top | item 28017771

Where has all the productivity gone?

236 points| wellpast | 4 years ago |johndcook.com | reply

211 comments

order
[+] robjan|4 years ago|reply
There is a huge assumption here that productivity isn't increasing, which is false. Economic output per hour worked has been steadily increasing in every country since their respective industrial revolutions.

When you go to the source tweet, it turns out that it's comparing the developed world to the developing world. Developing economies will always grow faster, but not necessarily efficiently, because there's more low hanging fruit to pick. These low hanging fruit can be picked by throwing more people at the problem (increasing workforce participation or working longer hours).

One example is how much more time it takes to build infrastructure in America vs China. If you look at the data[0], productivity in both countries is growing at roughly the same rate. It pretty much invalidates the assertion in the blog and the source tweet.

[0] https://ourworldindata.org/grapher/labor-productivity-per-ho...

[+] lkrubner|4 years ago|reply
Those are PPP numbers, which means they are a total joke. The graph you post does not show the post war boom, nor does it show the productivity stagnation after 1973. The USA went from 3% per year productivity growth, before 1973, to 1.5% productivity growth after 1973. None of that is visible in the chart because the chart is using PPP numbers.

But, as a separate issue, the above essay is focused on computers, and so it implicitly raises the Solow Productivity Paradox: why don't computers seem to add anything to productivity?

See:

The Solow Productivity Paradox: What Do Computers Do to Productivity?

https://www.brookings.edu/articles/the-solow-productivity-pa...

McKinsey wrote this in 2018, predicting a productivity boom was coming soon, though of course this prediction has been made often since 1973, and the only time it was even slightly true was during the boom in big box retail 1995-2005:

https://www.mckinsey.com/business-functions/mckinsey-digital...

It's well known that in the 1800s the telegraph and then the telephone allowed a large scale re-organization of capital, and capital invested heavily to take advantage of the new technologies, but it was impossible to see a productivity benefit. These technologies allowed new systems of control, but not necessarily any productivity benefit. Since 1970 computer network technologies have offered a similar reorganization, but they are vastly more powerful than the telephone, and they allowed a re-organization that was vastly more profound than any previous reorganization of capital. Millions of jobs were outsourced to India, China, Hong Kong, Singapore, and then Brazil, Russia, Romania, etc.

[+] alexgmcm|4 years ago|reply
I think the tweet linked to by OP is using the colloquial definition of productivity (i.e. I can get more stuff done) and uses examples of computer technology etc.

This isn't to be confused with the economic definition of GDP per hour worked - which has far more to do with the sectors of industry that a country has.

After all, a few financiers doing million-dollar deals is always going to generate more GDP per hour than coltan miners, even though it's not obvious which is actually generating more wealth. Robert F Kennedy famously said the GNP "measures everything in short, except that which makes life worthwhile".

[+] coldtea|4 years ago|reply
>There is a huge assumption here that productivity isn't increasing, which is false.

Actually the assumption in the post is the exact opposite: that productivity has increased.

The question it poses then is "so what do we have to show for it?".

[+] hn_throwaway_99|4 years ago|reply
> These low hanging fruit can be picked by throwing more people at the problem (increasing workforce participation or working longer hours).

I haven't read the article yet, but note increasing workforce participation or working hours doesn't increase productivity - that just increases the denominator for the productivity calculation, and unless it increases the numerator faster there is no productivity increase.

[+] onlyrealcuzzo|4 years ago|reply
GDP doesn't take into consideration public debt.

If public debt is up 100% and GDP has barely changed - I don't think that's cause for celebration that GDP / hours worked = we are more productive.

I'm not saying this is the case. But people use GDP a lot to make points like this - and it's important to talk about how much public debt is increasing GDP.

[+] skohan|4 years ago|reply
> The Great Dissipation.

Yeah I was consulting for about 5 years and this is something I saw inside a lot of companies, especially when they get sizable funding: they become simultaneously obsessed with hiring and process, and very little real work gets done.

To be honest, I think it might be an inevitability of the productivity boom. Thanks to technology and automation, it's possible for a single individual to accomplish what it might have taken dozens or hundreds of people to do a generation or so ago.

When it becomes possible for for a small subset of the population to create enough value to support essentially everyone else, it it just changes the parameters of the social game we are all playing. When essentially all the manpower is needed to progress society, the optimal strategy is to reward the most productive individuals to incentivize others to increase their own productivity. When there's an excess of productivity, the optimal strategy may be to put yourself in a position to capture the value of those few productive individuals.

But I think it's also something we can try to address via IP law. Currently we don't do a very good job of incetivizing creating something new. The current state of patent law essentially serves to bully small players out of the market who cannot afford to defend against dubious patent claims. Copyright is used as a cudgel to keep small creators from iterating on culture. In a lot of ways, it's fair to see the game as rigged, and to come to the conclusion that it's not really worth it to create something new.

If you ask me, the single best thing we could do to improve productivity would be to make it easier for people to own the products of their creativity.

[+] MattGaiser|4 years ago|reply
> this is something I saw inside a lot of companies, especially when they get sizable funding: they become simultaneously obsessed with hiring and process

A lot of it just seems to be driven by strange attempts at optimization. For example, at my company, there was a lot of time spent on figuring out developer metrics (for all four of us on the team at its peak) and cost accountability.

On the cost accountability side, one thing that has happened three times is that the developers have been idled so the project will not go over budget in time tracking. We were still paid. We were still at work. But to keep an internal budget on track, we were told to drop our tools and sit there.

[+] BeFlatXIII|4 years ago|reply
> If you ask me, the single best thing we could do to improve productivity would be to make it easier for people to own the products of their creativity.

The problem arises when my creativity arises from finding new uses for your invention. Whose creativity was the end result? It’s clear that the moral rights should be split, but fairly determining that split for legal accounting is near-impossible. As a concrete example, look to the endless lawsuits over unauthorized music sampling against other musicians.

[+] 127|4 years ago|reply
It's indeed very notable that there's a lot of talk how to make people generate more value to others, and nothing about how people find ways to consume the value that others create.
[+] fhssn1|4 years ago|reply
'Why aren't we far more productive?' sounds not too different from 'Why don't we have infinite growth on a finite planet?'

- There is not enough meaningful democratizable work. Most work is either menial, or challenging. And I'm not even talking about the third kind of work [1].

- Menial work is getting more and more automated.

- Challenging work doesn't necessarily scale with human resources beyond a certain point (e.g., If 1000 researchers are already working on cancer, increasing the number to 10,000 isn't necessarily going to help find a cure faster).

[1] https://www.strike.coop/bullshit-jobs/

[+] failuser|4 years ago|reply
Why do you think that 10x increase in cancer researchers would not help find the cure faster? Do you think there is one supergenius destined to find the solution and he is already working on it? 10x researches can try out 10x approaches or concentrate of specific types of cancer. From what I understand, most of actual research is done by hungry grad students and the higher your position get the more time you spend of trying to keep or expand the funding. I know that keeping the grad students overworked and hungry keeps many grifters out of science, but at what cost?
[+] AtlasBarfed|4 years ago|reply
Our processing speed is way up, but I believe our cost of energy has more or less not grown substantially.

In fact, with proper economic cost accounting like externalities as we try to deal with global warming, costs are going up.

Solar/wind are gradually starting to improve things in meaningful ways but they are a fundamentally different grid design.

Perhaps a modular LFTR reactor design can beat what Solar/Wind will settle at on an EROEI measure once solar/wind are out of their main economies of scale and techonological development curves.

But what we are entering for the next century is clearly one of resource limitations, and working much harder to more efficiently use them.

[+] MattGaiser|4 years ago|reply
> The Great Dissipation.

One of the shocks about entering the world of work was how little I often got done in any given day because I was in a meeting or had to deal with some form or was waiting on permission or many other things.

I have had whole days disappear with nothing much to show for them at the end. I am sure I am not the only one. And even though it is almost assuredly known that this happens, nobody seems to care.

[+] dazc|4 years ago|reply
I had a job once where I did nothing except for when I would find things to do in order to quell the boredom.

When I tell people this they are usually envious but I always say 'be careful what you wish for'. For me it was the most miserable period of my life.

I've had depression and been homeless - that job was worse.

[+] satyrnein|4 years ago|reply
Meanwhile, one of the great shocks that I experienced when becoming a manager was that I had no better solution to keeping a large group of people aligned and unblocked than a bunch of meetings. Sure, I tinkered around the edges a bit, but it's not fundamentally different. Solutions welcome!
[+] schnitzelstoat|4 years ago|reply
I think people are doing more work than ever, but that doesn't mean the work is useful.

Think about how much easier it is to build a SaaS or something vs. even just ten years ago, but that doesn't mean that the new stuff being built will bring economic value.

In fact we might expect there to be diminishing returns in terms of what delivers real utility and thus improvements in productivity don't translate to a similar increase in wealth generation.

[+] toomuchtodo|4 years ago|reply
Everyone churning out Tiktok, Clubhouse, and Robinhood while we need more SpaceX and Teslas. I’m unsure how to tilt the equation so solving for hard (necessary) engineering is more profitable (or lower risk) than window dressing.
[+] danybittel|4 years ago|reply
This has also been my experience.

Clients will always try to push as much as possible. Ie. if a task is now faster to do, the client will ask for that productivity improvement. It makes sense, if you continue to charge the old price and "keep" the productivity improvement for yourself, the client will eventually go elsewhere, where the productivity improvement is passed to him.

You can somewhat mitigate the problem if you do creative work.

[+] coding123|4 years ago|reply
> This is what happened with the introduction of household appliances. Instead of spending less time doing laundry, for example, we do laundry more often.

I have thoroughly debunked this commonly referenced saying. I don't have a washer and a dryer any more and I can't go into laundromats because Tide delivers a chemical burn. (Even with 2 empty loads in a row.) No, I hand wash all my clothes and it takes way longer than if I did my laundry 5 times a week in my house if I had the machines.

[+] reedlaw|4 years ago|reply
I took it to mean people used to wear clothes longer between washes, not just that we do more frequent, smaller loads. It would be interesting to see a comparison showing how much longer an average person should wear the same clothes in order to make hand washing time commensurate with machine washing time.
[+] imtringued|4 years ago|reply
I don't understand this at all. Doesn't hand washing expose you to more chemicals?
[+] egypturnash|4 years ago|reply
The Great Disparity In Income surely has nothing to do with it. If the boss is making absurd multipliers of your income and barely paying you enough to get by, the last thing you wanna do is get your work done as fast as possible. Pad those hours, give yourself the raise the boss never will. Take stuff from work.
[+] rdiddly|4 years ago|reply
Acknowledging receipt of the King Missile reference!
[+] breck|4 years ago|reply
6) We've made laws that greatly restrict our abilities to use these magical new technologies in their most productive ways.

Google Books was the canary in the coal mine. Remember when Google was going to organize all the world's information and make it accessible and useful? Then the copyright lobby attacked, and over a decade later that project (which is so obviously a quantum leap in terms of what it could do for human productivity) remains on pause (or permanently abandoned? not sure).

People today have access to an endless supply of information noise. If you want quality signal, it's still a trickle.

All the best Internet ideas now are not getting built because of copyright law.

[+] egypturnash|4 years ago|reply
And the problem here is that writing a good book on a thing is something that takes time and effort. Usually enough that it's a full-time or part-time job.

While I am no fan of the copyright maximalism that Disney and other corporations employing armies of people doing work-for-hire have turned copyright law into, I am also a person eking out a living as an artist, and I would like to be able to say "please don't use this thing I made to promote viewpoints inimical to my existence, please don't sell copies of this thing I made without asking my permission first and working out licensing terms", and even "please don't reproduce this thing at all without giving me some money". And I would also like to continue to make enough money off of my work for my bills to be paid. I've found that Patreon's enabling me to give a lot of stuff away, but if I wanted to make some of my work a scarce good, that's a choice I'd prefer to be able to enforce in the courts.

Or perhaps more succinctly: if you want information to be free, you need to figure out how to free its gatherers, tenders, and creators from worrying about their bills.

If you think you have a better idea for freeing information-creators from worrying about their finances than "Kickstarter/Patreon except XXX" or "put ads on all the things", then you might have a project worth chasing.

[+] pas|4 years ago|reply
> which is so obviously a quantum leap in terms of what it could do for human productivity

that's a very strong claim. and it's very likely, unfortunately, false.

we have the great classics all available for free in a multitude of formats. a lot of works slowly but surely mature into the public domain each year, yet there's no discernible productivity growth based on the availability of books.

also, this sadly goes for research papers too. sure, fuck Elsevier and the whole paper mill industry, but the limiting factor is expertise, tenured spots, academic integrity. (see the replicability crisis in psychology, in particular how the many times the whole scientific enterprise is backwards: https://statmodeling.stat.columbia.edu/2011/01/11/one_more_t... and https://statmodeling.stat.columbia.edu/2016/09/21/what-has-h... )

[+] captainbland|4 years ago|reply
Weird article, productivity has increased and is increasing. The real question is whether the result of that productivity is necessarily well harnessed, although that is subjective to a degree. Questions still remain, however, over why so much work is done and yet many of the individuals engaging in that work end up in in-work poverty. That huge amounts of the labour force cannot even afford their own housing.

But I digress, I suspect there is a lot of "hidden" productivity that only emerges at the collective level, which is enabled primarily by better communication and transportation, that is not obvious at the individual level.

[+] falsaberN1|4 years ago|reply
I find it hard to agree with the article. With the escalation of technology the amount of things I get done every day, like, tangible, countable things, has skyrocketed, even more as my education with that technology went up. Not just programming and admin stuff, that includes stuff like art (cheaper, takes less time, gets nicer results) which some people argued would never ever be a replacement for traditional art (I still do some traditional things but I don't have shelves full of materials anymore). Not to mention new avenues like 3D modeling, I don't need a huge studio and large chunks of rock to create a 3D figure anymore, and there are ways to make it a real sculpture if I wanted. Music composing, I don't need several hundred dollars in instruments anymore (nor a complex soundproof studio). I don't need rooms full of machinery to make code or plan complex network arrangements, etc. And for the things that still need to be done the old way©, there are better tools, information and whatnot.

Most of my computer tasks are automated via scripts and homebrewn programs. Maybe I'm some sort of rare example of the third point in the article ("The productivity is here, it’s just only harnessed by the indistractable few."), but I doubt I'm special in any way. It's not like the past had no distractions, and I'd argue distractions in the past were harder to dismiss (having to personally travel to X place to do Y paperwork instead of resolving that with a quick phone call or digital process).

Sure, the pandemic made a few disasters in terms of paperwork and bureaucracy turning extremely slow, but I'd blame that more on poor organization than a side effect of technology.

[+] xondono|4 years ago|reply
> Most of my computer tasks are automated via scripts and homebrewn programs. Maybe I'm some sort of rare example of the third point in the article ("The productivity is here, it’s just only harnessed by the indistractable few."), but I doubt I'm special in any way. It's not like the past had no distractions, and I'd argue distractions in the past were harder to dismiss (having to personally travel to X place to do Y paperwork instead of resolving that with a quick phone call or digital process).

This makes you a rare example. I’ve been saying for years that the real computer revolution will happen when people work with computers, rather than on computers.

Most of the workforce does the same things they did on paper but on a screen. For example, I’ve seen people fill out spreadsheets manually, with a calculator.

A lot of jobs have not seen the speedup of automation, while compliance costs keep growing.

[+] sologoub|4 years ago|reply
> And while moving from Smith Corona 1950 to Word 95 is a big improvement, moving from Word 95 to Word 365 isn’t.

This is an interesting and very important point in overall computing today as well - for the vast majority of use cases, many of the todays top patterns are actually not just a small improvement, but are worse. Keyboard shortcuts are usually (not always) faster than mouse/trackpad driven visual pointers. Many of the current UIs are resource hogs that slow things down by a lot. UI patterns have also gotten somewhat less usable - in many cases one cannot easily tell of a surface is clickable in iOS and Android.

[+] docflabby|4 years ago|reply
Speculation and rent seeking are currently being rewarded more than hard work in this phase of the economic cycle, combined with high inflation which is eroding gdp in real terms.
[+] boomka|4 years ago|reply
the article is a bit weird, I think it refers to productivity paradox: https://en.wikipedia.org/wiki/Productivity_paradox

But it is a well studied topic, with much more than 5 possible explanations offered for it.

I personally think the whole thing is a bit of a nothingburger that comes about as a simple consequence of how we measure productivity, which is via measuring how much money is paid to people. And since monetory / fiscal policy more or less ensures that all the people are always paid something for something, productivity growth is manifested as invention of new service industries, from personal trainers to dietologists. In other words, our productivity metrics mostly measure hours worked.

Better metric would be how many hours worked it takes to produce a ton of nickel, or a bushel of corn, or a typical family car. And those number have been going down consistently, suggestive of strong productivity growth and no paradox.

[+] wussboy|4 years ago|reply
Do you have links or suggestions for stats about “hours worked per bushel of grain etc.”? I’m interested in this area.
[+] superkuh|4 years ago|reply
The material and capital gains of productivity improvements since the 1970s have gone to mega-corporations and their owners instead of to workers.
[+] b9a2cab5|4 years ago|reply
Median U.S. income is higher than any other large developed country, including Germany, France, the nordics, etc. More likely is that computers and automation have enabled small numbers of people to have huge impacts. If one person can create a 10% better solution that solution scales infinitely without any supply constraints to the rest of the market, creating a winner take-all effect.

Scale of impact is historically why finance and law paid well, and it's also why management gets paid more than ever now. If you as a lawyer are 10% better than your competition and you have automation to make the grunt work un-fuck-up-able, you have much more time to make decisions on many more cases. That means the gains accrue to you instead of being spread among a bunch of mediocre lawyers, whereas previously without computers you might have been limited in how much time you could spend on high value work by communication and physical constraints.

In contrast, most workers are performing jobs that are either menial (paper pushing) or automatable, which means there is no way for top performing workers to highly differentiate themselves, since there's no barrier to entry. If you look at software engineers, there is a large gap in skill and business impact between even a Fortune 500 engineer and a FAANG engineer. That gap means 1. ability to highly differentiate yourself, at least to a degree and 2. skilled engineers have huge leverage and impact which translates to higher salaries. When the skill gap ranges from "doesn't understand what a linked list is" to "started a billion dollar company" the income distribution is bound to be heavily bimodal and heavily biased towards the top.

It is no coincidence that the advent of automation and software has both caused finance and law salaries to become more bimodal, and created a highly bimodal market for software engineers themselves.

[+] ximm|4 years ago|reply
> The Great Dissipation

We should stop reinventing the concept of "efficiency gains can be decreased or even nullified by psychological effects" and instead agree on a term for it. So far I found:

- Rebound Effect

- Jevons paradox

- Le Chatelier's principle

- SnackWell effect

- Induced demand

- Parkinson's law

- Risk compensation

I bet there are many more applications to specific domains.

[+] bob33212|4 years ago|reply
In 2007 I ran an automated testing team for a product that had 60M in revenue. It was just me by myself. Today you can find startups with less than 5M in revenue with 5 people with the same productivity. Organizations have expanded to fill the budget provided of them mostly through headcount. Similar to Conway's Law.
[+] chelsea102|4 years ago|reply
This anecdote proves little. Even if taken as representative, there are valid reasons for a differing level of investment, like:

- importance of quality to the product domain

- differences in talent levels and supply of talent

- differences in company stage and expected future revenue growth

[+] failuser|4 years ago|reply
Does the author really expect for computers to make writing novels by hand way more productive? This is such an edge case and the productivity increase is there (spelling, navigation, version control, there is dedicate software that helps you to make sure your lore and timelines are consistent), but until GPT can make consistent books no technology will help him with the core task: engaging story. In most other areas of human endeavor technology does increase productivity, no bluff there.
[+] legulere|4 years ago|reply
The west has a productivity stagnation because it’s concentrating on services instead of industry. The productivity of services grows much slower that that of industry.
[+] ageofwant|4 years ago|reply
For me it has gone into being 'Agile'. 'Agile' has been the largest single worse thing to happen to software development in my experience. It may be appropriate for small shops fighting for their lives, but as a 'waterfall' replacement it has no discernable productivity benefits. It just seems to generate a lot of working the work.
[+] blueblimp|4 years ago|reply
> Technology calls our bluff. Improvements in technology show us that technology wasn’t the obstacle that we thought it was.

It would make sense that, as technology improves but humans don't, the bottleneck would eventually become the humans.

To get around this would require improving the humans (via genetic engineering, for example) or going human-less (via artificial general intelligence, for example).