Derek Thompson

speaker

564 appearances 2 recordings 1 series first heard Jul 2026 last heard 24 Jul

Derek Thompson’s voice in public audio — every appearance, attributed to the second.

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Recordings per month over the last 12 months — 2 in all, peaking in Jul 2026 with 2.

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The Prof G Pod with Scott Galloway · Inside the Anti-Social Century — with Derek Thompson · 23 Jul 2026 podcast

There's this wonderful idea in economics that's called Baumol's cost disease.

Maybe you've talked a little bit about it, but it's this idea from a late economist, William Baumol, who said that ironically, in an economy where some parts of the economy are getting more productive—

other parts of the economy are going to get more expensive.

So for example, if you have a growing economy where everyone's getting richer in like an early industrial revolution, but a four-string quartet is still a four-string quartet, still a four-string quartet, which is not being made more labor productive by any kind of technology, then going to see a symphony or going to see an opera is going to get much more expensive than anything else.

So the cost disease essentially says that as technology changes an economy,

parts of that economy that are more labor intensive are going to increase in cost relative to the rest of the economy.

To put that in simpler terms, as our phones and digital entertainment has gotten dirt cheap, the physical world has gotten relatively expensive.

It is cheap to stay at home on your couch and watch Netflix, and cheaper still to forget Netflix, not even pay for a subscription, and instead just scroll through TikTok.

That is a zero additional cost experience.

Going to a rooftop deck in Beverly Hills to order, let's say, three drinks between you and a friend, that could cost you $100 even before you talk about maybe Ubering out there and Ubering back.

And so it's absolutely true.

I love that you foregrounded this.

It's absolutely true that one barrier here is that the physical world is getting more expensive relative to the digital world because the digital world has been inflected by technology that the physical world has not, right?

There is no computer chip revolution for mixing the perfect martini.

The martini is still the martini and it's shaken by human hands.

So I think that a big problem here is that people aren't getting out of the room because they feel almost pulled into the comfort, the relatively cheap comfort that the room provides.

I think another part of this, to sort of pull in some ideas from my other work from last year, Abundance, is that if the first half of the 20th century was about technology mastering the physical world, the first half of the 21st century has been about escaping the physical world because it is so regulated.

We've made it much harder to build things.

We've made it harder to build houses, and so young people can't afford them, and then therefore they can't start families, and maybe there's a decline in socialization because of that.

If it's harder to build things in the physical world, then the physical world will mechanically become more expensive.

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