3 ms·
Hang on. Correct me if I'm being terribly obtuse here, but it looks like making an end goal process with a saturated market more efficient would count as a prod
by arjie 11y ago
Hang on. Correct me if I'm being terribly obtuse here, but it looks like making an end goal process with a saturated market more efficient would count as a productivity loss?
So say everyone needs to pay taxes. Let's say that everyone complies and pays a company $100 for software to do this. Now I make equivalent software which I'm able to sell for $50 (because I'm better at running my company, say). Now people are spending exactly half as much money, but the same job is being done. This looks like an economic productivity loss? If so, surely there are alternative models that capture the intuitive gain from things like this? Or maybe such gains are rare and negligible?
- YokoZar 11y agoWhat happens in this situation is the people who used to make the obsolete things are now out of a job, and eventually get employment somewhere else. What they do then counts for productivity. If they earn what they did before, you'd measure no change in productivity -- though we'd all be better off. The studies in the article assert that the size of the productivity shortfall is so large that even if we place pretty generous values on all this free stuff we have now it doesn't fully cover the gap.