Productivity

NOBODY UNDERSTANDS WHAT PRODUCTIVITY is and nobody cares. Yes, sure, you might think you know the macroeconomic definition, that it's a ratio of economic inputs to outputs, but you, in 2025, would be wrong. You have the notion that measures of economic activity actually lend themselves to interpretations about the real world, but like the characters in Spufford's Red Plenty you are trapped, ideologically, in a fairy-tale past where such conceptions did matter, and now, they don't. Sorry.

Ian Verrender pointed out the measurement problems:

Productivity is pretty easy to measure in manufacturing industries. You can quickly count how many cars you produced in a given time and whether you're improving output. It is the same with agriculture. Tonnes of wheat or meat are easy to measure over a given period. Then just divide by the number of workers.

But that's not the case with service industries. Is a teacher more productive with 60 students than with 30?

But that's also a risible question. A better one is; is a teacher in 2025 more productive than a teacher in 1985? Or for that matter in 1805? And who cares? This is economistically-thinking people trapped in an older paradigm where such things actually mattered. My former manager at McDonalds who used to walk about telling people to 'be more productive' (i.e. work harder) was a thoroughly bad man but he was absolutely right. He had inputs, the shifts of a half a dozen young people every night, and he had outputs, which he could raise by shouting at them and getting them to work before and after they'd clocked off. He knew what productivity was. If you say this is just about being shifty and exploitation of workplace power, not productivity per se---nobody cares.

The only thing that everybody seems to agree on when people talk about 'productivity' is that it should be increased; in almost the same way shareholders and investors talk about dividends, which is convenient, of course, because output to input ratios is annoyingly similar to the measure of yield: return for investment. An investor puts money in, and gets a yield at a certain rate. And it's no wonder that so many people see that relationship of money-in money-out, the essential relationship in a world of rents and rentiers, as actual productivity. An investment property, in this paradigm, which returns a yield to its landlord, but which has a very high capital value, is probably far more 'productive' than me, a wage-earning worker. At this point you, an economist, start saying, no, no, that's not what it is at all, but this is what I'm trying to tell you: nobody knows what productivity is. Nobody cares.