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ON THE NEW MILITARY PERIL : TOWARD THEORY AND POLICY

ON THE NEW MILITARY PERIL : TOWARD THEORY AND POLICY. OR THE COST DISEASE: DROPPING THE OTHER SHOE. In any group whose performance is heterogeneous, the performance of some of the members must be below average Baumol’s fourth tautology. The cost-disease other side: the falling real prices.

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ON THE NEW MILITARY PERIL : TOWARD THEORY AND POLICY

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  1. ON THE NEW MILITARY PERIL: TOWARD THEORY AND POLICY • OR THE COST DISEASE: DROPPING THE OTHER SHOE

  2. In any group whose performance is heterogeneous, • the performance of some of the members must be below average • Baumol’s fourth tautology

  3. The cost-disease other side:the falling real prices • In 1919, the average U.S. worker had to labor nearly an hour to buy a pound of chicken. At today’s wages and poultry prices, less than five minutes of labor is required • Color TV labor-time cost down 98 % 1954-97 • VCR cost down 96% 1972-97 • Microwave oven down 99% 1947-1997 • Now Computer cost per MIPS down to 27 minutes of labor • From 733,000 lifetimes of labor in 1944!!!

  4. War..As it Used to be • “Pecunia Nervus Belli” (Money is the sinew of war) “...the favorite Latin tag of the [mid-16th century ].” • “There were, Louis XII [king of France,1498 - 1515] was told by one of his counselors, three things a king required in order to .fight wars: First, money; second, money; and third, money.”Jones, 1994, p.130.

  5. War—as it is Evolving • “The AK-47 has become the world's most prolific and effective combat weapon, a device so cheap and simple that it can be bought in many countries for less than the cost of a live chicken.” • Larry Kahaner, "Weapon of Mass Destruction," Washington Post, November 26, 2006, available at http://www.washingtonpost.com/.

  6. Web address for more computer paintings • http://www.stern.nyu.edu/-wbaumol

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