Steve, it's all relative, there's really no 'right' answer as
1) No two basses adjust exactly the same, and . . .
2) No two bassists play the same way.
Action adjustment is player-dependent once you dial in that last 10-20% past the generic 'factory' setup where you get it exactly the way YOU want it. It's very subjective.
On the face of it, 1/8 clearance suggests a high action, relatively speaking. The question is how did it get there?
- A lot of relief ('bow') in the neck?
- Or is the bridge cranked way off the body?
- Is the adjustable nut very high?
- Or some combination of all three?
. . . . because action comes from a subtle blend of relief and heights, and all of this is string-gauge related as well. Relatively high-tension sets are obviously going to introduce more relief to a neck than a lower tension set, and it may or may not be related to the gauges involved, to make this all even more confusing !
But above all: IF it feels fine to you at that height, then that's the right height for you, and that's all that matters.
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Speaking only for myself (as we're all different in what feels right):
I shoot for a dead-straight neck, then re-introduce as little relief as I can to eliminate any buzzes or rattles that can be heard thru the pickups. If it rattles a little unplugged but not plugged in, that's as good as it's going to get, and at that point I'm done: I've got all I'm going to get.
I essentially shoot for the same clearance over the first fret as the last fret, and thinking of the strings as a flat piece five strings wide, instead of being parallel to the fingerboard, the bass side will be just a hair higher than the treble side to account for the bigger arcs in which the B and E vibrate as opposed to the G and D.
This setup is me, and it took a very long time to realize it, much less teach myself to do it. It could easily be useless for a lot of people, some people would take to it like a duck to water.
But it suits me, and my hands know if it changes, which is rarely on an Alembic.
But the most important thing is to find what fits YOU, that's the only 'right' answer.
Joey