Baumol’s cost disease

Explanation

A string quartet still needs four musicians and roughly the same performance time as it did centuries ago. Yet musicians’ pay must rise as wages rise in more productive sectors, so live performance becomes more expensive without producing more minutes of music.

AI could widen similar differences: automated outputs may get cheaper while care, education, therapy, hospitality, and other human-intensive services become relatively costly. That does not necessarily mean those services are inefficient; a richer society may simply spend more on them.