(Has somebody around here already deconstructed "productivity" by the way? I've seen a lot of stuff in my short life that's been described as "productivity increases" when what was in fact going on could more accurately be described as "wage decreases" or "lower quality." But I won't bother with a deconstruction if someone else has already done one.)
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Has somebody around here already deconstructed "productivity" by the way?
I'm sure Migeru would have the answer in his photographic memory....
FWIW my view is that the anthropocentric assumption that only "Labour" is "productive" - which underpins both conventional and Marxist economics - is complete and utter bollocks analogous to the Sun of Capital orbiting the Earth of Labour.
I bracket this assumption with other bollocks assumptions concerning "inflationary expectations"; homo economicus and all the rest. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
So when obtaining new equipment, a principle concern will be the productivity of the variable inputs ... electricity, people, fabric, etc. ... when using the equipment. The higher the productivity the lower the cost per unit for given variable factor costs. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
But that version of productivity takes into account only the items that have a direct impact on the bottom line.
But measuring what you have to measure to track the tug of war in the division of national income between labor and non-labor claimants on income is not responsible for that confusion.
Being externalities, the externalities do not play the same role in that tug of war over the money flows.
The responsibility for the abuse of the measure lies with those who abuse the measure. Some of the blame must go to traditional marginalist economists who persist in treating "real" GDP as if it was some underlying quantity rather than an artifact ... but even if the profession has clean hands, there would still be voices in the public discourse who would persist in misusing measures in pursuit of their own interests. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
... but if the measures are not produced, then people will just make shit up. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Even if those wages were spent on cheap crap from China, it would increase sales at most of the store chains that are closing. Any consumption that does not get sucked into the black hole of finance would help. Finance and real estate are where almost all of the wealth destruction are occurring.
But what do I know? I am not an economist. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
But that doesn't mean it wouldn't be interesting to see some deconstruction work on the neoclassical theory...
That does not mean that there are no measurement issues raised by the precise details of the creation of the aggregate ... but rather that the critique of one of the aggregate measures should be framed as a relative comparison with another way of doing it.
So roughly speaking, if N is total employment and W the average wage rate, and (PQ) is nominal GDP (noting that the "real" GDP is nothing but (PQ)/P ... that is, it must be kept in mind that what looks like a product of two primitives is really the primitive, which is artificially divided into component factors) ...
(PQ) - NW
is the amount left over for payments to all other income claiments, whether their claim comes from property rights over plant and equipment, natural resources, or they are extracting a rent from an insider position in providing finance to the productive sector.
So labor share of GDP per capita is W, and the share of all other income claimants is {(PQ)/N}-W
Now, applying the artificial factor P, some price index, leaves the artifact Q, the nominal GDP "corrected for inflation", and the share of all other income claimants is P(Q/N)-W
Dividing by Price to work in values "corrected for inflation", (Q/N)-(W/P) is the per capita non-labor share of real national income and (W/P) the labor share.
That (Q/N) is labor productivity, which obviously rests on two pyramids of approximations, since both Q and N are artifacts, but on the other hand also expresses a fundamental point in the tug of war between labor and non-labor claimants on national income, that if labor productivity rises, it is possible for the real wage to rise without having to win a progressively rising share of national income for labor. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
being roughly correct is often of more use than being precise and incorrect.
or, as Keynes used to say: "I'd rather be vaguely right than precisely wrong" "Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
Wikipedia says: Productivity - Wikipedia, the free encyclopedia
Productivity in economics refers to measures of output from production processes, per unit of input.
But what has changed is that unit of input in the public debate has gone from being workhours to money. A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
That's empty-world economics, and while that might have been fine for the 19th century and adequate for the 20th, we're living in an age where full-world economics is needed.
Where the empty world assumptions comes around to bite the traditional marginalist economist on the buttocks is in dipping down into the conventional marginalist micro-economist to provide an underlying model of how hard or easy it is to achieve labor productivity gains. This activity goes under the heading of "putting the macroeconomic model on microeconomic foundations".
Even there, it is possible to assume absolute caps on material inputs, however it is analytically inconvenient, and the convention in traditional marginalist economics is to only assume analytically inconvenient things if absolutely necessary for the specific analytical problem at hand. Therefore the tacit presumption that there is an additional amount of material inputs available "at some price" is almost universally made, whenever the traditional marginalist economist is not explicitly considering a problem involving a resource limit. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Thinking of efficiency (output/input) in ecological terms, I would say it is fairly easy to estimate by looking at what is not output, that is waste. And our modern societies produce a lot which ends up as waste. Problably a world record in low ecological efficiency. The most ecologically efficient human societies would be those that has little or no waste, that is the societies we see as backwards and poor. A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
