Why so costly?

Technology constructs things better. Not morally, of course: military technology kills and mutilates people more efficiently, surveillance technology invades privacy more pervasively, and so forth. But improved technology leads to more output from less input for any system. Almost a tautology, right? I mean, thats the whole phase. So why, in our technology-laced world, do certain domains keep getting more expensive and least efficient?

This is veering dangerously close to economics, and Im anything but an economist, so let me rapidly outsource most of that talk to Slate Star Codex, talking about cost illnes, and Pedestrian Observations, discussing infrastructure. First, Scott Alexander, whos always worth read, in a twoparter at SSC 😛 TAGEND

in the past fifty years, education costs have doubled, college costs have dectupled, health insurance costs have dectupled, subway costs have at least dectupled, and housing expenses have increased by about fifty percent. US health care expenses about four times as much as equivalent health care in other First World countries; US subways expense about eight periods as much as equivalent metroes in other First World countries. I worry that people dont appreciate how weird this is. [] And this is especially strange because we expect that improving technology and globalization ought to cut costs. [] If technology increases productivity for skilled laborers in other industries, then less susceptible industries might end up footing the bill since they have to pay their workers more. Theres merely one problem: health care and education arent paying their workers more; in fact, quite the opposite. [] health care and education expenses have managed to increase by ten periods without a single cent of the gains going to teachers, physicians, or nurses.

Note that the cost disease discussed here is posed as distinct from Baumols cost disease known to economists. And before you think, Aha, I know the reason why!( And it happens to be my pet hobbyhorse !), please go read both of those posts, where a whole cornucopia of causes are considered in great detail. In particular

institutional hazard tolerance( e.g. for lawsuits)

free riders

administrative bloat

organizational intricacy

widespread marketplace failures due to trickery, or to the difficulty of gathering accurate information

America only isnt very good at regulation

lots more rules and regulations

fifty years of optimization of wealth extraction

industries shifted focus to servicing deeper into the tail of the population aptitude/ attempt

the missing fund is ending up in the pockets of the super-wealthy upper-class