Baumol's Curse

William Baumol, a noted cultural economist, described the "cost disease" of the service industries -- specifically including education and musical performance -- in 1966. He noted that although the cost of services fell over time, it fell at a much lower rate than the cost of manufactured goods. He attributed the difference to the rates of increase in labor productivity. Technological advancements steadily reduced the labor cost of manufactured goods (through automation), but the amount of labor required to teach a student to play the violin or to perform a violin concerto remained the same year after year, steadily increasing the relative cost of music education and live performance. This relentless increase in the service industries' relative labor costs has become known as "Baumol's Curse." (Baumol wrote a related article, "Children of Performing Arts, The Economic Dilemma," in 1996, of which excerpts can be found here.)

Note that the fundamental cause of the differential is labor productivity. Therefore, if you want to reduce the relative cost of music education, you need to reduce the number of hours necessary to attain a given level of competence -- including both the hours invested by the teacher (per student) and the hours invested by the student.

The ThumMusic System has the potential to increase the productivity of labor in music education, thereby lifting Baumol's Curse -- or at least, ameliorating its effects for a while.

Increasing labor productivity is the source of rising living standards, because part of the profits from an increase in labor efficiency can be captured by the laborer through increased wages. If music educators want to make more money, they need to find ways to increase their productivity -- through means such as the ThumMusic System.

Furthermore, those who are among the first to adopt a productivity-enhancing technology can gain a short-term competitive advantage vs. their more laggardly peers, although this advantage will tend to fade once use of the new technology spreads.

The bottom line: Thumtronics' productivity-enhancing innovations should raise living standards for their early adopters in the short term, and for everyone over the long term.

We're making the world a better place...one note at a time. ;-)