The Great Productivity Puzzle

I might be misunderstanding your parent's comment but I think the question wasn't, "why are people still doing their work from offices?" and more, "what are all those people in offices still working on?" There's a lot of work that feels like it should have been automated out of existence and yet there are still lots of people working on it.

> We're about to see millions of human roles vaporize when automated driving hits home. This isn't like the dishwasher or desktop calculator. We've already seen self checkout stations. How long until whole stores are automated? Eg: http://newatlas.com/go/5028

12 years ago 4 of these shops opened in my university town. All are now broke/discontinued. They were expensive, difficult, slow, ... generally not usable except perhaps for using them as a coke machine. I do think there are ways to get it fixed but no way the current batch of designs is going to take over from convenience stores.

> Bullshit as well. Hardware is rapidly approaching free as services dominate. Plus most of our readers shift capex to opex by cloud hosting, for example. Furthermore, offshoring and free trade means you won't invest in equipment because you're not even making the widgets any more, in house.

Note that from a purely financial point of view, shifting capex to opex is usually a bad deal. Think sell and lease-back services. In the financial department, absent short term thinking (heh), there should be a big break on this behavior.

> Mostly irrelevant when "instant gratification isn't fast enough". Our kids can't even be bothered to microwave something in 30 sec, so prepackaged convenience, dominates households.

I hadn't thought of it like that yet. But come to think of it, you're right.

> Finally, what does corporate malfeasance (eg VW emissions, banking crisis, LIBOR fraud etc) do to productivity?

When they don't get caught, it increases it. Until it becomes so pervasive as to destroy trust in the system. Then it crashes to zero. That is why there is significantly more tolerance towards it when there are huge problems (think 2009-2010), as fixing it would cause more damage. Sadly clearly some management folks have realized this.

> infotech entertainment addiction

Those are things being sold, that people want. How is this anything but a large positive for the economy ?

Google searches are in no way free. Businesses pay for them in ad spend. Governments pay for them in lost tax revenue and opportunity costs lost through decisions influenced by Google's lobbying.

These are indirect costs, but they still have an overall economic effect.

You could argue - perhaps with some justification - that the net value generated by Google search is more than the net economic costs. That would be an interesting thing to try to estimate, and so far as I know no one has attempted it.

But that just highlights the underlying problem, which is that most mainstream economic models are completely unfit for purpose.

We're trying to run a 21st century economy using banking systems that haven't changed in principle since the 15th century, and econometrics that have barely evolved since the 19th century.

And all of that happens with a huge political bias that overestimates the value of some activities - including speculation, and other forms of wealth capture - and underestimates the value of authentic wealth generation.

In fact no one knows how well the economy is doing, because we barely have any idea what an economy is - certainly not in 21st century terms, where "the economy" is clearly a global pattern of resource flows, innovation, and future potential, not just an epiphenomenon of national or corporate accounting.

Not calculating GDP correctly is a tiny symptom of that. A full solution is probably going to need a complete reinvention of the entire field.

There is something radically wrong with how they measure productivity. I don't know what it is, but the details matter.

I remember the first verse of this song, back in the '90s when economists were wondering if information technology was a productivity sink. All of this new fun stuff was everywhere, but productivity measurements were going down. At the same time, just-in-time inventory management was acknowledged as the greatest innovation since sliced bread---and you can't do that without information technology. And the changes since then have only made IT more central and that has reduced the friction to do essentially everything else.