If you care about innovation and material progress, you learn to care about productivity growth — because it functions as our best available statistical proxy for those desiderata. “Productivity growth isn’t everything,” Paul Krugman famously observed in
Surfing the net during working hours reflects a kind of akrasia, though, don't you think?
It seems to me that the measured growth in living standards in recent years has probably been understated, because people with office jobs now spend a significant fraction of the day goofing off. But to some extent that's what you'd define as "bad productivity growth", because it's far less satisfying than a shortened work day would be.
(I wish I could remember who it was, but someone recently pointed out that access to the Internet at work hasn't just damaged our attention spans; it's also distorted the way we consume culture. Looking at memes is something that fits readily into the gaps between tasks at the office, but reading a novel isn't.)
So I think you can make a case that intensive surveillance at work is potentially positive. Many people might enjoy their lives more if their employers made them work very hard for five hours a day at an unchanged salary, while prohibiting them from doing anything else at their desks.
I wonder if some corporation might try this as an option for their employees. If a lot of them went for it, it would be evidence that the Internet itself is a source of akrasia (maybe the biggest one) and that people can gain autonomy from freely chosen constraints.
I also wonder if part of the resistance to working from home comes from the desire not just to avoid household distractions, but to avoid the distractions of the Internet itself when it's available in an unsupervised settling. Some people who don't like the idea of WFH might thrive on it if they installed the right blocking software on their desktops.
One of the nice things about technology is that it empowers both akrasia and anti-akrasia. You can easily, for example, set "Digital Wellbeing" limits on how much you use particular apps on your phone; and casinos are now, AIUI, often required to consult easily-maintained digital lists of people who have requested that they be denied entry. As we develop new reasons to have to lash ourselves to the mast, we also develop new, fancier, and more comfortable masts to lash ourselves to. One can easily imagine policy taking advantage of these sorts of technologies and mechanism designs to better assist the problem-overuser few with their self-restraint while minimally inconveniencing the moderate-user many.
Nov 28, 2023·edited Nov 28, 2023Liked by Brink Lindsey
Are the "bad" and "ugly" really examples of productivity growth? What you are describing appears more an example of negative internalities and externalities. I touched on this a bit in a discussion on the overconsumption of sugar sweetened beverages (SSBs), which impose costs on both the consumer and third parties:
" people with incomes under $25,000 a year consume about 200 calories of SSBs a day, while those earning $75,000 or more consume under 117."
"In this case, companies profit from SSB sales but do not bear the cost of treating people with Type II diabetes or other ailments that result from those sales. Indeed, it is estimated that 88 percent of the cost of obesity, for example, is borne by third parties."
"In addition to externalities, where third parties incur the cost of decisions, there is a body of evidence that suggests people often understate or do not understand how certain behaviors affect themselves. In this case, how SSB consumption impacts their physical and cognitive health. These are negative “internalities” that also need to be considered when designing a levy."
A tax or levy should, in theory, improve market outcomes by aligning negative internalities and externalities.
There’s a cousin to the production of akrasia industries that I’d think fall into the same bucket of “bad” growth: companies with a business model that promotes wasteful consumption. This could be the bundling or marketing of goods such that consumers are enticed to buy more than they will actually use, forced obsolescence and related strategies to accelerate the cycle of buying replacement goods, increasing use of subscription models for services that then tend to be underused, etc. What’s the marginal gain from an increase in productivity if it’s profitable but not actually useful?
I think the discussion of “ugly” productivity, at least the externalities’ part is not entirely sound.
“There’s no way to think sensibly about the tradeoffs posed by ugly productivity growth unless you place them in historical context. In the early days of industrialization, when mass poverty was still the norm, it was inevitable that rapid progress and ugly side-effects went hand in hand.”
If this means only that the tradeoffs in the past were different in magnitude, no objection. How much additional cost should we impose on a polluting industrial process to avoid a death depends on average life expectancy and income, but it was not zero even at the dawn of the Industrial revolution. The time to start imposing a gradually increasing non-zero tax on net CO2 emissions was not when coal first began powering industrial machinery in England, or probably not even when Edwin Drake successfully struck oil in 1859 in Pennsylvania, but it was before yesterday.
“Productivity growth isn’t everything,” Paul Krugman famously observed in The Age of Diminished Expectations, “but in the long run it’s almost everything. A country’s ability to improve its standard of living depends almost entirely on its ability to raise its output per worker.”
Of course this ignores the problem of how the benefits are distributed. I guess that is a "diffusion" problem. I wonder if our NIMBY is mainly the realization by folks that the benefits of degrading their back yard will go to a sliver of owners, not them and not the community....just saying.
The "bad" and "ugly" forms are indeed externalizes, but good luck internalizing those externalities. Our regulatory regime is simply too costly, our politics are too slow, and full transparency is impossible. In addition, it may be impossible to bake our ever evolving and diverse values into any internalization effort.
What fraction of workers toil in sectors in which output cannot be readily quantified in economic terms? Government, for example.
Education is another. In that sector, productivity would reveal itself as students completing high school qualification in 11 years, rather than 12, in fewer administrators and teachers per student, etc.
How has that fraction of workers changed over time?
You conceptually bridge two literatures here -- economic growth and human flourishing -- and you do a good job of it. I'm less enthusiastic about your conclusion: "We’re rich enough that some forms of productivity growth are no longer worth the candle" -- partly because the "we" that you use loses track of the distributional aspects of productivity (and flourishing) gains, and partly because you seem to turn from noting to wishing away the "ugly" requirements of scale. But I see from links in the essay that you treat these problems in posts that I haven't read yet, so I'll stop on this point until I do.
The other observation I have if that you're joining one domain, economic growth theory, that is based on an agreed mathematical model that you appear to accept, with a second, human flourishing, that has no such agreed model. I'm aware that a few economists -- Edmund Phelps comes to mind -- have turned to the flourishing topic in recent years, but I'm not aware of any consensus around it. So your judgment that "we're rich enough" to pick and choose among strands of productivity without plunging ourselves into de-growth seems to be made in the dark. Of course, politics and our desires for social stability and fairness are always compelling us to choose second-best solutions, from the standpoint of growth, in the name of some other good. But we know from experience (and sometimes from models and empirics) what we pay, in growth, for environmental legislation or old-age pensions. Your very breadth of vision puts us in an area where we have no idea what second-best penalty will be incurred.
Beyond this interesting exploration of the good, bad and ugly aspects of economic progress, there are some broader questions about its relationship to "living wisely and agreeably and well”. Whether there comes a point beyond which even the 'good' kinds might have psychological and social psychological consequences that reduce "human flourishing" in some ways?
"For anyone with even the most basic grasp of history and flimsiest awareness of what are currently the worst places on earth – it would be curmudgeonly not to recognise that life for us is pretty good and has been for a good long time. However the more reflective among us might ponder whether the quantity of human happiness does actually expand to fit the quantity of propitious circumstance or whether happiness is more in the way of a self-levelling constant." https://grahamcunningham.substack.com/p/are-we-making-progress
To put it another way, are there limits to our Western religion of 'Progress'?
"A key thing about all of this is that it’s actually totally fine in moderation."
I think this is part of the problem. Many of these things aren't "totally fine" in moderation. They are simply "less bad". Gambling away a bunch of money and drinking till your hungover isn't actually a good way to spend a weekend, even if you only do it once a year. It would be better to do it zero times a year.
Strong column
Surfing the net during working hours reflects a kind of akrasia, though, don't you think?
It seems to me that the measured growth in living standards in recent years has probably been understated, because people with office jobs now spend a significant fraction of the day goofing off. But to some extent that's what you'd define as "bad productivity growth", because it's far less satisfying than a shortened work day would be.
(I wish I could remember who it was, but someone recently pointed out that access to the Internet at work hasn't just damaged our attention spans; it's also distorted the way we consume culture. Looking at memes is something that fits readily into the gaps between tasks at the office, but reading a novel isn't.)
So I think you can make a case that intensive surveillance at work is potentially positive. Many people might enjoy their lives more if their employers made them work very hard for five hours a day at an unchanged salary, while prohibiting them from doing anything else at their desks.
I wonder if some corporation might try this as an option for their employees. If a lot of them went for it, it would be evidence that the Internet itself is a source of akrasia (maybe the biggest one) and that people can gain autonomy from freely chosen constraints.
I also wonder if part of the resistance to working from home comes from the desire not just to avoid household distractions, but to avoid the distractions of the Internet itself when it's available in an unsupervised settling. Some people who don't like the idea of WFH might thrive on it if they installed the right blocking software on their desktops.
One of the nice things about technology is that it empowers both akrasia and anti-akrasia. You can easily, for example, set "Digital Wellbeing" limits on how much you use particular apps on your phone; and casinos are now, AIUI, often required to consult easily-maintained digital lists of people who have requested that they be denied entry. As we develop new reasons to have to lash ourselves to the mast, we also develop new, fancier, and more comfortable masts to lash ourselves to. One can easily imagine policy taking advantage of these sorts of technologies and mechanism designs to better assist the problem-overuser few with their self-restraint while minimally inconveniencing the moderate-user many.
Are the "bad" and "ugly" really examples of productivity growth? What you are describing appears more an example of negative internalities and externalities. I touched on this a bit in a discussion on the overconsumption of sugar sweetened beverages (SSBs), which impose costs on both the consumer and third parties:
" people with incomes under $25,000 a year consume about 200 calories of SSBs a day, while those earning $75,000 or more consume under 117."
"In this case, companies profit from SSB sales but do not bear the cost of treating people with Type II diabetes or other ailments that result from those sales. Indeed, it is estimated that 88 percent of the cost of obesity, for example, is borne by third parties."
"In addition to externalities, where third parties incur the cost of decisions, there is a body of evidence that suggests people often understate or do not understand how certain behaviors affect themselves. In this case, how SSB consumption impacts their physical and cognitive health. These are negative “internalities” that also need to be considered when designing a levy."
A tax or levy should, in theory, improve market outcomes by aligning negative internalities and externalities.
There’s a cousin to the production of akrasia industries that I’d think fall into the same bucket of “bad” growth: companies with a business model that promotes wasteful consumption. This could be the bundling or marketing of goods such that consumers are enticed to buy more than they will actually use, forced obsolescence and related strategies to accelerate the cycle of buying replacement goods, increasing use of subscription models for services that then tend to be underused, etc. What’s the marginal gain from an increase in productivity if it’s profitable but not actually useful?
I think the discussion of “ugly” productivity, at least the externalities’ part is not entirely sound.
“There’s no way to think sensibly about the tradeoffs posed by ugly productivity growth unless you place them in historical context. In the early days of industrialization, when mass poverty was still the norm, it was inevitable that rapid progress and ugly side-effects went hand in hand.”
If this means only that the tradeoffs in the past were different in magnitude, no objection. How much additional cost should we impose on a polluting industrial process to avoid a death depends on average life expectancy and income, but it was not zero even at the dawn of the Industrial revolution. The time to start imposing a gradually increasing non-zero tax on net CO2 emissions was not when coal first began powering industrial machinery in England, or probably not even when Edwin Drake successfully struck oil in 1859 in Pennsylvania, but it was before yesterday.
“Productivity growth isn’t everything,” Paul Krugman famously observed in The Age of Diminished Expectations, “but in the long run it’s almost everything. A country’s ability to improve its standard of living depends almost entirely on its ability to raise its output per worker.”
Of course this ignores the problem of how the benefits are distributed. I guess that is a "diffusion" problem. I wonder if our NIMBY is mainly the realization by folks that the benefits of degrading their back yard will go to a sliver of owners, not them and not the community....just saying.
The "bad" and "ugly" forms are indeed externalizes, but good luck internalizing those externalities. Our regulatory regime is simply too costly, our politics are too slow, and full transparency is impossible. In addition, it may be impossible to bake our ever evolving and diverse values into any internalization effort.
Finally, no discussion of this is complete without quoting Bobby Kennedy's 1968 speech on the inadequacy of GDP. Very much worth the 4 minutes: https://www.linkedin.com/feed/update/urn:li:share:7135403037954600960/
Recommended read. 👇🏼👇🏼👇🏼
What fraction of workers toil in sectors in which output cannot be readily quantified in economic terms? Government, for example.
Education is another. In that sector, productivity would reveal itself as students completing high school qualification in 11 years, rather than 12, in fewer administrators and teachers per student, etc.
How has that fraction of workers changed over time?
You conceptually bridge two literatures here -- economic growth and human flourishing -- and you do a good job of it. I'm less enthusiastic about your conclusion: "We’re rich enough that some forms of productivity growth are no longer worth the candle" -- partly because the "we" that you use loses track of the distributional aspects of productivity (and flourishing) gains, and partly because you seem to turn from noting to wishing away the "ugly" requirements of scale. But I see from links in the essay that you treat these problems in posts that I haven't read yet, so I'll stop on this point until I do.
The other observation I have if that you're joining one domain, economic growth theory, that is based on an agreed mathematical model that you appear to accept, with a second, human flourishing, that has no such agreed model. I'm aware that a few economists -- Edmund Phelps comes to mind -- have turned to the flourishing topic in recent years, but I'm not aware of any consensus around it. So your judgment that "we're rich enough" to pick and choose among strands of productivity without plunging ourselves into de-growth seems to be made in the dark. Of course, politics and our desires for social stability and fairness are always compelling us to choose second-best solutions, from the standpoint of growth, in the name of some other good. But we know from experience (and sometimes from models and empirics) what we pay, in growth, for environmental legislation or old-age pensions. Your very breadth of vision puts us in an area where we have no idea what second-best penalty will be incurred.
Beyond this interesting exploration of the good, bad and ugly aspects of economic progress, there are some broader questions about its relationship to "living wisely and agreeably and well”. Whether there comes a point beyond which even the 'good' kinds might have psychological and social psychological consequences that reduce "human flourishing" in some ways?
"For anyone with even the most basic grasp of history and flimsiest awareness of what are currently the worst places on earth – it would be curmudgeonly not to recognise that life for us is pretty good and has been for a good long time. However the more reflective among us might ponder whether the quantity of human happiness does actually expand to fit the quantity of propitious circumstance or whether happiness is more in the way of a self-levelling constant." https://grahamcunningham.substack.com/p/are-we-making-progress
To put it another way, are there limits to our Western religion of 'Progress'?
"A key thing about all of this is that it’s actually totally fine in moderation."
I think this is part of the problem. Many of these things aren't "totally fine" in moderation. They are simply "less bad". Gambling away a bunch of money and drinking till your hungover isn't actually a good way to spend a weekend, even if you only do it once a year. It would be better to do it zero times a year.