There is, of course, William Baumol’s “cost disease” thesis, which is that productivity tends to stagnate in the service sector in general and in the government sector in particular.
That is from Arnold Kling.
Consider this, from The New York Times.
Dr. Baumol, director of the C.V. Starr Center for Applied Economics at New York University, likes to explain the disease by using Mozart as an example. In the centuries since the composer’s death in 1791, playing one of his quartets for string still requires four instruments and four players and the same number of minutes. No way has ever been found to make this process more efficient, even though huge gains in industrial productivity have occurred during the same time.
Now here is from the 7 November Wall Street Journal, lead article:
For more than 200 years, “The Marriage of Figaro” has been performed with a full orchestra. But when the Opera Company of Brookly stages the Mozart opera in January, the pit will be occupied by only 12 musicians – and one technician overseeing a computer program that plays all the other parts….
…Once confined to the computer sector and a few technologically savvy companies, productivity gains have spread into the nation’s vast service sector, from airports to pet stores and package deliveries.
The title of the article is “Behind Surging Productivity: The Service Sector Delivers.” Need I say more?