James Surowiecki, he of the broken jellybean-contest promise, wrote an article a while ago about Baumol’s cost disease. I think I actually read this at a time, but just found a reference to it today.

Generally, productivity growth is a boon, but it creates problems for non-productive enterprises like classical music, education, and car repair: to keep luring talent, they have to increase wages, or else people eventually migrate to businesses that pay better. Instead of becoming nurses or mechanics, they become telecom engineers or machinists.

All very fascinating, but why do I mention it here? Because of the last paragraph:

Some of the most important services that the government providesâ??education, law enforcement, health careâ??are the hardest to make more productive. To keep providing the same quality of services, then, government has to get more expensive. People pay more in taxes and donâ??t get more in return, which makes it look as though the public sector, at least compared with the private sector, is inept and bloated. But it could be that the government is merely stuck in inherently low-productivity-growth businesses

That’s very similar to the point I made recently in my own efficency of government piece: government gets unfairly criticized instead of praised for daring to do the work that nobody in the private sector wants to. It’s nice to see that someone else gets it, and has provided a cogent explanation in a forum more widely read than this one.