Yes. The point they cannot refute: for any given level of the things GDP cannot measure, it’s better for GDP to be higher than lower. Noah is right—I think—that the whole point of this exercise is to denigrate GDP to obscure the economic costs of “the new right’s” preferred policies. It’s rather similar to the Biden Administration’s explicit denigration of cost-benefit analysis in evaluating rulemaking efforts by the federal government—“our rules are good and we shouldn’t have to show you how much they cost because economics is fake!”
Noah it’s not necessarily relevant to this post but it’s insanely hypocritical for Vance to be proselytizing about a return to Christian family values by rejecting material comforts, a life of consumption, prestige, and creature comforts. Does he realize that his boss, the POTUS, spends almost 100% of his time pursuing exactly those things, while blatantly abusing his wealth and trampling on any notion of family values. Vance’s arguments and diatribes are absolutely worthless nonsense.
Nailed it! The hypocrisy is grotesque. Trump and co. are exactly the sort of hypocrites that the founder of their faith appears to have spent much of his time on earth inveighing against.
It is hypocritical to remain in an organisation when disagreeing on central items of overall direction, especially while in an apex position in the organisation.
This is not an intern supporting a different football team than the middle manager he reports to.
All these movements like Degrowth are great at talking about how they will tear down this or that existing institution or system, but they are always short on the details for what, exactly, will replace them. Vance can only speak in vague bromides.
I think the core issue is equality right? GDP has come under criticism because politicians and economists can rightly say GDP is growing as a proxy for economic prosperity, while people feel increasingly poorer relative to their higher income peers.
Quality of life is relative, after all. We all live like kings compared to our ancestors, but if we feel like we’re stagnating while the GDP is growing, it will come under fire as a flawed yardstick.
Notably, Vance talks about abstract concepts like spiritual and moral fulfilment instead of tangible outcomes like broad-based material prosperity, because the Modern Right’s policies don’t actually create material prosperity.
"By contrast, if I left for dinner at 6 p.m. and returned to work until midnight while paying a total stranger to look after my kid, my contribution to GDP would be much higher."
Note to Vance: if you need a babysitter, probably should not hire a "total stranger."
In the US, and probably other wealthy countries, immigrants who lack advanced education and skills do a lot of low pay non-union manual work that the native born don't want to do, for obvious reasons, but especially the low pay. We still need the work immigrants do to grow, harvest, package, slaughter and butcher food., cut & mill wood and produce other building materials, construct conventional and manufactured housing, pave roads, and care for the elderly. Those jobs are all mechanized, but they still require a lot of labor and will for the foreseeable future. And that labor deserves a living wage, not poverty. Political and economic ideologues are walled off from reality. Vance is a lightweight, in spite of his education.
Yeah, it's probably going to be Rubio. Americans don't want a sanctimonious degrowther telling them how to live anymore than they want a DEI clown 'desconstructing' every aspect of their society.
You do a great job of refuting all of his ideas in his book on the merits, but I think the most plausible explanation for JD Vance is that he doesn’t actually believe any of this stuff. He made a Faustian bargain long ago to secure political power, and nothing he says now is really worth seeing through anything other than a consequentialist lens.
Maybe we should always ask: when a politician suddenly declares that GDP doesn't matter, what are they actually trying to sell us?
The pioneer of this rhetorical grandstanding was Robert F. Kennedy back in 1968, with his famous riff on how GDP measures everything except "the beauty of our poetry, the strength of our marriages, or our patriotism." What did he gain from that? Emotional buy-in from voters. If trashing an economic metric wins over a specific bloc of voters in a specific emotional state, a politician will happily talk absolute nonsense without losing a wink of sleep over driving their college Econ 101 professors to early graves.
But JD Vance’s fatal flaw is his glaring inconsistency. Almost everything he has done since entering politics completely betrays the core spirit of the very bestselling book (Hillbilly Elegy) that made him famous. Then again, silly me—I almost forgot that intellectual consistency means absolutely zero in the game of politics.
This post got me thinking: Vance is mostly wrong, but he does have a shadow of a point.
Our nation needs something to unite and define itself around. Contra Vance, that something cannot be a shared ethnic heritage or religion, because we are too diverse for that. The one thing that all Americans share is that we live under the same government; allegiance to that government, its Constitution, and its laws is therefore the only really viable basis for national unity and identity.
But here there are big problems. Trust in the government is low right now, and we have the issue of illegal immigration. Our immigration laws are not being followed because they are unfollowable: we have millions of workers in this country who are simultaneously illegal and indispensable, doing necessary jobs that need to be done cheaply, with no legal pathway for employers to fill those jobs. We are caught between the anger of those who are upset that the law is not being obeyed and also not enforced, and the anger of those who see that illegal immigrants are doing exactly what our country needs them to do and are upset by the injustice they face as a result of our broken immigration laws.
This leads me to think that comprehensive immigration reform isn’t just necessary to solve the particular problem of illegal immigrant workers; it may be an essential prerequisite to getting our nation on track to heal its current divisions and redevelop a coherent sense of national identity.
We can’t unite around our shared laws unless the laws are followable and enforceable. Unfollowable laws are effectively unenforceable. Congress needs to change our immigration laws to make them followable.
Even if our government was generally efficient and effective, do you truly believe that "well, we all live under the same government..." alone is something that will unite people?
It's almost tautological, and no one is going to hold meaningful allegiance to a system merely because it exists. No one is going to be willing to sacrifice for it.
And the creedal elements are so watered down and generic that they may as well not exist from a motivational and social unity perspective.
Ancient Rome actually did an excellent job uniting its culturally diverse people under one government, and the United States has been able to do it at least sometimes in our history.
Living under the same government, the same Constitution, and the same laws can in fact be a powerful unifying force. Feeling that the government stands for a set of laudable principles helps a lot.
I can see where your cynicism is coming from, but I think you are underestimating the government’s ability to unite the people. It’s not succeeding right now, but it could succeed if it does things better.
I believe JD Vance once referred to Trump as an opiate of the people and a toxic influence. Then he sold his soul and decided to give power a try. Now he is cosplaying as a Catholic because it's convenient branding though he argues that he is more Catholic than the pope.
Everything he says is just entitled excuses for the mediocrity of his movement and ideas.
I've been listening to the audiobook of Edward Watts The Romans. What struck me is how many of these Right wing types like talking about Rome and yet the reason Rome became ROME is because they had an explicit multicultural strategy, where they would absorb the people of conquered lands and give them citizenship to then join them and keep expanding. Two of the good emperors Trajan and Hadrian were immigrants from Spain. The xenophobes could argue that Rome's downfall came from outsourcing the military to foreign soldiers who then just took over. But without incorporating those ambitious foreigners, they never would have been more than a backwater village.
I suppose backwater village is their vision of greatness.
The fight against GDP is superficial and a bit Duginesque, but it also stems from a deep paradox: if we are "the richest people ever in history of our countries", why does mere cost of living remain relentlessly high?
It seems to me that economics is losing a valuable connection to people and their experiences when it does not study cost of living in more detail. It is Topic Nr. 1 for most voters, but just one of many topics for professional economists, who prefer topics from macro or topics interesting for big corporations and their business interests. The abundance movement is pretty much the only clearly visible exception that does not attack the question of CoL from crackpot or Marxist positions, and many people haven't even heard of the abundance movement.
Imagine if medicine didn't care about cancer or heart disease much. That would generate a lot of distrust against the entire healthcare field.
You are claiming facts that are not in evidence. Is the cost of living "high"? What does that actually mean?
For any given material standard of living, it is easier for an average American to afford that standard of living today, in the US, than it has been for any human in any society in all of past human history anywhere in the world. (Aside from a few very exceptions, which are tiny nations no richer than equivalent-sized wealthy small US states and cities.)
Now, the desires and dreams of Americans may have risen. There is really no limit to what a person may want. And if what you want is greater than what you can easily afford, that can certainly feel like the cost of living remains "relentlessly high".
But the only possible fix is also pretty straightforward: the problem is your wants, not your wealth. Adopt Buddhist attitudes. Want less.
There is no possible system of economics, no possible achievement of any nation, that can possibly keep up with the ability of a person to imagine and then desire more. Go live a 1950's-quality lifestyle, in the modern US. You will find it very, very affordable.
You sound quite jaded for a person who recommends strangers to adopt Buddhist attitudes. (FYI: 1. I am not an American, 2. My personal CoL is not that big. 3. I indeed find Buddhism attractive. 4. I still don't think that "Adopt Buddhist attitudes and want less." is an electorally viable policy in any Western democracy.)
As for the facts not in evidence, look at development of cost of various services in the US relative to inflation over decades. You will notice that especially tuition and childcare cost has outpaced both inflation and GDP growth quite significantly. For people who are non-Bhikkhu, this causes a significant financial distress, while it is not really clear WHY this development even took place.
Unlike healthcare, which can do a lot more for you than it could in 1970, and where the increased cost is at least partially driven by genuinely expensive stuff such as biological treatments, neither education nor childcare has made any enormous quality leaps that would justify its cost outpacing inflation. Sure, universities now have a bloated administration which eats the extra money; is that positive for the students, or is it just simple parasitism on a structure of a well-meant, but two-sided system of student loans? That are all interesting economic topics, but also full of conflicts of interest.
An economic researcher who'd recommend his own university to fire half of the employees and reduce the cost of tuition by half would face a lot of anger indeed.
You made a side comment about politics. That's an entirely different question. Persuasion in politics is only loosely correlated with objective reality. It's an entirely different game.
Your previous comment was complaining about bad faith on the part of the entire field of economics. You stated that there was some "deep paradox", that economics is "losing a valuable connection to people", that professional economists "prefer topics ... interesting for big corporations and their business interests". That the field of economics was as bad as if "medicine didn't care about cancer or heart disease". "Distrust against the entire [economics] field." Pretty damning criticism.
This time you seem to have a much more specific question. Why have tuition and childcare (and healthcare!) risen in cost faster than inflation and GDP growth?
That's a fine question. And it has been very well studied within economics, and is pretty well understood. If you had just asked neutrally ("I don't understand why..."), that could have spurred a productive conversation.
A short hint of the economic answers to your puzzles:
1. Healthcare: Some of this is new advanced (but very expensive) treatments, as you suggest. But also the non-market nature of the industry plays a huge role. Employer health benefits receive favorable tax treatment; and patients receive services but they are ordered by doctors and paid by insurance, so the cost/benefit tradeoff of the free market price system has only a weak effect. The provision of medicine would be entirely different if it were a normal industry where people paid (their own) cash for services, like at a fast food store.
2. Tuition: this is a scarcity issue with name brands (plus government subsidy of student loans and grants). There are only a few Harvards and Stanfords and Ivy League colleges. Those were known 100 years ago, and are still known today. In the 1980's, acceptance rates at the "best" colleges were around 15%; now they're under 5%. The overall population has grown much faster than the enrollment at the top colleges. Not only that: the fraction of adults with college degrees has grown exponentially. In 1940, it was roughly 5%; by 1960, 7.7%; today, it is roughly 38.7%. So many many many more people are competing for the limited number of "top tier" universities. And the same change in demand filters down the quality tiers of colleges. But! If you just want a "good education", and you're willing to let go of the signalling from the brand name, it's still very easy today -- and very cheap! -- to take classes (e.g. from community colleges), be educated, and earn a college degree. The internet also offers tons of high quality free online course. So you need to distinguish the average AMOUNT spent on tuition (which indeed has skyrocketed), vs. the actual COST of getting educated, if there is something you want to learn. What you are seeing is signalling from a status ("positional") good, not the cost of providing the service (which has plummeted, as expected).
3. Childcare: This is mostly Baumol's Cost Disease. It is in fact exactly BECAUSE there has been no growth in labor productivity in childcare, that the cost of childcare has risen. As overall human labor productivity increases throughout the economy -- and workers get richer and richer -- you would EXPECT that jobs that require enormous amounts of human labor to get relatively more expensive (than goods that require less labor).
Manufactured goods have plummeted in price, while the cost of human labor has skyrocketed. You may find helpful a famous quote by Agatha Christie. She said that, in her early life, she "couldn't imagine being too poor to afford servants, nor so rich as to be able to afford a car". She grew up in a house with maids and nannies and cooks and butlers. But NOT a car. She didn't consider herself rich.
There exist economies where human labor is cheap, but manufactured goods are expensive. Go live in India. You will find childcare to be very easy to afford. Per capita income in the US is about $90,000. Per capita income in India is about $3,000. (Or maybe $12,000 in PPP terms.)
The questions you now ask are good questions. But they also HAVE been well-studied in economics, and are well understood. There is no mystery or paradox. Nor have economists been ignoring the questions.
That said - to study things also means to think about potential remedies. If oncologists studied cancer for cancer's sake, without the focus on developing potential treatments, people would be mightily pissed at them, would likely think about defunding such projects, and distrust would be an issue.
As I mentioned in my original comment, aside from the Abundance movement, there does not seem to be much interest in the rows of professional economists to seek for ways that could make those burdens less burdensome. They simply observe them as if they were distant stars in a galaxy far, far away.
Which is one of the reasons why a lot of people now view the entire profession with distrust - if those experts don't even try thinking about how to mitigate such phenomena, their usefulness for the society at large is at best limited.
A few very abstract specializations like mathematics or astronomy can afford to be distant, but economics is IMHO too close to reality to be so aloof.
Oh! I forgot to mention housing. Local zoning and NIMBY attitudes have artificially restricted housing supply, so the cost of housing (in the most desirable locations) has also risen faster than incomes. You've mentioned the Abundance movement; "housing" is the #1 concern there.
Most of the answers to these kinds of questions are: the free market provides what people want. When well-intentioned non-economists try to manipulate and interfere with the free market, then the long-run impact is negative and society suffers.
(Except, perhaps, for childcare. That one is a fundamental trade off. You would love to work for an hour to afford high quality childcare for eight hours. But that requires an available labor pool that is much poorer than you are. As the opportunities get better for those other people, they no longer are willing to offer you childcare for 8 hours for wages that only cost you 1 hour of your work. You really do have to decide whether your economic vision is to keep people in poverty just so childcare is more affordable for you.)
Childcare is interesting. Here in CZ, there is a fairly vigorous debate on whether many of the (well-meant) regulations are in fact making childcare too expensive or too complicated.
A quite successful variant is called "dětské skupiny" (children's groups), where an employer or even a group of neighbours can create a lightweight nonprofit for kids of their employees or that particular neighbourhood, which does not have to satisfy as stringent requirements as a full-blown kindergarten would, and can employ even willing pensioners part-time. They tend to be quite affordable.
Fortunately we don't have strong childcare worker unions here, because I would expect them to lobby to ban this.
I think it would be an interesting research for someone to actually decamp to "exotic" countries, map various solutions there, compare them and propose some of the better ones to be introduced in the US proper.
Vance is so out of touch, he doesn’t realize that strawberries aren’t usually sold by volume, but by weight and a pint would be about 12 ounces. At my local grocery strawberries cost about $3 a pound not the $9 he claims.
I'll be brief. You are still thinking like an economist, and among those, you are one of the best. But you should add physics to your toolkit. Mass, energy, charge and momentum are CONSERVED. Coupled with the limits of time, distance, and the speed of light, we are Earth-bound, so there are limits to growth. Life requires resources of mass, energy and time. Resources are limited, and when life begins to demand resources at a greater rate than they can be created, life suffers. Substitutes can help, but they, too, are limited.
As we dig deeper and deeper to acquire the resources we need, we create waste and pollution, which accumulates, reducing efficiency of extraction. Eg. fracking now takes about a barrel of oil to get a usable barrel. SO THERE ARE PHYSICAL LIMITS TO GROWTH, and we are fast approaching growth's economic limits. Those will be enforced by climate change, where one pollution of capitalism--CO2 from fossil energy--will change the heat balance of Earth in ways that current humanity will be unable to withstand.
Solar energy, used wisely, is sufficient to last us forever. But Earthly mass, and the pollution of its extraction, are limited by time, distance, c and energy. Money spent on space travel today is wasted.,
The major problem is that current human momentum, its mass times its velocity, is so great that we can't shrink, slow, or deflect it enough to avoid shattering collision with Earth's limited resources.
Two solutions will help, related, but not likely in time to be enough: reduce supply by "degrowth" and reduce demand by fewer babies (lower fertility). You oppose both, but both are inevitable according to the laws of physics, which supersede the "laws" of economics. Lower fertility is not the only solution to cutting demand. Nature's long-established solution has been the Four Horsemen of the Apocalypse: War, Famine, Plague and Strife. In my opinion, lower fertility is preferred, helped the 2nd Law of Thermodynamics.
The real solution to our problems lies neither with economics nor physics, but with information and understanding how we think.
According to people in the 1960s, the combination of limited resources and unchecked population growth was supposed to have led to mass starvation by now. Which, as we all know, didn't happen. (And to thank for that we have the greatest human being that ever lived, Norman Borlaug: https://en.wikipedia.org/wiki/Norman_Borlaug .)
So I'm skeptical by default about arguments about finite resources leading to catastrophe. Yes, resources are finite, but since the Industrial Revolution there has been no shortage of new ways to put those same resources to better and better uses.
There's always this motte-and-bailey between "GDP isn't everything" and "GDP is totally meaningless", that makes GDP critics infuriating to debate.
Yes. The point they cannot refute: for any given level of the things GDP cannot measure, it’s better for GDP to be higher than lower. Noah is right—I think—that the whole point of this exercise is to denigrate GDP to obscure the economic costs of “the new right’s” preferred policies. It’s rather similar to the Biden Administration’s explicit denigration of cost-benefit analysis in evaluating rulemaking efforts by the federal government—“our rules are good and we shouldn’t have to show you how much they cost because economics is fake!”
Noah it’s not necessarily relevant to this post but it’s insanely hypocritical for Vance to be proselytizing about a return to Christian family values by rejecting material comforts, a life of consumption, prestige, and creature comforts. Does he realize that his boss, the POTUS, spends almost 100% of his time pursuing exactly those things, while blatantly abusing his wealth and trampling on any notion of family values. Vance’s arguments and diatribes are absolutely worthless nonsense.
Nailed it! The hypocrisy is grotesque. Trump and co. are exactly the sort of hypocrites that the founder of their faith appears to have spent much of his time on earth inveighing against.
Vance sold his soul for power sometime around 2016 I think...
Is it hypocritical to disagree with or not like your boss?
It is hypocritical to remain in an organisation when disagreeing on central items of overall direction, especially while in an apex position in the organisation.
This is not an intern supporting a different football team than the middle manager he reports to.
It's more similar to Dario Amodei and Sam Altman.
All these movements like Degrowth are great at talking about how they will tear down this or that existing institution or system, but they are always short on the details for what, exactly, will replace them. Vance can only speak in vague bromides.
"Once we deport all the immigrants and end welfare, my crackhead brother-in-law will have to get a job and all will be well."
Noah taking on Vancenomics is a bit like shooting fish in a barrel but has greater public service cred.
I think the core issue is equality right? GDP has come under criticism because politicians and economists can rightly say GDP is growing as a proxy for economic prosperity, while people feel increasingly poorer relative to their higher income peers.
Quality of life is relative, after all. We all live like kings compared to our ancestors, but if we feel like we’re stagnating while the GDP is growing, it will come under fire as a flawed yardstick.
Notably, Vance talks about abstract concepts like spiritual and moral fulfilment instead of tangible outcomes like broad-based material prosperity, because the Modern Right’s policies don’t actually create material prosperity.
Great essay. You quoted Vance writing:
"By contrast, if I left for dinner at 6 p.m. and returned to work until midnight while paying a total stranger to look after my kid, my contribution to GDP would be much higher."
Note to Vance: if you need a babysitter, probably should not hire a "total stranger."
In the US, and probably other wealthy countries, immigrants who lack advanced education and skills do a lot of low pay non-union manual work that the native born don't want to do, for obvious reasons, but especially the low pay. We still need the work immigrants do to grow, harvest, package, slaughter and butcher food., cut & mill wood and produce other building materials, construct conventional and manufactured housing, pave roads, and care for the elderly. Those jobs are all mechanized, but they still require a lot of labor and will for the foreseeable future. And that labor deserves a living wage, not poverty. Political and economic ideologues are walled off from reality. Vance is a lightweight, in spite of his education.
Yeah, it's probably going to be Rubio. Americans don't want a sanctimonious degrowther telling them how to live anymore than they want a DEI clown 'desconstructing' every aspect of their society.
He's just filling pages here, though. He doesn't actually believe this framing. Odds are he probably doesn't even understand it.
Great comment! Right on the mark!
["A]s the decline of Christianity has left us without a shared moral language"
I wonder if JD shares a moral language with his Hindu wife.
He’s as fickle with his religious beliefs as he is with his politics.
You do a great job of refuting all of his ideas in his book on the merits, but I think the most plausible explanation for JD Vance is that he doesn’t actually believe any of this stuff. He made a Faustian bargain long ago to secure political power, and nothing he says now is really worth seeing through anything other than a consequentialist lens.
Maybe we should always ask: when a politician suddenly declares that GDP doesn't matter, what are they actually trying to sell us?
The pioneer of this rhetorical grandstanding was Robert F. Kennedy back in 1968, with his famous riff on how GDP measures everything except "the beauty of our poetry, the strength of our marriages, or our patriotism." What did he gain from that? Emotional buy-in from voters. If trashing an economic metric wins over a specific bloc of voters in a specific emotional state, a politician will happily talk absolute nonsense without losing a wink of sleep over driving their college Econ 101 professors to early graves.
But JD Vance’s fatal flaw is his glaring inconsistency. Almost everything he has done since entering politics completely betrays the core spirit of the very bestselling book (Hillbilly Elegy) that made him famous. Then again, silly me—I almost forgot that intellectual consistency means absolutely zero in the game of politics.
This post got me thinking: Vance is mostly wrong, but he does have a shadow of a point.
Our nation needs something to unite and define itself around. Contra Vance, that something cannot be a shared ethnic heritage or religion, because we are too diverse for that. The one thing that all Americans share is that we live under the same government; allegiance to that government, its Constitution, and its laws is therefore the only really viable basis for national unity and identity.
But here there are big problems. Trust in the government is low right now, and we have the issue of illegal immigration. Our immigration laws are not being followed because they are unfollowable: we have millions of workers in this country who are simultaneously illegal and indispensable, doing necessary jobs that need to be done cheaply, with no legal pathway for employers to fill those jobs. We are caught between the anger of those who are upset that the law is not being obeyed and also not enforced, and the anger of those who see that illegal immigrants are doing exactly what our country needs them to do and are upset by the injustice they face as a result of our broken immigration laws.
This leads me to think that comprehensive immigration reform isn’t just necessary to solve the particular problem of illegal immigrant workers; it may be an essential prerequisite to getting our nation on track to heal its current divisions and redevelop a coherent sense of national identity.
We can’t unite around our shared laws unless the laws are followable and enforceable. Unfollowable laws are effectively unenforceable. Congress needs to change our immigration laws to make them followable.
Even if our government was generally efficient and effective, do you truly believe that "well, we all live under the same government..." alone is something that will unite people?
It's almost tautological, and no one is going to hold meaningful allegiance to a system merely because it exists. No one is going to be willing to sacrifice for it.
And the creedal elements are so watered down and generic that they may as well not exist from a motivational and social unity perspective.
Ancient Rome actually did an excellent job uniting its culturally diverse people under one government, and the United States has been able to do it at least sometimes in our history.
Living under the same government, the same Constitution, and the same laws can in fact be a powerful unifying force. Feeling that the government stands for a set of laudable principles helps a lot.
I can see where your cynicism is coming from, but I think you are underestimating the government’s ability to unite the people. It’s not succeeding right now, but it could succeed if it does things better.
Vance's job depends on his economic ignorance.
I believe JD Vance once referred to Trump as an opiate of the people and a toxic influence. Then he sold his soul and decided to give power a try. Now he is cosplaying as a Catholic because it's convenient branding though he argues that he is more Catholic than the pope.
Everything he says is just entitled excuses for the mediocrity of his movement and ideas.
I've been listening to the audiobook of Edward Watts The Romans. What struck me is how many of these Right wing types like talking about Rome and yet the reason Rome became ROME is because they had an explicit multicultural strategy, where they would absorb the people of conquered lands and give them citizenship to then join them and keep expanding. Two of the good emperors Trajan and Hadrian were immigrants from Spain. The xenophobes could argue that Rome's downfall came from outsourcing the military to foreign soldiers who then just took over. But without incorporating those ambitious foreigners, they never would have been more than a backwater village.
I suppose backwater village is their vision of greatness.
The fight against GDP is superficial and a bit Duginesque, but it also stems from a deep paradox: if we are "the richest people ever in history of our countries", why does mere cost of living remain relentlessly high?
It seems to me that economics is losing a valuable connection to people and their experiences when it does not study cost of living in more detail. It is Topic Nr. 1 for most voters, but just one of many topics for professional economists, who prefer topics from macro or topics interesting for big corporations and their business interests. The abundance movement is pretty much the only clearly visible exception that does not attack the question of CoL from crackpot or Marxist positions, and many people haven't even heard of the abundance movement.
Imagine if medicine didn't care about cancer or heart disease much. That would generate a lot of distrust against the entire healthcare field.
You are claiming facts that are not in evidence. Is the cost of living "high"? What does that actually mean?
For any given material standard of living, it is easier for an average American to afford that standard of living today, in the US, than it has been for any human in any society in all of past human history anywhere in the world. (Aside from a few very exceptions, which are tiny nations no richer than equivalent-sized wealthy small US states and cities.)
Now, the desires and dreams of Americans may have risen. There is really no limit to what a person may want. And if what you want is greater than what you can easily afford, that can certainly feel like the cost of living remains "relentlessly high".
But the only possible fix is also pretty straightforward: the problem is your wants, not your wealth. Adopt Buddhist attitudes. Want less.
There is no possible system of economics, no possible achievement of any nation, that can possibly keep up with the ability of a person to imagine and then desire more. Go live a 1950's-quality lifestyle, in the modern US. You will find it very, very affordable.
You sound quite jaded for a person who recommends strangers to adopt Buddhist attitudes. (FYI: 1. I am not an American, 2. My personal CoL is not that big. 3. I indeed find Buddhism attractive. 4. I still don't think that "Adopt Buddhist attitudes and want less." is an electorally viable policy in any Western democracy.)
As for the facts not in evidence, look at development of cost of various services in the US relative to inflation over decades. You will notice that especially tuition and childcare cost has outpaced both inflation and GDP growth quite significantly. For people who are non-Bhikkhu, this causes a significant financial distress, while it is not really clear WHY this development even took place.
Unlike healthcare, which can do a lot more for you than it could in 1970, and where the increased cost is at least partially driven by genuinely expensive stuff such as biological treatments, neither education nor childcare has made any enormous quality leaps that would justify its cost outpacing inflation. Sure, universities now have a bloated administration which eats the extra money; is that positive for the students, or is it just simple parasitism on a structure of a well-meant, but two-sided system of student loans? That are all interesting economic topics, but also full of conflicts of interest.
An economic researcher who'd recommend his own university to fire half of the employees and reduce the cost of tuition by half would face a lot of anger indeed.
You made a side comment about politics. That's an entirely different question. Persuasion in politics is only loosely correlated with objective reality. It's an entirely different game.
Your previous comment was complaining about bad faith on the part of the entire field of economics. You stated that there was some "deep paradox", that economics is "losing a valuable connection to people", that professional economists "prefer topics ... interesting for big corporations and their business interests". That the field of economics was as bad as if "medicine didn't care about cancer or heart disease". "Distrust against the entire [economics] field." Pretty damning criticism.
This time you seem to have a much more specific question. Why have tuition and childcare (and healthcare!) risen in cost faster than inflation and GDP growth?
That's a fine question. And it has been very well studied within economics, and is pretty well understood. If you had just asked neutrally ("I don't understand why..."), that could have spurred a productive conversation.
A short hint of the economic answers to your puzzles:
1. Healthcare: Some of this is new advanced (but very expensive) treatments, as you suggest. But also the non-market nature of the industry plays a huge role. Employer health benefits receive favorable tax treatment; and patients receive services but they are ordered by doctors and paid by insurance, so the cost/benefit tradeoff of the free market price system has only a weak effect. The provision of medicine would be entirely different if it were a normal industry where people paid (their own) cash for services, like at a fast food store.
2. Tuition: this is a scarcity issue with name brands (plus government subsidy of student loans and grants). There are only a few Harvards and Stanfords and Ivy League colleges. Those were known 100 years ago, and are still known today. In the 1980's, acceptance rates at the "best" colleges were around 15%; now they're under 5%. The overall population has grown much faster than the enrollment at the top colleges. Not only that: the fraction of adults with college degrees has grown exponentially. In 1940, it was roughly 5%; by 1960, 7.7%; today, it is roughly 38.7%. So many many many more people are competing for the limited number of "top tier" universities. And the same change in demand filters down the quality tiers of colleges. But! If you just want a "good education", and you're willing to let go of the signalling from the brand name, it's still very easy today -- and very cheap! -- to take classes (e.g. from community colleges), be educated, and earn a college degree. The internet also offers tons of high quality free online course. So you need to distinguish the average AMOUNT spent on tuition (which indeed has skyrocketed), vs. the actual COST of getting educated, if there is something you want to learn. What you are seeing is signalling from a status ("positional") good, not the cost of providing the service (which has plummeted, as expected).
3. Childcare: This is mostly Baumol's Cost Disease. It is in fact exactly BECAUSE there has been no growth in labor productivity in childcare, that the cost of childcare has risen. As overall human labor productivity increases throughout the economy -- and workers get richer and richer -- you would EXPECT that jobs that require enormous amounts of human labor to get relatively more expensive (than goods that require less labor).
Manufactured goods have plummeted in price, while the cost of human labor has skyrocketed. You may find helpful a famous quote by Agatha Christie. She said that, in her early life, she "couldn't imagine being too poor to afford servants, nor so rich as to be able to afford a car". She grew up in a house with maids and nannies and cooks and butlers. But NOT a car. She didn't consider herself rich.
There exist economies where human labor is cheap, but manufactured goods are expensive. Go live in India. You will find childcare to be very easy to afford. Per capita income in the US is about $90,000. Per capita income in India is about $3,000. (Or maybe $12,000 in PPP terms.)
The questions you now ask are good questions. But they also HAVE been well-studied in economics, and are well understood. There is no mystery or paradox. Nor have economists been ignoring the questions.
OK, I actually enjoyed your response now.
That said - to study things also means to think about potential remedies. If oncologists studied cancer for cancer's sake, without the focus on developing potential treatments, people would be mightily pissed at them, would likely think about defunding such projects, and distrust would be an issue.
As I mentioned in my original comment, aside from the Abundance movement, there does not seem to be much interest in the rows of professional economists to seek for ways that could make those burdens less burdensome. They simply observe them as if they were distant stars in a galaxy far, far away.
Which is one of the reasons why a lot of people now view the entire profession with distrust - if those experts don't even try thinking about how to mitigate such phenomena, their usefulness for the society at large is at best limited.
A few very abstract specializations like mathematics or astronomy can afford to be distant, but economics is IMHO too close to reality to be so aloof.
Oh! I forgot to mention housing. Local zoning and NIMBY attitudes have artificially restricted housing supply, so the cost of housing (in the most desirable locations) has also risen faster than incomes. You've mentioned the Abundance movement; "housing" is the #1 concern there.
Most of the answers to these kinds of questions are: the free market provides what people want. When well-intentioned non-economists try to manipulate and interfere with the free market, then the long-run impact is negative and society suffers.
(Except, perhaps, for childcare. That one is a fundamental trade off. You would love to work for an hour to afford high quality childcare for eight hours. But that requires an available labor pool that is much poorer than you are. As the opportunities get better for those other people, they no longer are willing to offer you childcare for 8 hours for wages that only cost you 1 hour of your work. You really do have to decide whether your economic vision is to keep people in poverty just so childcare is more affordable for you.)
Childcare is interesting. Here in CZ, there is a fairly vigorous debate on whether many of the (well-meant) regulations are in fact making childcare too expensive or too complicated.
A quite successful variant is called "dětské skupiny" (children's groups), where an employer or even a group of neighbours can create a lightweight nonprofit for kids of their employees or that particular neighbourhood, which does not have to satisfy as stringent requirements as a full-blown kindergarten would, and can employ even willing pensioners part-time. They tend to be quite affordable.
Fortunately we don't have strong childcare worker unions here, because I would expect them to lobby to ban this.
I think it would be an interesting research for someone to actually decamp to "exotic" countries, map various solutions there, compare them and propose some of the better ones to be introduced in the US proper.
Vance is so out of touch, he doesn’t realize that strawberries aren’t usually sold by volume, but by weight and a pint would be about 12 ounces. At my local grocery strawberries cost about $3 a pound not the $9 he claims.
I'll be brief. You are still thinking like an economist, and among those, you are one of the best. But you should add physics to your toolkit. Mass, energy, charge and momentum are CONSERVED. Coupled with the limits of time, distance, and the speed of light, we are Earth-bound, so there are limits to growth. Life requires resources of mass, energy and time. Resources are limited, and when life begins to demand resources at a greater rate than they can be created, life suffers. Substitutes can help, but they, too, are limited.
As we dig deeper and deeper to acquire the resources we need, we create waste and pollution, which accumulates, reducing efficiency of extraction. Eg. fracking now takes about a barrel of oil to get a usable barrel. SO THERE ARE PHYSICAL LIMITS TO GROWTH, and we are fast approaching growth's economic limits. Those will be enforced by climate change, where one pollution of capitalism--CO2 from fossil energy--will change the heat balance of Earth in ways that current humanity will be unable to withstand.
Solar energy, used wisely, is sufficient to last us forever. But Earthly mass, and the pollution of its extraction, are limited by time, distance, c and energy. Money spent on space travel today is wasted.,
The major problem is that current human momentum, its mass times its velocity, is so great that we can't shrink, slow, or deflect it enough to avoid shattering collision with Earth's limited resources.
Two solutions will help, related, but not likely in time to be enough: reduce supply by "degrowth" and reduce demand by fewer babies (lower fertility). You oppose both, but both are inevitable according to the laws of physics, which supersede the "laws" of economics. Lower fertility is not the only solution to cutting demand. Nature's long-established solution has been the Four Horsemen of the Apocalypse: War, Famine, Plague and Strife. In my opinion, lower fertility is preferred, helped the 2nd Law of Thermodynamics.
The real solution to our problems lies neither with economics nor physics, but with information and understanding how we think.
--johnweigant@comcast.net
According to people in the 1960s, the combination of limited resources and unchecked population growth was supposed to have led to mass starvation by now. Which, as we all know, didn't happen. (And to thank for that we have the greatest human being that ever lived, Norman Borlaug: https://en.wikipedia.org/wiki/Norman_Borlaug .)
So I'm skeptical by default about arguments about finite resources leading to catastrophe. Yes, resources are finite, but since the Industrial Revolution there has been no shortage of new ways to put those same resources to better and better uses.
There are not physical limits to economic growth because "economic growth" means trading things faster, not using energy faster.