[lbo-talk] productivity

Wojtek Sokolowski sokol at jhu.edu
Mon Sep 8 07:50:51 PDT 2003


Brad:
>
> I'm surprised it hasn't fallen more. The incredible cheapness of IT
> capital goods means it becomes profitable to use them in less and
> less productive and valuable uses. My new furnace has a surge
> suppressor on it to protect its cpu, for god's sake. Twenty years ago
> I would not have believed that a furnace would ever have a cpu...
>

But does the cpu make a furnace more efficient? An electronic board on my furnace broke after 3 or so years of operation, shutting down the whole system. Worse yet, a replacement was priced at $300 for the part itself (which should not cost more than, say, a modem i.e ca. $30) plus $150 for labor. Only after I raised stink, the manufacturer agreed to supply the part under a warranty agreement, I still had to pay the labor cost.

The electronic board had been installed in lieu an old fashioned $20 thermostat. The utility of the old-fashioned thermostat furnace is no different than the utility of the new electronic-board equipped one . So what exactly has been gained by adding a $300 electronic board? Efficiency? Or the improved ability to feed the economy and boost the GDP by increasing transaction costs?

Wojtek



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