Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Great Productivity Puzzle

newyorker.com

Post reply on HN
Print view View original

11–20 of 123 posts

Re: The Great Productivity Puzzle

#11

Post by darawk »

Am I missing something or did the 'debunking' of theory #1 not hold any water?

> First, they said, mismeasurement has always been an issue in the information-technology sector, and it was just as big an issue in the period from 1995 to 2005, when productivity was growing rapidly.

If your hypothesis is that non-technological productivity growth has reached its peak but technological productivity growth is accelerating, then this is exactly what you'd expect. And you'd expect the mis-measurement issue to take you much further from the mark then you do now.

Saying that mismeasurement has always been an issue completely ignores the fact that how big of an issue it is relative to other factors may have changed.

> Second, the productivity slowdown hasn’t been confined to sectors in which output is tough to measure: it has been broadly based

This is just stating the contradiction of the original hypothesis. If mis-measurement is an issue, how do you know that it's broadly based?

> And, finally, many of the benefits that we’ve reaped from things like smartphones and Google searches have been confined to non-market activities

While true, it's hard to imagine that things like access to Wikipedia, Stack overflow, instant global messaging, etc..Haven't significantly enhanced productivity for a variety of office workers as well. Not to mention automation technologies a la Amazon's Kiva robots and other factory automation tech.

Re: The Great Productivity Puzzle

#12

Post by AnimalMuppet »

nostromo wrote: post #9
AnimalMuppet wrote: post #5

Earlier quoted context omitted.

> The economics of info tech are REALLY good except in the official GDP numbers. Take Google, for example. The (economic) value that Google provides to me is far more than I pay for, which is zero. It's even far more than what Google makes from the ads it serves me. Google is capturing as revenue only a small fraction of the value it creates. That (and similar cases) are why much of the info tech economic/productivit…

Well, the official GDP numbers also don't count the value of sunshine and rainbows -- because that's not what they're created to measure. If you get a lot of value from something you pay nothing for, and it doesn't increase your job output in dollars and cents, then there's no reason it should increase GDP.

By that logic, stuff I buy that doesn't increase my job output (like movies, music, and ice cream) also shouldn't be in GDP. Stuff I consume belongs in GDP, even if it doesn't turn into stuff I produce.

Re: The Great Productivity Puzzle

#13

Post by nostromo »

AnimalMuppet wrote: post #12
nostromo wrote: post #9

Earlier quoted context omitted.

Well, the official GDP numbers also don't count the value of sunshine and rainbows -- because that's not what they're created to measure. If you get a lot of value from something you pay nothing for, and it doesn't increase your job output in dollars and cents, then there's no reason it should increase GDP.

By that logic, stuff I buy that doesn't increase my job output (like movies, music, and ice cream) also shouldn't be in GDP. Stuff I consume belongs in GDP, even if it doesn't turn into stuff I produce .

You missed where I said:

> something you pay nothing for

So, obviously, yes, if you buy ice cream GDP will go up.

Re: The Great Productivity Puzzle

#14

Post by Animats »

Something that's puzzled me for a while: why haven't we hit "peak office" yet? Why are there still so many people working in offices? By now, we should have many abandoned office blocks, much as we have abandoned factories in the Rust Belt. But that's not happening. We have all this office automation, but too many people in offices.

Are marketing cost and G&A (general and administrative) increasing as a fraction of cost of goods/services sold? Perhaps it's the overhead of capitalism. Advertising just moves demand around; where the savings rate is low, it can't create it. There are a surprising number of products, from movies to telephone service, where the marketing cost exceeds the cost of providing the product or service.

One problem with a winner-take-all economy is that the cost of competition goes up, because being slightly better at the margin becomes more expensive. It's like sports; the additional input required for 1% more performance is a lot more than 1%, once you're close to the record.

Re: The Great Productivity Puzzle

#15

Post by roymurdock »

tunesmith wrote: post #3

What sorts of constraints in our daily lives feel blindingly obvious, in terms of wishing for a solution? I mean beyond true life-transition concerns like finding new housing or new jobs. In the past, I'm sure a clothes-washing machine must have felt pretty obvious even if people weren't sure what it was. It's always been a pain to do laundry and there had to have been a wish for some sort of contraption to make it d…

Eating, exercising, sleeping.

One day we'll look back on these activities as we look back on hand-washing clothing, drawing water from the town well, burning coal/wood for central heating, etc.

The question is: what will "we" be at that point.

Re: The Great Productivity Puzzle

#16

Post by AnimalMuppet »

nostromo wrote: post #13
AnimalMuppet wrote: post #12

Earlier quoted context omitted.

By that logic, stuff I buy that doesn't increase my job output (like movies, music, and ice cream) also shouldn't be in GDP. Stuff I consume belongs in GDP, even if it doesn't turn into stuff I produce .

You missed where I said: > something you pay nothing for So, obviously, yes, if you buy ice cream GDP will go up.

OK, now I see how to parse what you said. If I pay nothing, and I produce nothing, than it doesn't add to GDP. True, as GDP is constituted. But what if it is free and still makes me better off?

Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. But are they only economically valuable when they cost money? If I used Windows to create my business instead, that would contribute to GDP, even if my business failed. Two (not perfectly) equivalent products, but one counts as GDP, and the other doesn't. Once you see that "economics" can contain more than dollars, then you see that GDP isn't the correct measure of economic activity.

Re: The Great Productivity Puzzle

#17

Post by dragonwriter »

AnimalMuppet wrote: post #16
nostromo wrote: post #13

Earlier quoted context omitted.

You missed where I said: > something you pay nothing for So, obviously, yes, if you buy ice cream GDP will go up.

OK, now I see how to parse what you said. If I pay nothing, and I produce nothing, than it doesn't add to GDP. True, as GDP is constituted. But what if it is free and still makes me better off? Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. But are they only economically valuable when they cost money? If I used Windows to create my business…

> Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free.

And if you do, that business shows up in the GDP.

Re: The Great Productivity Puzzle

#18

Post by Swizec »

Animats wrote: post #14

Something that's puzzled me for a while: why haven't we hit "peak office" yet? Why are there still so many people working in offices? By now, we should have many abandoned office blocks, much as we have abandoned factories in the Rust Belt. But that's not happening. We have all this office automation, but too many people in offices. Are marketing cost and G&A (general and administrative) increasing as a fraction of c…

If nothing else, it's because people like to separate their living space from their working space. For reasons ranging from Easier To Get Into Work Mode, to No Screaming Toddlers.

It turns out renting office space or a big enough apartment/house to have an extra office is expensive. Wouldn't it be nice if somebody else paid for that? Perhaps somebody who also pays you and can then recuperate this cost with scale by putting multiple people together in the same area.

If everyone had their own home office, how much would salary have to increase?

Take San Francisco for example. Renting a 2-bedroom apartment instead of a 1-bedroom would increase my and my girlfriend's rent by about $1,000 per month. This would give one of us a good home office. The startup I work for pays about $10,000 to rent a big-ish office space. There are 15 of us working in it pretty comfortably.

That's a lot cheaper than everyone paying an extra $1,000.

Re: The Great Productivity Puzzle

#19

Post by thedevil »

nostromo wrote: post #9
AnimalMuppet wrote: post #5

Earlier quoted context omitted.

> The economics of info tech are REALLY good except in the official GDP numbers. Take Google, for example. The (economic) value that Google provides to me is far more than I pay for, which is zero. It's even far more than what Google makes from the ads it serves me. Google is capturing as revenue only a small fraction of the value it creates. That (and similar cases) are why much of the info tech economic/productivit…

Well, the official GDP numbers also don't count the value of sunshine and rainbows -- because that's not what they're created to measure. If you get a lot of value from something you pay nothing for, and it doesn't increase your job output in dollars and cents, then there's no reason it should increase GDP.

Sunshine and rainbows aren't produced by the economy. Google searches are, even though they are free.

If we're talking about how good the economy is, I'd argue that we should count all the good (and bad) that the economy is doing, not just the GDP.

Re: The Great Productivity Puzzle

#20

Post by greenmountin »

One approach to understanding low productivity that I find interesting is covered in Jason Furman's very readable "Is This Time Different? The Opportunities and Challenges of Artificial Intelligence" report [1] -- he's one of Obama's lead economists.

In short, productivity growth may be lagging because of AI etc; it's because people have to spend time retraining for jobs not obsoleted by new technologies. He briefly states his rejection of Gordon.

[1] https://www.whitehouse.gov/sites/default/files/page/files/20...

Post reply on HN