Some thoughts on the Cost Disease

Matthew Skala: “So there’s a thing that seems to be related to the unimaginably extreme decrease in clothing prices: the decrease in prices has gone hand-in-hand with the shifting of labour, mostly to machines but also to human beings in other countries, away from the end users. Instead of your clothing being made by you or the women of your family, now it’s made by machines operated by strangers very far away, and that is why it’s so much cheaper, and also why you (or, again, the women of your family…) have lost the skills and even the mental models associated with it.

I don’t know what exactly that has to do with education and health care. But I note that very much of the decrease in clothing costs seems to come from automation. In what way is automation relevant to education and health care?”