Moykr is a specialist in economic history. Much of what he writes makes good sense, except that the context is all wrong. For example, he revels in the great product of the pharmaceutical industry, but the business press expresses regret that the profit-driven incentives of the industry cause it is scientists to concentrate medicines that can make a profit rather than serve the public's health needs. For example, pet medicine is a higher priority than tropical medicine. With the recent Ebola scare, one can easily imagine how failures of tropical medicine can threaten affluent pet owners.
Although the marginal costs of medicine might be very low, as Gene points out, the market price can be quite high, pumping up the Gross Domestic Product (because of the monopolistic privileges of intellectual property), but then one wonders why as sophisticated a writer as Moykr would associate progress with the Gross Domestic Product. Of course, there is some rough correlation, but hardly enough to regard the Gross domestic Product is a measure of progress. Mokyr's concern is with secular stagnation. Indeed, as one sees something like secular stagnation for the bottom part of the income distribution, since the wealth that Mokyr's technology largely accrues to the more affluent. Yes, many of the less affluent can afford a smart phone, but that measure is even less accurate than the gross domestic product. , On Sat, Aug 9, 2014 at 2:31 PM, Eugene Coyle <[email protected]> wrote: > 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 > -- Michael Perelman Economics Department California State University Chico, CA 95929 530 898 5321 fax 530 898 5901 http://michaelperelman.wordpress.com
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