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ON THE NEW MILITARY PERIL:
TOWARD THEORY AND POLICY
• OR THE COST DISEASE:
DROPPING THE OTHER SHOE
• In any group whose
performance is
heterogeneous,
• the performance of some of
the members must be below
average
• Baumol’s fourth tautology
The cost-disease other side:
the falling real prices
• In 1919, the average U.S. worker had to labor
nearly an hour to buy a pound of chicken. At
today’s wages and poultry prices, less than
five minutes of labor is required
• Color TV labor-time cost down 98 % 1954-97
• VCR cost down 96% 1972-97
• Microwave oven down 99% 1947-1997
• Now Computer cost per MIPS down to 27
minutes of labor
• From 733,000 lifetimes of labor in 1944!!!
War..As it Used to be
• “Pecunia Nervus Belli” (Money is the sinew of
war) “...the favorite Latin tag of the [mid-16th
century ].”
• “There were, Louis XII [king of France,1498 1515] was told by one of his counselors, three
things a king required in order to .fight wars:
First, money; second, money; and third,
money.”Jones, 1994, p.130.
War—as it is Evolving
• “The AK-47 has become the world's
most prolific and effective combat
weapon, a device so cheap and
simple that it can be bought in many
countries for less than the cost of a
live chicken.”
•
Larry Kahaner, "Weapon of Mass Destruction," Washington Post,
November 26, 2006, available at http://www.washingtonpost.com/.
Web address for more computer
paintings
• http://www.stern.nyu.edu/-wbaumol