1 / 13

The New Military Peril: Addressing Baumol's Cost Disease

Explore the implications of Baumol's theory on military performance and cost evolution. From historical perspectives to modern weaponry, delve into the changing dynamics of war funding and technology advancement.

emelda
Download Presentation

The New Military Peril: Addressing Baumol's Cost Disease

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ON THE NEW MILITARY PERIL: TOWARD THEORY AND POLICY • OR THE COST DISEASE: DROPPING THE OTHER SHOE

  2. In any group whose performance is heterogeneous, • the performance of some of the members must be below average • Baumol’s fourth tautology

  3. 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!!!

  4. 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.

  5. 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/.

  6. Web address for more computer paintings • http://www.stern.nyu.edu/-wbaumol

More Related