Prior to 1968, membership in the Cleveland Orchestra was a part-time job. When he joined the orchestra, the regular season was just 30 weeks long, with lower pay for summer concerts. In 1952, the base salary was $3,240—$29,231 in today’s dollars. By 1967, it had only gone up to $11,700. (The current base salary is $120,000.) The U.S. median household income in 1967, by contrast, was $7,970. According to a 1952 survey, 60% of the players moonlighted in nonmusical jobs, and many of them did so until 1968, when Cleveland, in keeping with other top-tier American orchestras, finally lengthened its season to 52 weeks.
Here is Terry Teachout on today’s orchestral strikes. How much are the striking musicians paid, and are they as good as the former Cleveland players?:
Suffice it to say that the annual base salary is $107,000 in Pittsburgh and $128,000 in Philadelphia. (At the New York Philharmonic, it’s $146,848.) In Fort Worth, the average salary is $61,000. The music directors of those orchestras may make 10 to 20 times what players do, and managerial salaries are also higher. Allison Vulgamore, president and CEO of the Philadelphia Orchestra, is said to be paid roughly $725,000 a year.
Something fundamental has changed about social expectations, yes?
Even though William Baumol didn’t win the Nobel prize this year it got me to thinking about the cost disease, as did the death last week of William Bowen, the co-author of Performing Arts – The Economic Dilemma which brought the cost disease to public attention. The cost disease says that if two sectors have unequal levels of productivity growth then the sector with lower growth will increase in relative price. If in 1900, for example, it took 1 day of labor to produce one A good and 1 day of labor to produce one B good then the goods will trade 1:1. Now suppose that by 2000 1 unit of labor can produce 10 units of A but still only one unit of B. Now the goods trade 10:1. In other words, in 1900 the price or opportunity cost of one B was one A but in 2000 to get one B you must give up 10 A. B goods have become much more expensive.
The cost disease says only that the relative price of the low productivity good increases, it doesn’t say that the low productivity good becomes absolutely more expensive. The economy in 2000 is much wealthier than in 1900 so relative to income B has become cheaper. Anyone who could consume x units of B in 1900 can still consume x units of B in 2000, the only difference is that in 2000 they will be giving up more A than in 1900 so the tradeoff has become steeper even though still affordable.
Stated generically the cost disease is indisputable. But it becomes more contentious when we try to identify the A and B good. Baumol and Baumol and Bowen initially pointed to labor intensive goods, the service sector, as the low-productivity B sector. The performing arts were the key example–it took four quartet players 40 minutes to perform a Mozart composition in 1900 (or 1800) and it took four quartet players 40 minutes to perform a Mozart composition in 2000, hence no productivity improvements in Mozart performances, hence a rising cost over time since those four players could produce many more goods in say the manufacturing sector in 2000 than 1900. Health care and education are other stock examples.
Tyler offers one response to the cost disease namely that it’s true if you define the good narrowly (listening to a live performance of a 40 minute Mozart composition) but why should we define the good narrowly? If instead we define the good as “listen to music for 40 minutes” then it’s clear that costs have fallen dramatically. Not only has the cost of listening fallen, variety has increased. Costs have fallen even further since Tyler wrote. In a similar way, Tyler and I have argued that online education greater lowers costs and increases quality.
Here, however, I offer a different and more fundamental response. Baumol pointed to labor and the service sector as the low productivity, low growth, sector. But robots and artificial intelligence mean that there is no longer a pure “labor” sector. Robots are labor made of capital. Whether we are talking about robot vacuum cleaners, AI answering machines or Dr. Watson there is much more capital in the service sector than ever before. K has become L. And when K becomes L, the productivity of L increases with the productivity of K. If manufacturing productivity improves and we are manufacturing robots then any sector that uses robots increases in productivity. If software productivity improves–if AI becomes more intelligent, for example–then any sector that uses AI increases in productivity. Any service that uses information technology inherits all the productivity growth of information technology.
At any moment there will always be some sectors that are increasing in productivity at a faster rate than other sectors–that is the nature of progress, uneven and episodic–but the time when one could distinguish a manufacturing sector and a service sector and argue that as a general rule the latter increases in productivity at a slower rate than the former is rapidly coming to a close. K has become L.
Addendum: Timothy Lee also has a piece today on the cost-disease.
I had heard the rumors for years, but I didn’t think it actually would happen. My takes on a few Dylan albums:
FreeWheelin’ Bob Dylan: One of his most listenable and underrated albums, the same is true for Another Side of Bob Dylan.
Bringing It All Back Home: The album I fell in love with as a kid. Some of it is overwrought but mostly still amazing, perhaps his highest peaks.
Highway 61 Revisited: Half of it is wonderful, but it contains excess and some so-so judgment.
Blonde on Blonde: Many see this as Dylan’s peak, but I don’t listen to it much. Somehow the sound is a little harsh for my taste.
The Basement Tapes: The most overrated, too much murky slush and slosh.
Bob Dylan’s Greatest Hits, vol.II: The perfect medley.
Blood on the Tracks: Maybe the most consistent and listenable album, though it’s not pathbreaking in the way that the mid-sixties work was.
Time Out of Mind: An amazing “late career” work.
Dylan’s memoir is excellent, and his most underrated contribution outside of creating music is the CDs he edited for satellite radio, many hours of Dylan selecting and playing classics from early American musical history, blues, country, mixed styles, perhaps the single best look at the early evolution of American popular music. Many hours of listening pleasure. Bob Dylan Radio Hour. And the Martin Scorsese four-hour bio-documentary on Dylan is one of the better movies ever made, No Direction Home it is called.
If I recall correctly, three of the Conversations with Tyler turned to the topic of Bob Dylan. Camille Paglia loves the song “Desolation Row,” Cass Sunstein is a big fan, especially of some of the early period work, and Ezra Klein feels he is overrated, I guess that means especially overrated now.
Congratulations to Bob Dylan, polymath!
The very beginning is a little slow, but I thought Ezra was one of the very best guests. The topics include the nature and future of media, including virtual reality, the nature of leadership (including Ezra’s own), how running a project shapes your political views, a wee bit on health care, what he thinks are the Obama and Clinton models of the world, Robert Putnam’s research on the costs of diversity, the proper role of shame in society, animal welfare, and of course Ezra’s underrated and overrated, with takes on Bob Dylan, The Matrix, William F. Buckley, Joe Biden, and more. There is no video but here is the podcast and transcript. Here is one excerpt:
COWEN: …Now Putman, let me ask you about Putnam, and how Putnam relates to Donald Trump. As you know, Robert Putnam at Harvard, he has some work showing that when ethnic diversity goes up that there’s less trust, less cooperation, less social capital.
If you think of yourself in the role of an editor, so you have an American society, diversity has gone up, and a lot of people have reacted to this I would say rather badly — and I think you would agree with me they’ve reacted rather badly — but there’s still a way in which the issue could be framed that while diversity is actually a problem, we can’t handle diversity.
Putnam almost says as such, and do you think there’s currently a language in the media where you have readers who are themselves diverse, where it’s possible not to just be blaming the bigots, but to actually present the positive view, “Look, people are imperfect. A society can only handle so much diversity, and we need to learn this.” What’s your take on that?
KLEIN: I strongly agree. We do not have a language for demographic anxiety that is not a language that is about racism. And we need one. I really believe this, and I believe it’s been a problem, particularly this year. It is clear, the evidence is clear. Donald Trump is not about “economic anxiety.”
COWEN: A bit, but not mainly, I agree.
KLEIN: That said, I think that the way it’s presented is a choice between economic anxiety and racism. And one I don’t think that’s quite right, and two I don’t think that’s a productive way of having that conversation.
COWEN: Why don’t we have that language? Where did it go, or did we ever have it?
COWEN: You see this with Medicaid. A lot of people don’t sign up. They don’t have addresses. You can’t even get them, whatever.
KLEIN: They don’t like doctors. They’re afraid of doctors.
COWEN: This is me.
KLEIN: You’re afraid of doctors?
COWEN: “Afraid” isn’t the word.
KLEIN: Averse. [laughs]
COWEN: Maybe dislike. Averse. [laughs] They should be afraid of me, perhaps.
Definitely recommended. The same dialogue, with a different introduction, is included in The Ezra Klein Show podcast.
Reductions in entry costs allow producers to “take more draws,” and given the unpredictability of quality at the time of investment, taking more draws can generate more “winners.” Our illustrative estimates for music show that the production mechanism could generate almost 20 times as much benefit as the consumption mechanism for an equal-sized increase in the number of products.
That is from a new working paper by Luis Aguiar and Joel Waldfogel, @pmarca oh we miss ye I bet you would have retweeted this.
Sean Illing in particular, here is one excerpt:
Underrated. Nate Silver is famous, and he writes on topics where everyone has their own view. When you do that, people think you’re always wrong, and when you are actually, as he was on Trump, people don’t give you a break for it. So he has designed his life to be the kind of person who is condemned by others, so that means he almost has to be underrated.
Right now he’s probably underrated, but for almost all of history he’s been overrated. He makes very basic errors in economics. People put Marxism into practice and everywhere it has failed, and it failed in very dramatic, sometimes violent ways. But that said, he’s a brilliant and deep thinker. He understood the 19th century in capitalism better than almost anyone.
Underrated. I think Kanye is the musical mind of our time. Every one of his albums is different, original, takes chances. My favorite is the 808 album and then Yeezus.
Do read the whole thing.
Bach heard the St. Matthew Passion four times at most.
That is George Chien, from the September/October issue of Fanfare.
No, that is not enlightenment about life, that is enlightenment about Enlightenment, as in the eighteenth century phenomenon. P., a loyal MR reader, wrote to me with such a request, noting correctly that “I usually find that broad, ambitious survey books are not the answer.”
That survey would be Peter Gay, recently a bestseller in China by the way, and then Ernst Cassirer, Jonathan Israel, and Roy Porter, but let me outline an alternative program of study. The goal here is to be practical, engaging, and vivid, not comprehensive or scholarly per se:
Geoffrey Clive’s short book The Romantic Enlightenment.
James Boswell, Journals, selected excerpts, he was an early blogger by the way, and David Hume, An Enquiry Concerning Human Understanding. I find that to be one of the wittiest of books. Plus Hume’s Essays.
Diderot, Rameau’s Nephew, and Rousseau’s Second Discourse. Condorcet, Essay on the Progress of the Human Mind. Voltaire I consider overrated.
Swift, Gulliver’s Travels, yes I know it is arguably “anti-Enlightenment,” better yet. If you insist on another Irishman, Bishop Berkeley is an entertaining writer as well.
Founding documents of the United States, and Ben Franklin, Autobiography.
Kant, Perpetual Peace, “What is Enlightenment?”, and Lessing, Nathan the Wise.
Beccaria, Of Crimes and Punishments.
If you have the time to tackle longer books, start with Smith’s Wealth of Nations and Boswell’s Life of Johnson and then Casanova and Tristram Shandy (there is by the way a splendid book on the postmodern in the Enlightenment but I can no longer remember the cite). Leave Montesquieu to the Straussians, although the returns are high if you are so inclined.
For history, read up on eighteenth century scientific societies, Robert Darnton on the rise of publishing and the book trade, Habermas on the coffeehouse debate culture and the public sphere, and Brewer and McKendrick on the rise of consumer society in England. Try Wikipedia for Catherine the Great, Frederick the Great, and other rulers of the time. There is also Margaret C. Jacob, The Radical Enlightenment, and books on 18th century Freemasonry. The French Revolution seems to require its own blog post, as does the Industrial Revolution, slavery too, in a pinch resort to the MR search function box on this blog. Foucault will give you a sense of the dark side of the Enlightenment, his history is unreliable but read him on Discipline and Punishment and on ideology try the rather dense The Order of Things.
That all said, I would start with music and the arts first.
Haydn, the London symphonies and late piano sonatas and string quartets Op.76.
Mozart, the major operas, including reading through the libretti while listening. If you can only do one thing on this list…
Gluck, assorted operas, noting he is not nearly the equal of Haydn or Mozart as a composer but he did capture the spirit of Enlightenment.
C.P.E. Bach, the Prussian Sonatas.
Study French painting from Chardin through David, picture books will do if you can’t visit the original works. Focus on Watteau, Boucher, Fragonard, Vigée-Le Brun, Boilly, Hubert Robert, and others, how their works tie into the history of the period and how the styles transformed over time. Visit Paris, Huntington Gardens, and Tiepolo’s work in the Residenz in Würzburg. Do a tour of Georgian architecture in England, in a pinch visit the derivative works at Harvard, Yale, and Alexandria, Virginia. Study Tiepolo more generally, Goya, and also Antonio Canova.
Why not? I’ll toss up Dangerous Liaisons (Vadim and Malkovich versions), Barry Lyndon, Casanova, Amadeus, A Royal Affair (can’t forget Denmark!), Marie Antoinette, Ridicule, and The Madness of King George.
What did I leave out that is of utmost importance?
1. Many of the best songs were from his solo or Wings period, especially those designed to be played live, and designed to work without the backing voices of the other Beatles.
2. The first two-thirds of the concert pulled out an impressive number of obscure songs, most of which worked, including a bluesy “Letting Go” (can anyone other than Kelly Jane Torrance place that one without using Google?). Paul flat out told the crowd he doesn’t care if they like these other songs less.
3. Often the best Beatle song vocals were Paul doing either John or George parts, because you didn’t know exactly what to expect and thus you were let down less by his 74-year-old vocal cords.
4. His stamina was remarkable. The show was almost three hours long, with little in the way of breaks for him, and he is playing two nights in a row.
5. At the time of its release, “Hi Hi Hi” seemed like a commercial piece of crud, but it has become iconic and satellite radio treats it with respect as well.
6. Paul has been with his current touring band for fifteen years, far longer than he ever was with either Wings or the Beatles.
7. There is a fellow who collects “album covers that are parodies of Beatle album covers,” and he has over 2,000 of them. How is that for markets in everything?
The paper title is “Strip Clubs, ‘Secondary Effects’, and Residential Property Prices,” and the authors are Taggart J. Brooks, brad R. Humphries, and Adam Nowak, here is the abstract maybe strip clubs are more popular than I thought:
The ‘secondary effects’ legal doctrine allows municipalities to zone, or otherwise regulate, sexually oriented businesses. Negative ‘secondary effects’ (economic externalities) justify limiting First Amendment protection of speech conducted inside strip clubs. One example of a secondary effect, cited in no fewer than four United States Supreme Court rulings, is the negative effect of strip clubs on the quality of the surrounding neighborhood. Little empirical evidence that strip clubs do, in fact, have a negative effect on the surrounding neighborhood exists. To the extent that changes in neighborhood quality are reflected by changes in property prices, property prices should decrease when a strip club opens up nearby. We estimate an augmented repeat sales regression model of housing prices to estimate the effect of strip clubs on nearby residential property prices. Using real estate transactions from King County, Washington, we test the hypothesis that strip clubs have a negative effect on surrounding residential property prices. We exploit the unique and unexpected termination of a 17 year moratorium on new strip club openings in order to generate exogenous variation in the operation of strip clubs. We find no statistical evidence that strip clubs have ‘secondary effects’ on nearby residential property prices.
Is this evidence for or against “the death of distance”?
For the pointer I thank the excellent Kevin Lewis.
Chinese Taylor Swift fans hoping to hedge their heartbreak by insuring against the downturns in the pop star’s love life are now out of luck.
Taobao, China’s largest online marketplace, has cracked down on vendors who were offering “insurance policies” on Swift’s reported relationship with British actor Tom Hiddleston.
The Hiddleswift plan offered double your money if the couple split up. According to China’s state-run Xinhua News Agency, Taobao vendors had begun taking bets on the pop star’s romantic fortunes last week, with the minimum wager set at 1 yuan (15 cents).
There is audio, video, and transcript at the link. I introduced Cass like this:
The Force is strong with this one. Cass is by far the most widely cited legal scholar of his generation. His older book, Nudge, and his new book on Star Wars are both best sellers, and he was head of OIRA [Office of Information and Regulatory Affairs] under President Obama from 2009 to 2013. Powerful, you have become.
So tonight I’d like to start with a survey of Cass’s thought. We’re going to look at legal theory and then go to Nudge and then consider Star Wars, how it all ties together, and then we’re going to talk about everything.
On every point Cass responded clearly and without evasion. We talked about judicial minimalism, Bob Dylan’s best album, the metaphysics of nudging, Possession, the ideal size of the Supreme Court, the wisdom of Yoda, Hayek, why people should choose their own path, the merits of a banned products store, James Joyce, why the prequels are underrated, and which of the first six movies is the worst of the lot. Here is one bit:
COWEN: Let’s take a concrete example from real life: Jedi mind tricks. Obi-Wan comes along and says, “These aren’t the droids you’re looking for.” And what does the stormtroooper do? He goes away. Now, is that a nudge?
SUNSTEIN: No, it’s a form of manipulation. So — .
COWEN: OK, but how do you draw the metaphysical categories? It seems like a nudge that just happens to work all the time.
SUNSTEIN: OK. I’ll give you a quick and dirty way of getting at that…
Here is another:
COWEN: If you were to pick one character from Star Wars who would nudge you — you get to elect them; you’re the only vote. Even Samantha doesn’t get a vote, just Cass — not your children — which character would you pick? Whom would you trust with that nudge? It’s a universe full of Jedi here, right?
SUNSTEIN: I trust that guy.
COWEN: But I worry about Yoda.
SUNSTEIN: I trust him.
SUNSTEIN: Thank God for libertarian paternalism, that Luke has a choice. The Sith, by the way, like the Jedi, respect freedom of choice. In the crucial scene in Episode III where the question is whether Anakin is going to save the person who would be emperor, he says, “You must choose.” And so there’s full respect for freedom of choice. Nudgers have that. Good for them.
COWEN: Bad guys always tell you the deal, and then they say, “Choose evil.” It seems the good guys always mislead you.
There’s this funny tension. Star Wars makes me more nervous about nudge. I’m not like this huge anti-nudge guy, but when I look at Obi-Wan and Yoda lying to Luke — “Ben, Ben, Ben, why didn’t you tell me?” How many times have I heard that in these movies?
…SUNSTEIN: It’s fair to ask whether Obi-Wan and Yoda had it right.
There is much, more more…self-recommending!
Poking big holes in long-held assertions, Goldberg and his colleagues at Stanford and Yale universities analyzed millions of Yelp and Netflix reviews to reveal that people considered the most culturally adventurous are actually the most resistant to experiences perceived as “crossing the line.”
That is, those dubbed “cultural omnivores” — because they eat Thai for lunch, play bocce ball after work, and stream a French film that night — are the very ones opposed to mixing it up. No hummus on their hot dogs, forget about spaghetti Westerns, and do not mention Switched-On Bach. Those offerings are not considered culturally authentic. They are a hodgepodge to which these folks would likely wrinkle their collective noses — as they did in 1968 when Wendy (nee’ Walter) Carlos electrified J.S. Bach. Today’s cultural elites approve only if the experience is authentic, which means eating pigs’ feet at a Texas barbecue passes the test and slathering a taco with tahini does not.
“We find these people hate the most atypical offerings,” says Goldberg, an assistant professor of organizational behavior at Stanford Graduate School of Business. “They can pretend to be the most open, but it turns out they are not. By being multicultural, they are the most conservative and the most resistant to changes to the status quo.”
Or should we just call it good taste?
Looking for something to do this weekend in New York? Story, a concept shop that completely changes theme every few months, has relaunched this week as a Mr. Robot-themed space. In addition to being a retail shop selling an assortment of gadgets, accessories, and Mr. Robot-themed wares, there’s an “Evil Corp” ATM at the front of the store that will dispense real money (up to $50) if you figure out the four-digit code. The clues are hidden around the store, and we’re told they’ll probably change often.
Here is the full story, with many photos and an address. To think that they closed Tower Records and Borders for this…sigh.