Why AC is cheap, but AC repair is a luxury

Posted by walterbell 11/4/2025

Why AC is cheap, but AC repair is a luxury(a16z.substack.com)

137 points | 183 commentspage 2

mysterypie 11/4/2025|

> With widespread AI adoption we plausibly could consume 10x or more of the service: Legal services, for example, plausibly fit this bill.

A ten-fold productivity gain in legal services sounds simply awful for society. Imagine the time and money sink if everyone can sue you for every frivolous thing because AI can prepare and file the paperwork instantly without needing a lawyer. You'll need your own AI to defend against the onslaught of legal disputes.

Every contract for jobs and every terms & conditions for services will be 10x longer because AI has a much higher complexity threshold compared to a human. My belief is that one reason tax returns became much more complicated in the last ~30 years is because of tax preparation software. In the era of paper tax returns, there was a limit to the complexity that an individual or even an accountant could handle, so there was a limit on how complicated the government could make it.

Most normal people rarely need a lawyer in their lives. With AI's productivity explosion in the legal services, you're going to need legal services every day. Your neighbor wants to borrow your chainsaw? Your AI legal agent will negotiate a liability waiver with his AI agent.

nitwit005 11/4/2025||

There are a lot of fields where efficiency gains tend to be illusory. No one expects some new innovation in marketing to cause spending to plummet because of the efficiency gains. People have been genuinely innovating in marketing for a long while, and it's never happened. If anything, it seems to inspire more spending.

Havoc 11/4/2025||

Id blame the complexity of tax returns more on lobbying. Everyone wants their own industry custom exemption and that in turn creates holes that need to be patched etc

Gigachad 11/4/2025||

This was pretty interesting. But the part I didn't get is where its stated that things got more expensive, but we consume more of them because we got richer.

Is this not just inflation? If everyone got paid more and everything got more expensive, are we not essentially level?

FloorEgg 11/4/2025|

It seems maybe you mixed up non-fungible value-bottlenecking human services with "everything".

Many things can get cheaper, some things get more expensive, and median person gets more wealthy and buys more of both.

In reality, yes, inflation plays a role in this, but the article is pointing to other patterns layered on top of it.

On average, over long term, despite inflation, people can afford way more good and services.

baxtr 11/4/2025||

> How did this happen? 100 years after Jevons published his observation on coal, William Baumol published a short paper investigating why so many orchestras, theaters, and opera companies were running out of money. He provocatively asserted that the String Quartet had become less productive, in “real economy” terms, because the rest of the economy had become more productive, while the musicians’ job stayed exactly the same. The paper struck a nerve, and became a branded concept: “Baumol’s Cost Disease”.

I find the term “cost disease” very negative. It actually describes positive social progress.

Instead of a “disease,” it’s really a sign of a healthy, advanced economy.

ryao 11/4/2025||

> If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall.

While this is true, the costs are inflated because you need to repaint the entire room to get the original look, rather than only pay the cost of merely replacing the drywall. Of course, some handymen are much more expensive than others, so it is possible that is more expensive too.

If you are one of the few using wallpaper and have extra wallpaper for just such emergencies, using the extra wallpaper to paper over it should be cheap.

nl 11/4/2025||

This is a very interesting piece. I'd never heard of "Baumol’s Cost Disease" but I think the thing it is appliesd to most often here in Australia is coffee.

Everyone complains that it is $7 for a cup of coffee, and yet demand for barrista coffee keeps increasing and demand for barristas keeps increasing.

bob1029 11/4/2025||

It's cheaper to fix the hole, even if you screw up color matching on the paint a few times.

I've seen a lot of people blow a lot of money on really basic stuff like this (myself included). The lack of basic awareness around hvac, landscaping, drainage, drywall, plumbing, electrical, et. al. has me wondering if I'm still in the right business. ChatGPT can't carry a bag of sand up a hill or dig a ditch. It can tell you about these things and make you feel like a hypothetical god over them, but it can never do the actual work on site. I don't feel like there's a lot of competition around being in Texas crawl spaces during the summer.

userbinator 11/4/2025||

Fortunately the massive amount of information available online, continued search-engine-degradation notwithstanding, often means finding out how to do many things yourself is much easier and cheaper than hiring someone else to do it.

lamontcg 11/4/2025||

It seems we have a sort of Cantillon Effect in wages (spilling over from IT down into HVAC and food service), but not in goods.

And I'm not sure the AI/LLM focus sheds any light at all on the situation. Unfortunately, AI/LLMs aren't AGI and they're just a tool. They're just a better machine (assuming it all pans out) that radiologists all need to become experts in using. The way to analyze the situation isn't that the radiologists are the "bottleneck", the radiologists are the experts who are trained to use the tools.

mlsu 11/4/2025||

Lots of people do all kinds of things that are not explicitly written down at their jobs. Those things cannot be tokenized, they cannot be taken in by AI no matter how intelligent and sophisticated it gets. They are judgement calls, made by real people, who think harder and bring more to the table than any machine, no matter how many FLOPS.

But, nonetheless, those jobs will probably disappear, and the machine will reorganize itself to maximize its self-legibility, making tons more money but becoming yet more shitty and inhumane in the process. Discarding the whole reason the jobs exist in the first place (stuff like Value and Service — oh excuse me, sorry, meaningless cost centers to be optimized).

Sort of like how Radiologists do all kinds of important shit, that gets entirely hand waved away in this think-piece as 99% automatable. Yeah, sure guys, the radiologist — actual doctors for fucks sake — I’m sure he is nothing but a warm body between the patient and the computer, signing paperwork and collecting cheques.

qaq 11/4/2025|

A friend works for accounting firm servicing decent number of HVAC shops they are not as profitable as it would appear from outside from crazy markups.

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