follow-up to Scott's famous Cost Disease essay, reviewing Tabarrok & Helland's book arguing the Baumol effect explains rising health/education costs (the Beethoven-string-quartet productivity parable; slow-productivity sectors get relatively pricier as other sectors' wages rise). Scott finds it convincing and WANTS to believe (it would mean rising costs are a benign consequence of growth, not decay/rent-seeking), but raises three incisive objections he leaves open: real factory wages haven't actually risen; teacher salaries rose only ~6% while per-pupil cost doubled, and doctor pay is flattish and only ~20% of spending; and the Baumol effect explains costlier-but-not-less-affordable, yet college and healthcare have genuinely become less affordable. Useful, honest critical review.

Quality 69 · Strong. Strong (69): a sharp, genuinely useful engagement with an important explanation (the three objections are incisive), but a review that leaves the question unresolved, so upper-Strong.

Claude’s paradigm shift 48 · Moderate. Moderate (48): engages an existing debate (his own cost-disease work + Baumol); the objections are fresh but it's interpretive.

Real-world impact 3 · Moderate. Moderate (3): part of the influential cost-disease discussion within the rationalist/econ-blog sphere; niche footprint.