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His chart "Nonfarm business sector: Real output per person" shows a notable _slowing_ of the growth rate of per-capita productivity, consistently, over the last

by Yen 9y ago

His chart "Nonfarm business sector: Real output per person" shows a notable _slowing_ of the growth rate of per-capita productivity, consistently, over the last 70 years. I was under the impression that the opposite has occurred - we've achieved mind-boggling amounts of per-person productivity, and rapid rates of growth in productivity, fueled by advances in automation and communication technologies. Is this chart wrong? Is my impression opposite to reality?

FabHK 9y ago
I'd say yes, your impression is wrong, but you're not alone. Productivity growth in the 50s and 60s was consistently higher than it is now. Then it did slow down while IT was taking off, which is known and studied as the productivity paradox [1]: "Academic studies of aggregate U.S. data from the 1970s and 1980s failed to find evidence that IT significantly increased overall productivity." There are many attempts to explain it, including * lag: productivity started to pick up in the 90's (which you can see in Hussman's graph, but it's fallen back now...) * "hedonistic" improvements: IT makes many things better, but they do not show up in GDP measurements Bottom line, though, that arguably earlier technical advances (electricity & machinery, assembly lines & mass production, etc.) had much bigger impact than yet another Tinder for dogs. [1] https://en.wikipedia.org/wiki/Productivity_paradox https://en.wikipedia.org/wiki/Productivity_paradox
rovolo 9y ago
You're referring to the 'Productivity Paradox'[0] as summarized by Robert Solow in 1987: "You can see the computer age everywhere but in the productivity statistics." Summary of possible explanations from the wikipedia article: 1. Computers made the biggest productivity gains early in their life (50s-70s) when they were used by banks and airlines. 2. Industrialization was a far bigger revolution. 3. Computers demand more training and attention than dumb machines which reduces their benefits. [0] https://en.wikipedia.org/wiki/Productivity_paradox https://en.wikipedia.org/wiki/Productivity_paradox

by Yen 9y ago

FabHK 9y ago

I'd say yes, your impression is wrong, but you're not alone. Productivity growth in the 50s and 60s was consistently higher than it is now. Then it did slow down while IT was taking off, which is known and studied as the productivity paradox [1]: "Academic studies of aggregate U.S. data from the 1970s and 1980s failed to find evidence that IT significantly increased overall productivity." There are many attempts to explain it, including * lag: productivity started to pick up in the 90's (which you can see in Hussman's graph, but it's fallen back now...) * "hedonistic" improvements: IT makes many things better, but they do not show up in GDP measurements Bottom line, though, that arguably earlier technical advances (electricity & machinery, assembly lines & mass production, etc.) had much bigger impact than yet another Tinder for dogs. [1] https://en.wikipedia.org/wiki/Productivity_paradox https://en.wikipedia.org/wiki/Productivity_paradox

rovolo 9y ago

You're referring to the 'Productivity Paradox'[0] as summarized by Robert Solow in 1987: "You can see the computer age everywhere but in the productivity statistics." Summary of possible explanations from the wikipedia article: 1. Computers made the biggest productivity gains early in their life (50s-70s) when they were used by banks and airlines. 2. Industrialization was a far bigger revolution. 3. Computers demand more training and attention than dumb machines which reduces their benefits. [0] https://en.wikipedia.org/wiki/Productivity_paradox https://en.wikipedia.org/wiki/Productivity_paradox