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I take issue with the basic assumption of the article. Sustained productivity growth is hard and would not have continued without the software revolution. Let'

I take issue with the basic assumption of the article. Sustained productivity growth is hard and would not have continued without the software revolution. Let's take a look at agriculture. https://www.ers.usda.gov/amber-waves/2018/march/agricultural-productivity-growth-in-the-united-states-1948-2015/ https://www.ers.usda.gov/amber-waves/2018/march/agricultural... Mechanization and the widespread adoption and improvement of mechanized farming has lead to staggering productivity / farmer growth over the last 70 years. But there is only so much you can do with "dumb" machines. Today growth is being driven by computerized information gathering, planning, monitoring, and precision planting / soil maintenance. To maintain a growth curve takes constant innovation. Just because the growth doesn't significantly alter its slope does not mean that there is a missing improvement bump. If you decomposed slopes like these you would see they are compound sigmoids where growth is driven by one technology and then another, or an adoption of a new process, etc. So IMO if "software doesn't show up in productivity" you're not looking hard enough.

jldugger 5y ago
And TFP is a real monster of a formula[1]. It's not just GDP / hours. There's like 20 variables going into it's calculation, including things like 'labor quality' and 'capital's share of income' (alpha). I'm not a smart man, but I think this suggests that a society that lays off factory workers and retrains them as software engineers will not register on this metric. And looking at alpha, there's a pretty clear phase change at 2000 -- it's hovering at 31-33 for 50 years, then marches up from 0.31 to 0.38. Sounds to me like you could tell a story that labor is more productive, but seeing less of the gains than before. edit: just to belabor the point, here's a random chart I googled for US productivity that _doesn't_ feature the same trendline: https://tradingeconomics.com/united-states/productivity https://tradingeconomics.com/united-states/productivity. If anything it looks like productivity has accellerated during the past 20 years. [1]: https://www.frbsf.org/economic-research/indicators-data/total-factor-productivity-tfp/ https://www.frbsf.org/economic-research/indicators-data/tota...

jldugger 5y ago

And TFP is a real monster of a formula[1]. It's not just GDP / hours. There's like 20 variables going into it's calculation, including things like 'labor quality' and 'capital's share of income' (alpha). I'm not a smart man, but I think this suggests that a society that lays off factory workers and retrains them as software engineers will not register on this metric. And looking at alpha, there's a pretty clear phase change at 2000 -- it's hovering at 31-33 for 50 years, then marches up from 0.31 to 0.38. Sounds to me like you could tell a story that labor is more productive, but seeing less of the gains than before. edit: just to belabor the point, here's a random chart I googled for US productivity that _doesn't_ feature the same trendline: https://tradingeconomics.com/united-states/productivity https://tradingeconomics.com/united-states/productivity. If anything it looks like productivity has accellerated during the past 20 years. [1]: https://www.frbsf.org/economic-research/indicators-data/total-factor-productivity-tfp/ https://www.frbsf.org/economic-research/indicators-data/tota...