I have begun to see this fatuous analysis everywhere -- Tyler Cowan in the NYT, even Jeremy Rifkin, no whiz but usually more careful. Today's example is from the Wall St. Journal.
By turning the WSJ into trash, Murdock allowed fools access to the paper. "What Today's Economic Gloomsayers Are Missing Science is enabling invention like never before and in ways that will improve life but isn't captured by GDP statistics." by JOEL MOKYR (Mr. Mokyr is professor of economics and history at Northwestern University.) full article at: = http://online.wsj.com/articles/joel-mokyr-what-todays-economic-gloomsayers= -are-missing-1407536487?mod=3Dhp_opinion After extolling the wonders of science and technology, Mokyr says: > Many new goods and services are expensive to design, but once they work, they can be copied at very low or zero cost. That means they tend to contribute little to measured output even if their impact on consumer welfare is very large. Economic assessment based on aggregates such as gross domestic product will become increasingly misleading, as innovation accelerates. Dealing with altogether new goods and services was not what these numbers were designed for, despite heroic efforts by Bureau of Labor Statistics statisticians. Yes things can be copied at low cost, but that doesn't mean they will be sold at a low price. Hasn't Mokyr been reading the WSJ's articles on the new drugs for Heptitas C? One new drug, Sovaldi, is priced at $1,000.00 a pill and treatment requires 84 doses -- 84 days for a total of $84,000. Producing the pill costs very little. (We know that because the Drug company is selling it in Egypt for, -- instead of $84,000 per customer -- $900, a 99% discount. The vendor is presumably making money at that price in Egypt, not including overhead costs. That pill is showing up in the US GDP statistics as $84,000 per customer. Marginal cost isn't total cost, a professor of economics should have learned that. Gene _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
