何毓琦的个人博客分享 http://blog.sciencenet.cn/u/何毓琦 哈佛(1961-2001) 清华(2001-date)

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The simple facts of the economy of scale and its consequence

已有 4127 次阅读 2022-3-27 19:33 |个人分类:生活点滴|系统分类:海外观察

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In my answer to a comment in my previous blog on the nice amenities and service provided in my new retirement community living, I use the simple facts of "THE ECONOMY OF SCALE'" as the reason for middle class people to be able to afford such living. We pool together our resources to hire/provide such amenities by people who perform jobs on a large scale and thus only pay the marginbal cost. Certainly I have to be super rich to enjoy such living if I wish to remain in my individual home. Of course, all of us learn this simple facts of economics in our first high school or university economics courses or through simple osmosis. But few of us stop to think how much our daily lives from birth to death as well as the functioning of modern civilizations are governed by this economic fact of scale. 

  •  Why do we live in crowded cities? 

  • Why do we have public transportation and other social infrasturcuture, such as hospitals, police, and libraries?

  • Why do we need government?

Economists will simply say that I am being naive and feeble minded. Such facts are obvious since the first days that ECONOMICS became a science. But I seriously question how many of us actually think about how much our modern civilization are based on this simple economic fact and what price we pay for these modern conveniences. In my own case, the price I pay is the loss of privacy. I must learn to live in a community and share these amenities/services with others. If solitude and love of wild nature is your primary love, then this is not for you. But in many cases, social interactions and companionship are in fact important for ones old age. You actually welcome such shared living and do not mind at all. We have many old friends and already made new friends here. We feel engaged, alive, and supported. 



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