The Great K-L Substitution

Arnold Kling:

To me, this, along with factor price equalization, is the most intuitively plausible account for trends in the distribution of income over the past twenty years.

I also think this is an important reason for unemployment. Capital goods are getting less expensive every day, pushing people out of the work force. They are not yet cheap enough for us all to have our own little factories in our garages. Maybe someday…

I do have a few good ideas.

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