Why Is Productivity Dead in the Water?
The only possible output of this system is extortion as a way of life.
As the accompanying chart shows, productivity in the U.S. has been declining since the early 2000s. This trend mystifies economists, as the tremendous investments in software, robotics, networks and mobile computing would be expected to boost productivity, as these tools enable every individual who knows how to use them to produce more value.
One theory holds that the workforce has not yet learned how to use these tools, an idea that arose in the 1980s to explain the decline in productivity even as personal computers, desktop publishing, etc. entered the mainstream.
A related explanation holds that institutions and corporations are not deploying the new technologies very effectively for a variety of reasons: the cost of integrating legacy systems, insufficient training of their workforce, and hasty, ill-planned investments in mobile platforms that don’t actually yield higher productivity.
Productivity matters because producing more value with every unit of energy, every tool and every hour of labor is the foundation of higher wages, profits, taxes and general prosperity.
I have four theories about the secular decline in productivity, and all are difficult to model and back up with data, as they are inherently ambiguous and hard to quantify.
1. Mobile telephony and social media distract workers so significantly and ubiquitously that the work being produced has declined per worker/per hour of paid labor.
2. Public and private institutions have become grossly inefficient and ineffective, soaking up any gains in productivity via their wasteful processes and institutionalized incompetence.
3. Our institutions have substituted signaling and compliance for productivity.
4. The financial elites at the top of our neofeudal economy have optimized protecting their skims and scams above all else; their focus is rigging the system in their favor and so productivity is of no concern to them.
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