We’re in a productivity crisis, according to 52 years of data | Hacker News Reader

We’re in a productivity crisis, according to 52 years of data

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36 pointsPaul-Craft72 comments

I think comparing 1870-1970 period and 1970-onwards is a bit unfair.

We kind of know exactly why productivity exploded on n that period, and it is all to do with (later stages of) Industrial Revolution. All these people living on $1 / day suddenly started using machines providing power and automation. The cold water heated on fire was replaced by plumbing not by magic, but by availability of cheap pipes and boilers.

So basically, some time in 18th century, we figured out one trick, then milked it like crazy, and around 1970s we reaped most of the benefits of that one trick.

But now we're back to the pre-industrial revolution situation, where we are looking for various marginal improvements. Yes, there are other effects like rising inequality (so marginal improvements going to the owners not workers) but I don't see why you would extrapolate productivity growth from 1870-1970 and assume you can keep on achieving that.

Who knows, maybe AI will do that, multiplying human intelligence the way the steam engine multiplied human strength.

A big difference, though, is that since the 70's, rather than using our discoveries, out of fear of the consequences. The extent to which we harness energy is a strong proxy for overall productivity, and ever since nuclear got largely marginalized we've just been milking existing sources with diminishing returns. Starting roughly in the 70s.

I don't know, seems somewhat convincing on the surface but goes to mix some interesting ideas and facts with appeal to authority via quotes and a many unsubstantiated statements led by those ideas/aforementioned facts.

The one thing I always come back to is that nobody really seems to go into the definition of productivity - it's roughly hours worked to produce something, but the details are always sort of scarce, even from the FED.

I don't know, 1970 is also about where population growth started slowing.

1973 is also when we had the OPEC oil embargo and we went from a society arranging atoms to more of a focus on arranging bits / doing thought work. Before that productivity scaled with increased energy inputs. At least that's the argument I've heard Noah Smith make and it makes sense

To me, "WTF happened in 1971" has always been transparently obvious -- we moved off the gold standard.

I'm not a goldbug, I don't think we can put that genie back in the bottle. But with the ability to just create money out of nothing for free, without having to answer to some notion of conservation-of-whatever, is what re-appropriated a lot of human effort toward non-productive ends. That plus the rise of a debt-based society (driven by the banks' addiction to creating money, I mean, issuing loans) prepared the cultural and economic powerhouse that was the US and its effective vassal states in the West to move from primarily production to primarily consumption. In truth, the cultural shift began in the postwar boom and the advertisement and uptake of the proverbial "white-picket fence" lifestyle but was fully unleashed in the 70s.

I think it's probably one of the core causes, but trying to piece together how a barely noticed yet fundamental change in the technology that is money can cause all of these effects requires understanding money to an almost unreal level of depth. I'm still trying to figure out and wrap my head around it, but I think what they did had way more consequences than the architects of that decision realized, even deep cultural impacts, that, like many historical events, will only really be clearly understood in hindsight well into the future.

MMT perspectives, considered undogmatically, help a lot in this regard, as does the colloquialism that "money only has value because people believe it does". More or less everything follows from there.

What are “non productive ends”?

Why would we have to work only on “productive” ones. Maybe non productive ones in your sense still have positive benefits that help us achieve productive ones better?

If that were true our productivity would have increased...

You know that article took:

*We have this unprecedented 50x rise in manual work productivity between 1870 and 1970. Then, at the exact time you’d expect things to have another 50x boost because of the computer revolution, things start slowing down.*

Then run away with it "manual work productivity" - my question was also "what are productive ends" which was not addressed.

I call total BS on article and "productivity", because big scale construction might take more time and have higher cost but are we comparing the same things. Like bridges built 50 years ago are not the same built nowadays, processes are more complicated but we get better buildings with new materials and new ways of building.

The whole point of that site is to sell that narrative

You're right of course, but it does so quite indirectly, frequently leaning on 2nd- and beyond order effects like incarceration rates, physics degrees, etc. It is not straightforward to connect them if you've always been steeped in the narrative America tells about itself.

ok, then let's have an alternate pov

Today's productivity crisis is readily apparent to anyone who plays mmo phone games. There are always people on at work.

The crisis was there before that. I've seen many people do nothing work related for hours on end. It's a lot easier to hide it with instant messengers and browsers.

And finally, apparently one of the reasons construction has seen no net productivity gains is because regulations have grown more complex and expensive. I bet that's true of many industries...

> And finally, apparently one of the reasons construction has seen no net productivity gains is because regulations have grown more complex and expensive. I bet that's true of many industries...

Also, construction appears to heavily involve manual labour. I am prepared to be wrong, but are there robots on construction sites yet or are humans still manually stacking brick walls?

looking around online, yes there are robots. very very expensive looking robots like the Hadrian X and SAM100, both for stacking brick walls. but who is building full buildings with 100% brick these days*? we probably got more productivity gains when we stopped digging dirt manually.

My guess is that any tech like this coming out now is at the far right end of an S curve and the real gains are to be made politically and socially, though i doubt it's a regulation issue like the quote.

*turns out its australians.

haven't seen any bricking robots, yet.

thou ime construction has moved to prefabricated elements (import wall from factory) in order to cope with less skilled workers and higher labor costs while retaining some margin.

We've got a couple here in Western Australia building houses (at least two seperate designs):

https://www.youtube.com/watch?v=A6IQB5S1N5I (2019 - 4 years ago)

Mind you we (Uni of West Australia) built a sheep shearing robot back in 1980 and use robot trucks | trains | excavators to mine ~ 800 million tonnes of iron ore per year.

A friend of mine put it in terms of "boreout" and "burnout" jobs - I, for one, actually work all my hours and then some while he seems to only use 30-50% of his time on actual work.

I would like a boreout job.

Trust me you'd love to have one until you actually do get one.

Being imprisoned 40h/week with literally nothing to do and - depending on your work culture - being forbidden to do anything unrelated to work is by far one of the worst things for your mental health.

It's actually a known tactic to force workers to quit.

> It's actually a known tactic to force workers to quit.

whoever came up with that idea ...

srsly thou, while this scenario certainly can be soul crushing, i think that this is not the case for everyone or even most.

I do feel like the growth of bureaucracy is a massive drag on productivity.

Oh God, I just can't anymore.

Lifestyle choices are not the closest problem to reality.

The deepest problem is that the most capable people have already mentally committed to the status quo, to secure their own wealth.

New ideas are the most oppressed type of thought right now.

There's more to say... what's the point? Gov and Market are both moving against breathing room for new ideas.

You won't get productivity without the capacity to change the type of thing we are doing.

Yeeeeep, everything is framed in terms of the anti-science known as economics.

I think you're on the money with this one.

I'd like to hear your "more to say", the point is to share your ideas. If you want.

How is the productivity in the rest of the world outside the G7?

Worse, though some countries with lower productivity might have higher productivity growth.

But the problem with looking at it this way, is that it’s not a competition over finite outputs, it’s something that we can all get better at without taking away from each other. In fact one country’s growth usually helps other countries growth.

Coincides with the rise of the MBA

Private equity and corporate raiders, as well. You know, the people who were the inspiration for Gordon Gekko in Wall Street.

I wonder why the author considers war as negative to productivity when the ultra-productive century included two world wars. Isn’t destroying and rebuilding stuff good for GDP?

You are not the first to think that. That is called the Broken Window Fallacy, obviously by people who disagree. But it makes sense to me that if you spend resources on repairing damages, or weapons which don't generate more wealth, you are not investing and growing. What happened to the US in WW2 is an anomaly.

Well in war there's chance to have greater return than loss by pillaging your enemies. Not so much for those broken windows cases.

destroying and rebuilding stuff is good for GDP in classical Keynesian economics and most others based on that, but there have been criticisms that this leaves out the obvious part that there must be a negative side of the ledger indicating destroyed resources.

maybe the maintenance costs lead to a kind of forced deprecation and hence war is not that "expensive" anymore

sure from an accounting standpoint there must be depreciation of munitions, and battleships and all that stuff, but the ledger does not allow for destroyed and bombed out farmlands and so forth.

I'm pretty sure if this had been pointed out to Keynes he would have agreed but probably noted that it was not as easy to calculate that part.

No, not at all. Destroying something, well, destroys it. Rebuilding it then means you spent a lot of effort with nothing new to show for it. That’s the opposite of production.

But since you spent money on the rebuild, and money spent to make something shows up as economy, it looks positively productive.

I think your point and mine together is that the way we measure economy has some horrible problems. Is there any economic measure of destruction?

It's not productivity root cause, it is consumption crisis root cause. We stop buying buying more and more. Once you have one car, you don't buy hundred cars.

Or you just buy stuff which is mostly zero sum, such as more real estate or more services which simply have no productivity gains to be found as they are based on time/the human being human.

You see that here in Canada and in the USA. The amount of dwelling space we occupy has soared even as families shrink. My Dad grew up with a family of 5 in 1200 sqft. Canadians today consider that a shoebox that barely fits 2.

I would bet that income gains are disproportionately directed to buying more house or additional houses, no matter the income.

Or you buy more massages or more tutoring or more other various services that simply cannot be multiplied 100x as the human is an integral part of the service rather than a stand in until the robot is ready. How does a massage therapist massage 100 people at once?

But that's not what we are talking about here. We are talking largely about innovation, the productivity boom was the period people went from horses to cars. Selling shiny new things to replace the same things with a patina and calling it productivity is like breaking windows to fix them and calling that productivity. So you expect to see a plateau in truly productive car manufacture for example (that manufacturers hope to squeeze revenue beyond with unproductive manufacture, such as planned obsolescence, things that can't be sold on the secondary market, etc) but you don't expect to see an overall plateau of productivity unless 1) innovation is stifled or 2) everything that people could possibly need or want has been invented. I don't think the latter is true.

Tell this to the advertising algorithms that want to always advertise whatever I've most recently purchased.

Once you have one ergo keyboard you don't buy a hundred ergo keyboards.

looks at desk

......fuck

Humans are deeply weird...

We might simply be a society in decline. Bureaucracy, Idiocracy, Cleotocracy all effect productivity negatively - and they're all present to various degrees around the world.

We have bullshit jobs, virtual economies, ideological education, inept politicians, and a shrinking IQ. So what else is supposed to happen to productivity.

The only possible improvement is in energy, where the incredible cheapness of PV and battery storage might massively drive down energy prices over the next decades. But even then, it's notably not the complex and marvelous nuclear power that would save the day, but a cheap mass-produced good made mostly from sand.

> but a cheap mass-produced good made mostly from sand.

So? Making that cheap mass produced good is a productivity increase.

GDP == kWh

"We" being the USA, for anyone playing along at home, not super interesting on a global scale.

Lots of words, few insights. TLDR: not productive? Just be productive!

Word of advice: If you want me to read the article, don't put 3(!) paragraphs in front of it that sell somthing related to the article, even if it is only advice. Sell me something halfway or at the end: If I still read your text, we're good.

So instead you got a snarky comment and I didn't read your article because my time is precious, no matter if you wrote a "blockbuster" ...

Spoiler: He did not write a blockbuster.

In 1971 Nixon effectively moved the economy off Bretton woods to fiat. The monetary system became entirely ephemeral, enabling all kinds of mathematical techniques for deflating the average persons buying power:

https://en.wikipedia.org/wiki/Nixon_shock

Couple that with an explosion in TV ownership, behavioral economics taking over advertising and marketing... America became a propaganda bubble.

A $200k/year salary in 1980 dollars would be equivalent to $600k/year buying power in 2023. Instead the Fed is raising rates to unemploy people, so they cannot buy assets, or even just a home.

The thing to remember, though, is that Nixon did this while dealing with the fact that the Eurodollar system had already been pumping up the money supply; his move was mostly just to avoid handing out all the gold which was already minimal relative to overall monetary supply.

Bretton Woods was doomed from the start in a world where independent offshore banks were free to create ledger money and settle up with each other however they like like, but meanwhile the Treasury had the obligation to settle in gold.

Yellow journalism was a thing before television existed.

The author seems to have his own medium-inspired productivity crisis, taking 20 words to do the work of one.

500 hours to produce one article is roughly 10 hours a week for a year. 60 hours just to write it (2 hours a day for a month! wow), I guess the rest was in research. I didn't see a whole lot of deep insight, mostly just listing facts and attempting to string a narrative through them based on best-faith (and ultimately naive) interpretations.

this sum's it up quite nicely

Sounds like a big issue, better make a Jira ticket for it to get prioritized later.

To sum it up:

1) in 1971 economy gains decoupled from compensation - worker gains lag overall gains

2) productivity increases declined compared to the decades before

3) inequality correlates with the rise in desire for a radical change, revolution, communism and other bad things

Author's conclusion: we must declare a state of emergency to raise productivity.

What?! It also quotes Peter Thiel for good measure, that we were promised flying cars and got 140 characters. Gee whiz, Mr. Billionaire Investor, maybe you should've invested in flying cars, and not Facebook or profiting from people's personal data.

What an appalling article.

Pretty much text for: "the people want their share on the productivity gains"

Seems like the workers do the actual work and not the management like they told us the last couple of decades to justify all the high salaries and bonuses.

> Pretty much text for: "the people want their share on the productivity gains"

Yeah, it annoys me that many "productivity" metrics are often "how much the employer gets for how much the employer spends". (And not, as some readers might assume, a measure of metaphysical efficiency, something that tracks how good our civilization is doing against a hostile and entropic universe.)

If an employee does +1% more work in the office after being forced to spend +15% more hours (ones the employer does not pay for) sitting in rush-hour traffic: "Productivity is up! Everybody rejoice!"

Months later when those employees are fed-up and demand higher wages for non-remote work because the commute stinks: "Oh god no, Productivity has dropped! This is a crisis that must be fixed!"

Productivity is typically measured in GDP, a metric which can be gamed.

If I spend a day doing my garden and my neighbour spends a day painting his kitchen, nothing is added to GDP

If I pay my neighbour to do my garden and he pays me to do my kitchen then GDP increases.

If I work longer and spend that money on child care that increases GDP but not quality of life.

The metrics as they are make sense. What perhaps should be fought over is whether or not employees should more commonly have an equity stake in the operation of the company, such that those overall gains do get realized by those doing the labor.

There are tiers of attachment when it comes to labor. I think most would agree that a freelancer has no claim to share in the profits of a company they do some work for, and most would also agree that someone who has put forward capital that allows the company to exist in the first place also deserves a return on it. The point of disagreement seems to be at what point an employee is an integral enough part of the operation such that their compensation should be linked with the overall performance of the company.

Some companies handle this well enough, others abysmally.

It is a bit more subtle than that though, in a literal and practical sense almost all the work is done by fossil fuels. There are a lot of interesting real-world correlations on the classic wtfhappened site [0] that are more than likely linked to a sudden slam-the-breaks because oil availability became the bottleneck as production shifted from exponential to linear growth [1].

Then the response to that was the famous decoupling of money and the physical world by Nixon combined with a growing belief that control of the government and attacking political opponents is the path to prosperity.

It'd be fairer to go back to economic fundamentals and reward people based on labour rather than the current policies in the west of printing money and handing it to asset owners. I own enough assets to make do whether we do this the fair way or not, but what we're doing to hard workers is a travesty.

[0] https://wtfhappenedin1971.com/

[1] https://ourworldindata.org/grapher/oil-production-by-country...

But... that's the idea behind communism!

I know you're being glib, I just wish everyone would calm down about communism and capitalism. They're both useful but flawed ideologies and if there's one thing that the last century should have taught us, humans are not good at instituting either extreme. What we do have evidence to suggest is that taking the useful parts of both seems to work well.

From an historical point of view, we know what we need to do, we just get wrapped up in ideological wars. Regulate markets up to, but not past, the point where they're not winner take all, companies aren't hurting workers and we're not destroying the environment. Provide social safety nets, healthcare, and tax preparation so small businesses can focus on building useful things instead of spending all their time with overhead tasks and individuals can take risks without fear of destitution. Finally, and most importantly, heavily tax the 0.1% and get rid of corporate influence in public policy so we don't end up going back to....this.

Was life ever like this? and if so, is it a failure of that life that it devolved into... this? and if not, how would you get there? These are facetious, here is my point:

You're drowning in ideology while decrying ideological wars because you have decided the way things should be, outlined that this would be a shared vision of all (if only they were as clear-headed as you), that this way would never ever devolve, and provide no path for getting there and hope no one asks. it's magical realism!

Yes and no (I know, way to narrow it down).

On one hand, yeah, that aligns with a vaguely socialist ideology and maybe some other stuff. It has some of my biases in it, particularly in terms of what our current problems actually are (a secular lack of fiscal equality), and that's very much up for debate. There are a lot of social and racial issues that also contribute to our problems, but...

On the other hand, this is the blueprint for the nations that currently have the lowest inequality and highest social mobility. Yeah, this reflects ideology, but at some point we have to actually pick something and picking something that's currently working isn't particularly ideological. Just because it happens to align with ideologies doesn't mean it's ideologically driven. Literally any solution will align with some random ideology.

I appreciate your followup but this ideology isn't random alignment. it's just a kinder, softer version of the dominant ideology. how do you think the 0.1% of a given "good" country gets all that money to tax? from resource and wealth extraction from the "poor" countries! Even presuming we should have a 0.1% to tax (instead of treating them like the french aristocracy, for example) is an ideological position. It's capitalism.

Fwiw, these were my biases too and then I think I just got jaded that you can't stay here. Ignoring the first world / western chauvinism at play, we could get there but i think even these "nice" countries are all going to backslide if, idk, we run out of computer chips, the global extraction economy fully shifts to China, or the IMF decides to punish them like they did Greece.

Communism is not a "useful but flawed" ideology.

Communism is deliberate fraud.

Read Marx on the Labour Theory of Value, and watch as he twists the definitions of words until he hits upon the desired outcome.

And all of socialism is built about that lie.

> Read Marx on the Labour Theory of Value, and watch as he twists the definitions of words until he hits upon the desired outcome.

Yeah, any attempt to ground a normative proposition in objective fact is inherently flawed. But the is/ought distinction and its impact in that regard, while written about at the time Marx wrote, was far from as widely accepted as it would later become at the time (and people of all ideologies still have problems with it today.)

But that doesn't prove Communism is a "deliberate fraud", or even a flawed ideology; at most it proves that Marx's writings on Communism make a fundamental error that mistakes it for an objective scientific fact when it is, in fact, an ideology (the two being in separate domains, but the attempts at constructing objective supports for ideological positions, both backward from an ideology that was assumed to be correct and forward from perceived facts were a systemic misguided pursuit of the philosophy that hadn't really dropped off all that much by the early 19th century.)

> And all of socialism is built about that lie.

No, its not. Socialism is much older than the Marx and the LTV, the LTV was part of an attempt to scientifically ground socialist ideology, as part of a wider systematicization of the ideology.

> If you don't work, you don't eat.

Oh no....

You probably would also call Adam Smith, Ricardo and all classic economists a fraud? Labour Theory of Value is at the core of classical economy, all these authors assumed the theory, Marx did not create it. Marx theory built on top of it, and solved several paradoxes known in the theory at the time.

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