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One disconnect for me is the divergence of worker productivity metrics and very low GDP. How is it that workers can be twice as productive as say 2 decades ago

One disconnect for me is the divergence of worker productivity metrics and very low GDP. How is it that workers can be twice as productive as say 2 decades ago but last decade's GDP growth is only +1.7%? People are doing more, but getting less. It doesn't really matter which government presides over the phenomena. Of course government can influence the outcome, but it's like holding the president accountable for gas prices: effective as screaming at clouds. The low growth is a problem, but the public figurehead doesn't control each economic agent's decisions; they can only maybe steer the trajectory. Growth wasn't >7% YoY 8 decades ago because we had more tenacious leaders. The secret sauce for high growth is likely more complicated than that.

tmnvix 4y ago
Maybe a corresponding growth in credit has allowed the financial sector to capture the increased productivity? A lot of loans are given for non-GDP transactions (i.e. purchases of existing assets as opposed to actual business and infrastructure investment).
lkrubner 4y ago
On the political aspect, you are almost quoting Achen & Bartels, see here in particular: https://demodexio.substack.com/p/democracy-for-realists-part-15-of?s=w https://demodexio.substack.com/p/democracy-for-realists-part... They make the point that the public often screams at whoever the leader is, regardless of whether the leader has any power over economic events, and regardless of whether the leader is conservative or socialist. There is also this: Democracy for Realists, 2016 Why Elections Do Not Produce Responsive Government By Christopher H. Achen & Larry M. Bartels Page 312 The result is that, from the viewpoint of governmental representativeness and accountability, election outcomes are essentially random choices among the available parties – musical chairs. Elections that “throw the bums out” typically do not produce genuine policy mandates, not even when they are landslides. They simply put a different elite coalition in charge. This bloodless change of government is a great deal better than bloody revolution, but it is not deliberate policy change. The parties have policy views and they carry them out when in office, but most voters are not listening, or are simply thinking what their party tells them they should be thinking. This is what an honest view of electoral democracy looks like. It is a blunder to expect elections to deliver more. https://demodexio.substack.com/p/democracy-for-realists-part-17-of?s=w https://demodexio.substack.com/p/democracy-for-realists-part...
- Out_of_Characte 4y ago
  This seems written for american democracy. In the Netherlands, we have a party system with seats divided among all parties based on the votes received. The 'musical chair' isn't there because all people who hold power are present. And if you've got less than 51% of the votes, which is always the case so far, Then you are forced to work together with some other party. So your influence is based on votes and likeability. If no one wants to work with you, no policy change will happen.
  - lkrubner 4y ago
    While much of their research is focused on America, they offer substantial evidence that this applies to all democracies, not just America. They devote substantial pages to Hitler's election in 1932/1933, and they refute the idea that the crucial surge of voters in 1932 were necessarily on board with much of the Nazi agenda. The voters were simply voting against those who held power in 1932. Crucially, they point out, in every democracy, over and over again, the public will vote out the ruling party whenever the economy is bad. Therefore, the public does not seem to have any particular allegiance to any particular theory of the economy. Does socialism work? Does free trade work? Do markets work? The public doesn't seem to have much commitment to any of these ideas. Instead, when the economy is bad, the public will vote against whoever is in power, and they will vote for the other parties, regardless of what those other parties believe in, therefore, as they said, from the point of view of the people who run the parties, it is a game of musical chairs. Consider this bit: Page 205 A crucial feature of this brief litany of electoral responses to the Depression is that the ideological interpretation customarily provided for voters’ reactions in the United States does not turn out to travel well. Where conservatives were in power when the Depression hit they were often replaced with liberals or socialists, as in the United States and Sweden. But where relatively leftist governments were in power during significant downturns they were often replaced with more conservative alternatives, as in Britain and Australia. Where the existing party system was oriented around noneconomic issues, as in Ireland, voters rejected the “ins” and replaced them with “outs” whose policy positions cannot even be sensibly classified in left-right terms. Where the timing of elections forced more than one major party to stand for reelection during the worst years of the Depression, as in Canada and Sweden, voters seem to have been perfectly willing to reject both in turn. Where complex coalition politics diffused responsibility, as in France and Germany, discontented citizens turned to unstable coalitions, to fringe parties, or to the streets. Simply put, there is no consistent ideological logic evident in voters’ responses to the Depression when we look beyond the American case. When voters got a chicken in every pot at election time, they usually liked the incumbent party’s ideology just fine, whatever it happened to be. But when incomes eroded and unemployment escalated, they became ripe for defection to anyone who promised to bring home the poultry.
ciconia 4y ago
GDP growth comes from machines, not humans.
- imtringued 4y ago
  GDP growth comes from increasing production and consumption simultaneously. If you produce more but don't consume more you merely increased productivity but did not grow the economy.
  - AdrianB1 4y ago
    Or you can export, like Germany.
whimsicalism 4y ago
You are comparing a count to a flow. Workers are twice as productive and GDP is more than doubled. How is that inconsistent?
mensetmanusman 4y ago
Productivity compensation. E.g. you work less the more productive you are.

tmnvix 4y ago

Maybe a corresponding growth in credit has allowed the financial sector to capture the increased productivity? A lot of loans are given for non-GDP transactions (i.e. purchases of existing assets as opposed to actual business and infrastructure investment).

lkrubner 4y ago

On the political aspect, you are almost quoting Achen & Bartels, see here in particular: https://demodexio.substack.com/p/democracy-for-realists-part-15-of?s=w https://demodexio.substack.com/p/democracy-for-realists-part... They make the point that the public often screams at whoever the leader is, regardless of whether the leader has any power over economic events, and regardless of whether the leader is conservative or socialist. There is also this: Democracy for Realists, 2016 Why Elections Do Not Produce Responsive Government By Christopher H. Achen & Larry M. Bartels Page 312 The result is that, from the viewpoint of governmental representativeness and accountability, election outcomes are essentially random choices among the available parties – musical chairs. Elections that “throw the bums out” typically do not produce genuine policy mandates, not even when they are landslides. They simply put a different elite coalition in charge. This bloodless change of government is a great deal better than bloody revolution, but it is not deliberate policy change. The parties have policy views and they carry them out when in office, but most voters are not listening, or are simply thinking what their party tells them they should be thinking. This is what an honest view of electoral democracy looks like. It is a blunder to expect elections to deliver more. https://demodexio.substack.com/p/democracy-for-realists-part-17-of?s=w https://demodexio.substack.com/p/democracy-for-realists-part...

Out_of_Characte 4y ago
This seems written for american democracy. In the Netherlands, we have a party system with seats divided among all parties based on the votes received. The 'musical chair' isn't there because all people who hold power are present. And if you've got less than 51% of the votes, which is always the case so far, Then you are forced to work together with some other party. So your influence is based on votes and likeability. If no one wants to work with you, no policy change will happen.
- lkrubner 4y ago
  While much of their research is focused on America, they offer substantial evidence that this applies to all democracies, not just America. They devote substantial pages to Hitler's election in 1932/1933, and they refute the idea that the crucial surge of voters in 1932 were necessarily on board with much of the Nazi agenda. The voters were simply voting against those who held power in 1932. Crucially, they point out, in every democracy, over and over again, the public will vote out the ruling party whenever the economy is bad. Therefore, the public does not seem to have any particular allegiance to any particular theory of the economy. Does socialism work? Does free trade work? Do markets work? The public doesn't seem to have much commitment to any of these ideas. Instead, when the economy is bad, the public will vote against whoever is in power, and they will vote for the other parties, regardless of what those other parties believe in, therefore, as they said, from the point of view of the people who run the parties, it is a game of musical chairs. Consider this bit: Page 205 A crucial feature of this brief litany of electoral responses to the Depression is that the ideological interpretation customarily provided for voters’ reactions in the United States does not turn out to travel well. Where conservatives were in power when the Depression hit they were often replaced with liberals or socialists, as in the United States and Sweden. But where relatively leftist governments were in power during significant downturns they were often replaced with more conservative alternatives, as in Britain and Australia. Where the existing party system was oriented around noneconomic issues, as in Ireland, voters rejected the “ins” and replaced them with “outs” whose policy positions cannot even be sensibly classified in left-right terms. Where the timing of elections forced more than one major party to stand for reelection during the worst years of the Depression, as in Canada and Sweden, voters seem to have been perfectly willing to reject both in turn. Where complex coalition politics diffused responsibility, as in France and Germany, discontented citizens turned to unstable coalitions, to fringe parties, or to the streets. Simply put, there is no consistent ideological logic evident in voters’ responses to the Depression when we look beyond the American case. When voters got a chicken in every pot at election time, they usually liked the incumbent party’s ideology just fine, whatever it happened to be. But when incomes eroded and unemployment escalated, they became ripe for defection to anyone who promised to bring home the poultry.

ciconia 4y ago

GDP growth comes from machines, not humans.

imtringued 4y ago
GDP growth comes from increasing production and consumption simultaneously. If you produce more but don't consume more you merely increased productivity but did not grow the economy.
- AdrianB1 4y ago
  Or you can export, like Germany.

whimsicalism 4y ago

You are comparing a count to a flow. Workers are twice as productive and GDP is more than doubled. How is that inconsistent?

mensetmanusman 4y ago

Productivity compensation. E.g. you work less the more productive you are.