A recent news piece, “The rising cost of education and health care is less troubling than believed”, reacts to Helland and Tabarrok’s short book just released by the Mercatus Center titled, _Why are the Prices so D*mn High_? Helland and Tabarrok say the answer is almost entirely the Baumol effect—i.e., that uneven productivity gains lead to inverse increases in unit price.
In 1826 the average hourly wage for a production worker was $1.