Comment by wobbleblob | Hacker News Reader

Comment by wobbleblob | Hacker News Reader

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> "though the United States is an outlier here, working both long and hard"

The article conflates productivity with 'working hard'. Productivity is a measure of how much value is produced ('money is made') per hour of work.

A bulldozer operator working an 8 hour day to move a few tons of dirt is more productive than a worker who needs many 12 hour work days to move the same amount of dirt with a shovel and wheelbarrow. A trader at a bank who moves millions of shares with a phone call and a few mouse clicks is more productive than the bulldozer operator. Does this mean the banker works hardest and the guy with the shovel the least hard?

A high productivity per hour in a country means fewer ditches are dug using shovels, and more credit default swaps are sold. It doesn't mean people are working harder. It also doesn't necessarily mean the shovel digging country is organizing its economy less efficiently. Where the cost of labor is a few dollar per day, investing in a bulldozer might never pay off. Hiring 100 guys with shovels and wheelbarrows could be more efficient than hiring one guy with a bulldozer.

I fear you're also conflating two things: money made and actual value produced.

Suppose the trader is selling credit default swaps and helping cause a big financial crash, or the bulldozer operator is destroying acres of forest to clear the way for a tobacco plantation. What they do may be very valuable to the people paying them (and hence, if they're lucky, lucrative for them personally) but have substantially negative net value by any reasonable measure.

So "amount of hard work" is at two removes from what (I think) really matters, namely amount of actual value produced.

> I fear you're also conflating two things: money made and actual value produced.

The problem is that the definition of "actual value" turns out to be devilishly difficult to pin down. There's no objective measure for it. Value is subjective.

This is one of the central riddles of economics. But it's also why exchanges happen at all.

So can the guy with the shovel.

Ultimately, the concept of "actual value" can be defined as one of two things: money (for things that have value for an individual) and laws (for things that have value for the society, e.g. externalities). Simply said, the society values certain things (short-term profit, growth, cars, cheap food, human lives) more than others (long-term stability, the environment, clean air, rainforest, empty space). These sentiments change, but they change slowly, because we live in a democracy (and because people value social/cultural stability and safety).

As far as the financial crisis is concerned, it's easy to say after the fact. Was Einstein's research net-negatively-valuable, because it resulted in the atomic bomb, or was it net-negatively-valuable, because it ended the war? Whenever there is innovation, there is a risk of the innovation resulting in something "bad". That doesn't mean that the value of research is negative. People are simply short-sighted and/or not smart enough to foresee bad consequences. Btw, I'm sure you're doing the same thing - consuming cheap electronic devices produced using non-recyclable rare resources by workers whose raising wages will (1) significantly increase pollution and (2) significantly increase their quality of life. Is that "good" or "bad"?

Economists have long accepted that individuals and society have vary different short term costs and bennifits for the same activity. Abstractly it's the basis for having governments in the first place. But that's a long way from saying laws directly account for all known externality's.

http://en.wikipedia.org/wiki/Externality

For the avoidance of doubt, I wasn't attempting to say that traders and bulldozer drivers are bad people or that their jobs are bad in themselves. Sometimes traders bring about financial crises, but more often they keep the markets doing their (important) job efficiently. Sometimes bulldozer operators destroy beautiful or valuable things for someone's short-term gain, but more often they clear things out of the way so that newer better things can take their place. And, yes, sometimes people do things with terrible consequences even though they're sincerely and skilfully attempting to do the best they can -- though in the case of those credit default swaps that might be a difficult position to argue.

My point was narrower: Unless you choose to define the value of an activity to be what someone gets paid for doing it, you will find that those two things diverge, sometimes badly. So measures of productivity (e.g., GDP) that just count how much people get paid are, at best, going to do a very imperfect job of capturing anyone's idea of what's worth while. Most likely there will be large systematic disagreements.

> So can the guy with the shovel.

I was going to suggest a guy with a 50ct lighter and a jerrycan of gas, who is probably a more imminent threat to forests than the bulldozer operator.

> but have substantially negative net value by any reasonable measure.

if we were to go by entropy measures there is nothing we can do about it .

So what is of value?

+100

They probably chose a poor word ("hard") for high productivity, but apart from that the point is sound: The US works a long longer hours with fewer holidays than many European countries.

And there's good reason to believe that the results/hour coefficient is lower for each individual worker regardless, when the "hour" part of the equation is higher.

In general, the poor work both 'harder' (physically) and longer hours than the rich. It's just the way it is. Time off is a luxury.

The supposedly lazy Greeks and Italians work far more hours per year than the supposedly industrious Germans and Dutch, but not as much as sweatshop workers in Bangladesh.

In most (all?) Scandinavian countries, time off is not a luxury. It is a right, awarded to every working man and woman, guarded by law and regulations.

Which is actually quite ironic - when you are freezing for eight months a year, time off is not a luxury at all - it is a life-and-death matter. You'd think that we'd have developed a much greater culture for very hard work than the Americans, but things have for some reason gone the other direction.

Why does the rest of the world end up with such crap politics? What are you doing right in Scandinavia?

In my opinion, Scandinavia's good social policies comes from generations of dying of cold and hunger if you didn't occasionally get help from your neighbor. There is a spirit of cooperation with no expectation of being paid back, which has grown into the current system. External commentators will sometimes say that a system like this only works when you have a very homogenous society, but many of these cultures were quite isolated until the modern age, e.g. nestled in a tiny community in a valley somewhere, with only rare journeys outside. The equality principles have as far as I know only existed since the 1960s. (Note that I am speaking from a Norwegian perspective).

A lot of people forget that large parts of Norway, Sweden and Finland were dirt poor as late as the 1930s. These are very harsh climates to live in if you don't have trade and modern technology.

Because unlike Scandinavia, they aren't dying civilizations with net negative fertility.

Actually all of the Scandinavian countries have fertility rates of < 2 births per woman...

So Scandinavian eugenics programs don't count as "crap politics"? Look, every part of the world currently has something wrong with it. I was just as shocked to find this as everyone reading this:

http://www.economist.com/node/155244 http://en.wikipedia.org/wiki/Compulsory_sterilisation_in_Swe...

> results/hour coefficient

I think maybe we can make a bold move and call that metric 'efficiency'.

I had a boss once who had done the same role in SV and in a subsidiary of BT (which still has a lot of civil service type rules extra privilege holidays)

His comment when asked was he got as much work out of the teams in the usa who had 2 weeks annual leave as he did in the uk with the team having 5 weeks holiday.

> Productivity is a measure of how much value is produced ('money is made') per hour of work. [..] A trader at a bank who moves millions of shares with a phone call and a few mouse clicks is more productive than the bulldozer operator. [..] A high productivity per hour in a country means fewer ditches are dug using shovels, and more credit default swaps are sold.

When you say "value is produced", you seem to be conflating two concepts, how much value is captured by an individual/firm, and how much value is created for the whole economy.

When bankers make lots of money for themselves and their employers, are they creating wealth for the economy, or are they merely participating in a zero-sum game where their gain is someone else's loss? I expect it's a combination of the two.

Value is in the eye of the beholder. Determining how much value one creates is inherently a value judgement.

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