2025-12-07 08:07:35

Can someone break down Baumol's Law for me? Keep seeing it referenced but want to understand what it actually means in practice.

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ForkThisDAO

· 17h ago

Well, Baumol's Law basically states that the cost of services will inevitably rise, and it's not really related to production efficiency. It may sound abstract, but it does indeed affect the cost of building crypto infrastructure.

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ImpermanentPhilosopher

· 12-07 08:33

Yeah, really, Baumol's law basically says that for certain service industries, no matter how much you optimize, you just can't lower the costs because labor costs are always there... I get why you're confused, it sounds sophisticated but that's really all there is to it.

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CodeAuditQueen

· 12-07 08:31

The so-called "cost disease" is just an excuse for inflation, a sleight of hand by economists. The real problem lies in inefficiency and improper allocation of resources.

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MemeKingNFT

· 12-07 08:30

Simply put, it's the skyrocketing cost of the service industry, right? Productivity can't keep up... Isn't this just a microcosm of our Web3 ecosystem? Gas fees are always soaring, and development costs have never gone down.

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TokenSleuth

· 12-07 08:19

Well, Baumol's Law states that the cost of services will continue to rise because labor costs can't be reduced... This also provides some insight into on-chain gas fees, doesn't it?

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NotAFinancialAdvice

· 12-07 08:16

To put it simply, the costs in labor-intensive industries will skyrocket along with inflation... The service sector has it the worst; there's basically no way to improve efficiency.

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MEVHunterLucky

· 12-07 08:14

Huh? Baumol's law? Honestly, I've never heard of it, but it sounds like something some economist just made up. Can this thing really be applied to crypto?

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