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Why isn’t new technology making us more productive?

nytimes.com

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Re: Why isn’t new technology making us more productive?

#61

Post by Aunche »

uejfiweun wrote: post #2

I have a hard time believing this thesis that modern technology doesn't help productivity. Think about CRM software. Could you imagine having to go through hundreds of filing cabinets and massive systems just to get information about a customer? What about 100 SDRs doing this at the same time, every day? How about trying to meet with someone on the other side of the country? Or having to hire hundreds of assembly lin…

Of course regular people are seeing benefits to increased productivity. The question is whether these benefits are really benefits at all. The average adult spends over 12 hours a day consuming media [1]. It's worth noting that much of this is passive consumption like radio in the background, but active consumption is undeniably increasing as well, most notably smartphone usage. I think the problem is that the more optimized our society becomes, the less true the economic assumption of rational human behavior becomes. Google Maps, for example, saves me time looking at maps rather than doing browsing Hackernews. However, when I think about it rationally, I was no less happy spending a few minutes planning my route before a trip instead of browsing HN during that same time.

[1] https://www.nielsen.com/us/en/insights/report/2020/the-niels...

Re: Why isn’t new technology making us more productive?

#62

Post by wvenable »

gumby wrote: post #17
wvenable wrote: post #10

Earlier quoted context omitted.

I'm not sure how they're measuring productivity. From my own experience as a software developer, I've seen how software makes individuals more productive. But the end result of this productivity is not 2x as much output overall but 0.5x as many people to achieve the same level of productivity. We're decreasing costs but maybe the market doesn't need 2x or 5x more productivity. There just isn't that kind of demand any…

"Productivity" means "amount of input required to get a given output." I think you might be thinking of "productivity" as a synonym for "output". Usually in economics the input is labor hours, but for example "energy intensity" is the productivity of how much energy a process uses. In the macroeconomic case it's GDP divided by total energy used, but some industries are more energy intensive than others -- they have l…

But how is this productivity measured across an entire country? How does unemployment factor in? If I'm making the workers twice as effective but we then lay off 50% of the workforce -- how does that factor in?

I've made many jobs disappear.

Re: Why isn’t new technology making us more productive?

#63

Post by jstarfish »

DANK_YACHT wrote: post #26
jstarfish wrote: post #4

Earlier quoted context omitted.

> Think about CRM software. Could you imagine having to go through hundreds of filing cabinets and massive systems just to get information about a customer? A Rolodex used to be enough. Advancement replacing it with "hundreds of filing cabinets" should tell you something.

> Advancement replacing it with "hundreds of filing cabinets" should tell you something. A rolodex was enough because that's all that could be managed by an individual. If the number of names needed by a person grew past the size of a rolodex, they were simply out of luck because no system existed that would allow them to efficiently handle that much data. That's my takeaway at least.

> A rolodex was enough because that's all that could be managed by an individual. If the number of names needed by a person grew past the size of a rolodex, they were simply out of luck because no system existed that would allow them to efficiently handle that much data. That's my takeaway at least.

Yes, absolutely true.

Given "hundreds of filing cabinets" though, how many of those leads can or will even be contacted in the salesperson/company's lifetime? How many leads will themselves have died before you even get to their number?

It's "advancement" only in the sense that we've made hoarding more efficient (which is a technical achievement in itself).

Re: Why isn’t new technology making us more productive?

#64

Post by tomatotomato37 »

throw8383833jj wrote: post #35
uejfiweun wrote: post #2

I have a hard time believing this thesis that modern technology doesn't help productivity. Think about CRM software. Could you imagine having to go through hundreds of filing cabinets and massive systems just to get information about a customer? What about 100 SDRs doing this at the same time, every day? How about trying to meet with someone on the other side of the country? Or having to hire hundreds of assembly lin…

It sounds plausible: all the benefits have gone to the rich. So, I set out to see what a world would be like if we "redistributed" all those "benefits". So, simply take the entire wealth of every billionaire in the US and divide it by the number of citizens and number of years required to acquire that wealth. It's a relatively simply equation: Billionaire wealth / Citizens / 30 Years = Yearly Redistribution 4T / 300…

I'm reality it would be even less than that since the wealth of most billionaires is in the form of speculative wealth such as company stock. If tomorrow everyones wealth was liquidated through a magical oracle that could know the true economic value of any given asset you'd find there would be a lot less billionaires in the world

Re: Why isn’t new technology making us more productive?

#65

Post by throw8383833jj »

dahart wrote: post #45
throw8383833jj wrote: post #35

Earlier quoted context omitted.

It sounds plausible: all the benefits have gone to the rich. So, I set out to see what a world would be like if we "redistributed" all those "benefits". So, simply take the entire wealth of every billionaire in the US and divide it by the number of citizens and number of years required to acquire that wealth. It's a relatively simply equation: Billionaire wealth / Citizens / 30 Years = Yearly Redistribution 4T / 300…

> So, if you stole every last dollar from every last billionaire in the US and redistributed it for the last 30 years, each person would only get 500$ per year. Loaded use of the world “stole” there. This is a faulty analysis. It’s well studied and well known, for example, that the top 10% of people income wise have ~70% of the wealth in the US. Similar patterns exist globally. This has been reproduced many ways by m…

"stole" or redistribute. the math works out the same in the end. the reason I used "stole" is because if you "redistribute" every ounce of someone's wealth, I imagine you might get some push back.

You can re-apply this formula to various top N% but you get similar numbers: both for income redistribution and wealth redistribution.

The reason all those articles of top 10% have 70% of the wealth seem so impressive is not because the top 10% have so much, it's because the rest of the 90% has so little. and so even a modest amount in the top 10% is much greater than the tiny bit the bottom 90 has.

Re: Why isn’t new technology making us more productive?

#66

Post by uejfiweun »

throw8383833jj wrote: post #35
uejfiweun wrote: post #2

I have a hard time believing this thesis that modern technology doesn't help productivity. Think about CRM software. Could you imagine having to go through hundreds of filing cabinets and massive systems just to get information about a customer? What about 100 SDRs doing this at the same time, every day? How about trying to meet with someone on the other side of the country? Or having to hire hundreds of assembly lin…

It sounds plausible: all the benefits have gone to the rich. So, I set out to see what a world would be like if we "redistributed" all those "benefits". So, simply take the entire wealth of every billionaire in the US and divide it by the number of citizens and number of years required to acquire that wealth. It's a relatively simply equation: Billionaire wealth / Citizens / 30 Years = Yearly Redistribution 4T / 300…

It's not that I advocate for wealth redistribution, quite the opposite in fact. But I certainly wish that these leaders would just, y'know, RAISE WAGES. Rent is skyrocketing, housing is skyrocketing, medical expenses are skyrocketing, car prices are skyrocketing, and after 40 years of this, it's finally just now that wages are starting to catch up a tiny bit. Meanwhile, CEO pay has risen >30% since the pandemic alone: https://www.forbes.com/sites/annefield/2022/05/23/ceo-worker...

Re: Why isn’t new technology making us more productive?

#67

Post by throw8383833jj »

Enginerrrd wrote: post #57
throw8383833jj wrote: post #35

Earlier quoted context omitted.

It sounds plausible: all the benefits have gone to the rich. So, I set out to see what a world would be like if we "redistributed" all those "benefits". So, simply take the entire wealth of every billionaire in the US and divide it by the number of citizens and number of years required to acquire that wealth. It's a relatively simply equation: Billionaire wealth / Citizens / 30 Years = Yearly Redistribution 4T / 300…

>I have a different theorey. The US and other developed countries have been loosing ever greater amounts of wealth. Wealth per capita has decreased dramatically over the last 50 years. The causes are too numerous to go into, but there are MANY. I find this hypothesis very intriguing. I too have found it troubling that the narrative against billionaires doesn't quite seem to line up with the envelope math. That said,…

as a starting point for figuring out the drop in wealth, I think we should calculate things in terms of number of man hours worked to achieve a given objective: shelter, food, water. Using dollars and CPI numbers is fraught with problems due to problems in their methodologies, which are quite numerous.

The most important aspects of wealth are the basic needs of human beings: shelter, food, water and by extension transportation (because it's required to earn "money"), healthcare (because if you have an accident they can come after your shelter), and education (because it's a requirement for earning money").

Now we have a framework for identifying drops in wealth.

I think the biggest drops in wealth have occurred in shelter, medical and a little bit in transportation. if you dive into those with the methodology of number of man hours worked to achieve them, you'll see what i'm talking about. Sometimes it's not obvious. Cost per mile in transportation can decrease (progress) and you can still get a decrease in wealth, if for instance the average commute distance increases faster than the drop in cost per mile. Just an example, of where increasing capabilities over time, don't necessarily translate to greater wealth. Generally speaking don't just calculate the increase in capability/man hour but also the amount of capability required to achieve the objective.

Growing Govt: over the last 100 years we've seen countries grow govt spend as percent of GDP from low single digits to 40 to 50%. You may be in favor of all this spending but I strongly suspect that the total amount you get back from govt, is less than what went in. example: "this is especially apparent when someone needs to pay 5K for a lawyer, just to apply for medicaid." alot of wealth can be lost in this way. solution: society needs much more efficient means of wealth transfer mechanisms.

Hypothesis: exponential Growing human population on a finite planet with finite resources (finite amount of developal land), ore, oil, commodities, will lead to or has led to decreases in wealth which show up as paying more and more for things.

Re: Why isn’t new technology making us more productive?

#68

Post by mattgreenrocks »

throw8383833jj wrote: post #60
nebula8804 wrote: post #49

Earlier quoted context omitted.

>The US and other developed countries have been loosing ever greater amounts of wealth. Wealth per capita has decreased dramatically over the last 50 years. The causes are too numerous to go into, but there are MANY. Don't leave us hanging throw8383833jj, where did the wealth go?

The biggest drop in wealth is Shelter and Medical. 50 years ago land was much cheaper. A 300K house (non-land cost) costs 310K (maybe 10k for the land). Whereas today, in states where much job creation happens (i won't name names), a 300K house costs 600K or more. You could say, the previous land owner made all that money and it's true. But, it's just a one time wealth transfer from the latest generation to previous…

Agree! That’s super interesting. I’ve longed for a life that is much less coupled to work. Thinking about the US, it is somewhat ironic that many US residents think of themselves as self-reliant yet end up inadvertently supporting systems that undermine true autonomy.

Re: Why isn’t new technology making us more productive?

#69

Post by gumby »

wvenable wrote: post #62
gumby wrote: post #17

Earlier quoted context omitted.

"Productivity" means "amount of input required to get a given output." I think you might be thinking of "productivity" as a synonym for "output". Usually in economics the input is labor hours, but for example "energy intensity" is the productivity of how much energy a process uses. In the macroeconomic case it's GDP divided by total energy used, but some industries are more energy intensive than others -- they have l…

But how is this productivity measured across an entire country? How does unemployment factor in? If I'm making the workers twice as effective but we then lay off 50% of the workforce -- how does that factor in? I've made many jobs disappear.

> But how is this productivity measured across an entire country?

On a total GDP basis it would be GDP divided by labor hours, no more no less. A national economy is complex, and especially one like the US or Europe, in which a lot of financial services are involved. So typically it is done on a sector basis (labor force productivity in steelmaking or construction, or mining, or office work).

Sometimes it's quite tricky: when the "output" of a given person goes up a lot it could lead to a different product (e.g. when the spreadsheet meant one person could do financial analysis that had previously required multiple people and a lot of time, it didn't mean less time doing analysis but instead significantly more sophisticated analysis in the same time, with the objective (at least) of finding better deals or avoiding worse ones).

> How does unemployment factor in?

It doesn't. It's simply output divided by input. Don't mix the two.

The same output with half the people means a doubling in productivity for that activity. What happens to the other half of people? Orthodox economics says they find some other job, perhaps a more productive one or more likely less so. Pragmatics says some never work again, some find a (often but not always) better job.

That's harsh, but the "lump of labor" fallacy is indeed a fallacy.

Re: Why isn’t new technology making us more productive?

#70

Post by gumby »

tshaddox wrote: post #53
gumby wrote: post #17

Earlier quoted context omitted.

"Productivity" means "amount of input required to get a given output." I think you might be thinking of "productivity" as a synonym for "output". Usually in economics the input is labor hours, but for example "energy intensity" is the productivity of how much energy a process uses. In the macroeconomic case it's GDP divided by total energy used, but some industries are more energy intensive than others -- they have l…

> "Productivity" means "amount of input required to get a given output." I think you might be thinking of "productivity" as a synonym for "output". Okay but surely we're only talking about average productivity with some assumptions on the approximate employment rate and hours worked per week. No one is going to be impressed by a "5% increase in productivity" next year if unemployment rises to 99%, the 1% of remaining…

> Okay but surely we're only talking about average productivity with some assumptions on the approximate employment rate and hours worked per week.

No. Productivity is simply output divided by some input factor. Employment rate, hours worked per week, wage: none are involved in that calculation (unless you're measuring productivity of the wage, i.e. COGS).

> No one is going to be impressed by a "5% increase in productivity" next year if unemployment rises to 99%, the 1% of remaining workers only work 10 hours per week, but the average hour yields 5% higher output than the previous year.

On the contrary, investors and managers will be very impressed by that.

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