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What about "GDP is detached from the production of hard physical goods and services that satisfy human needs."??? I won't go as far as to claim that Economy is
by crpatino 11y ago
What about "GDP is detached from the production of hard physical goods and services that satisfy human needs."???
I won't go as far as to claim that Economy is a pseudo science, but like many other disciplines it uses words that are already in use by the general population and redefines them to mean technical concepts. The end result is that economist can make statements that are technically true but that end up conveying a completely different message when listened by a lay person.
In this case, when an economist talks about "productivity", it has a very specific concept in mind. One that has more to do with ROI than with the manufacturing of any thing of value at all. Of course, both concepts are not completely detached from each other (it would be useless to grab a concept to mean something random instead), but they are not 100% aligned either, and this results in misunderstanding, if not actual misleading. By example, when some troubled company talks about "increasing employee productivity", naive employees expect some sort of training program to help them be more effective at their jobs. What they get is a pink slip instead; if productivity is ROI, you can lay off half of your people and use the company's momentum to keep turning 80% of the income, so on paper it will look like you are having better ROI (even if the cuts get too deep and are damaging the long term viability of the business).