@akhilrao "active labor market policy" is a terrible name for the great idea that people should be actively thinking about valuable stuff that could be done, and encouraging people without wonderfully rewarding uses of their time to explore those. we should do a lot more of that! but that's largely independent of questions of remuneration. sometimes it may be directly remunerative, sometimes not. 1/

@akhilrao prosperity, though, can be shared quite directly. "obsolescence rents" can only be extracted by people with bargaining power because forseeable obsolescence makes new entrants scarce, and that's fine as far as it goes. but there should be other measures of social value than bargaining power in private labor markets, and we should use the state to pay socially productive people whose productivity lacks a business model or scarce factor to deploy for bargaining. 2/

@akhilrao (i'm not sure this is quite responsive? basically, it's good to pay people, it makes their life better, and it's good for people to do work that makes other people's lives better. market valuation and remuneration of labor is one way to get those things, and it's great, but not sufficient or perfect. we should use other tools, funded by the public purse, rather than hope that quirks of bargaining power and cost diseases can somehow smudge away the flaws of private labor markets.) /fin

@dpp i think that any ex ante metrics would be badly gamed. 1/

@dpp perhaps promising alternatives are consistent granting of ex post awards for projects that prove notable and/or popular (with lots of subjectivity intentionally baked into notability) and decentralized awarding, allocate small amounts to large groups of people willing to take on a role, on a lightly enforced but strongly telegraphed norm that allocation should be based on project value (also intentionally subjective!) and self- or friend-dealing is prohibited. 2/

@dpp (in general i think we've underexplored the "grant everyone $100 to allocate to public goods of their choice" approach. sure there will be noise and self-dealing, bad anecdotes to inspire clickbaity outrage, but i think the vast majority will be allocated based on people's very diverse perceptions of value, which is what we ought to want.) /fin

@akhilrao i don't think it's a great take. we (in aggregate) want productivity improvements, rather than a high price to keep labor bid into lower productivity work. people in high productivity gigs (according to cost disease assumptions, if not experienced reality) get paid well — that's the reason you have to bid high to keep people in low productivity gigs. it'd be better if everyone was just paid well for high productivity rather than for low, ceteris paribus. 1/

@akhilrao all that said, there are lots of circumstances where "cost disease" shouldn't be taken as a disease at all. for example, a teacher of a small class is, superficially, a cost disease example: holding class sizes and learning pace roughly constant, productivity seems not to have increased. but we would not want productivity in that sense to increase, because the actual value comes from a not-scalable human connection, not anything a MOOC can provide. 2/

@akhilrao the better way of thinking about this kind of case is that there's no cost disease because productivity HAS increased. the value of the kind of education that can only come from direct human relationships has increased as the economy has grown more specialized, complex, and prosperous. so even though the goods delivered are precisely the same, it's not really a cost disease, just maintaining a similar share of value provided. /fin

@akhilrao (epilogue: i think a key question is, would we WANT "productivity" in the tangible-outputs-to-inputs sense to increase in a sector. in the infamous string quartet example, the answer is "no" — by assumption, people don't want recorded music, but an actual live quartet. then it's not really a cost disease, is it? we are perfectly capable playing a streamed recording, but instead we pay up for the quartet. we are valuing the quartet more highly, then, not suffering from cost disease. 1/

@akhilrao contrast that with a construction worker framing a new home with a nail gun. if five workers could be replaced by one person and five robots for half the cost, no intangible value would persuade us to keep the five workers, as long as those workers could find other remunerative things to do. so the construction worker's rising wages for the same framing represents cost disease, while the iconic string quartet example actually does not.) /fin