Comments for Thomas Edsall’s Productivity Fears at http://www.cepr.net , comment 1 to 18 out of 18 comments http://www.cepr.net Fri, 24 May 2013 00:21:00 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19633 There are an amazing number of quality of life improvements that come with a reduced work week. When California state workers were on 3-day-a-month furloughs, people wrote about the pay reduction (15%) that came along with it, but they wrote more about what they were doing with the time--engaging in a hobby, having less-stressed errand days, volunteering at their kids' schools, working at the food bank, etc. If we could do that without the reduction in pay, the happiness quotient would be much higher. In fact, when they ended the furloughs, many people started taking vacation days so that they could continue their happiness-increasing activities. - PeonInChief Tue, 16 Oct 2012 05:50:03 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19631 Even if the energy and global warming problems are solved - and there is no guarantee whatsoever that they could be, or especially that private enterprise could do it - we are still faced with the problem of increasing population. Resources apart from energy are limited, and there is no law of economics (or of biology) that says population will be stabilized at a level which allows a high standard of living. In fact Malthus claimed to demonstrate that the equilibrium level would be poverty. That the world, at least in developed countries, is not now Malthusian is probably owing to the boost from fossil fuels. The boost from replacing human labor with machines will come to an end no matter where the energy comes from. The limiting factor will be population versus resources, not technology. - skeptonomist Tue, 16 Oct 2012 04:18:42 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19627 Dean, I read the linked article. These guys are pessimistic about the future of middle class lifestyle, to the point of absurdity. I don't think they understand that even if productivity GROWTH declines, that living standards will still rise, albeit more slowly. I think that is a critical flaw - they simply don't have an intuitive grasp of math. Well, the beltway all got taken in by Ryan, because they don't know Arithmetic. So, it shouldn't be surprising that the beltway (and many economists, apparently) don't know Math. And the idea that it is inevitable that the middle class should get an ever smaller piece of pie, even as the pie itself continues to grow, is just Ugly.  (Their pessimism implies, not just that the middle class gets a *proportionally* smaller piece, but an *actually* smaller piece in absolute size). Of course, the other points are well taken, but I don't think these guys really understand that a slowdown in productivity GROWTH, does not mean a shrinking pie. - A Populist Tue, 16 Oct 2012 02:11:33 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19619 Didn't the slowdown in productivity in 1973 derive from the oil shock? In 2010 dollars, oil went from about $15/barrel to about $45/barrel. - Ron R Mon, 15 Oct 2012 15:04:14 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19618 @duck, you would probably agree that global warming (or rather its response) is very much much an economic matter: 1) How will the economy be managed optimally so as to free up to resources to pay for changes in technology and infrastructure and a host of social adjustments. 2) How will it this be done fairly so that there will be a democratic consensus and solidarity behind an epochal challenge. Here's the thing, if we can't get the powers that be to rely on textbook econ to manage the current recession optimally and fairly, a much smaller problem, how we can expect them to deal with the mega-crisis? Hopefully (maybe pollyannishly) there will be political lessons learned from the "small" crisis to the mega one. - paul Mon, 15 Oct 2012 14:25:50 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19617 I wish Baker (and Krugman) would provide an answer to this crucial question: Aren't the general policies they advocate ignoring the threat to human life posed by our economic system? Even if tomorrow we adopted all Baker's recommendations -- Keynesian-style stimulus, patent reform, stricter regulation of the financial sector, progressive taxation, more real competition among doctors and other professionals, and so on -- we would STILL be rushing headlong toward the doom of global warming. Instead of spending so much time skewering imbeciles like David Brooks and Thomas Friedman, why not engage in this more serious discourse? - duckmonkey Mon, 15 Oct 2012 12:44:16 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19616 In response to those who think Dean is confusing living standards and GDP - increase health and life expectancy has been documented to increase GDP. And prioritizing GDP over health and life expectancy is foolish in any case. Incidentally, even without technical breakthroughs there are huge opportunities for energy efficiency, renewable energy, low input agriculture and so on. One side effect of all of this would be cleaner air and better health, both of which have been shown to increase productivity. And we could phase out over 95% of fossil fuel use with today's technology. Depending on how much efficiency we implemented this might not even have a gross cost compared to fossil fuels. But when we consider positive economic externalities from replacing fossil fuels with less polluting alternatives, GDP would be higher than under a continued fossil fuel scenario, and more reasonable measures of well-being than GDP would show even better gains. You can find out more about this at my book site: solvingtheclimatecrisis.com - Gar Lipow Mon, 15 Oct 2012 11:22:03 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19615 If innovation is one of the main drivers and engines of growth, a few questions. It is hard to believe that it peaked, but is there a couple of factors that is hampering major technological changes. First, many of the innovations were fueled by government actions and spending. That for the most part has stopped except for some military spending. There are a number of risky and costly steps for an innovation to become marketable, and the early stages are too risky for venture capitalist or the private sector. Thus many stay in the 'garage". Other governments seem to help with these stages, as this country once did. No doubt that corporations do not like competition, and if something comes out that threatens their territory and markets, they find ways to kill or buy it and then kill it. If these are all true to a large degree, then isn't the technological problem present day economic practices, which may take political remedies to address. - geojos Mon, 15 Oct 2012 09:40:11 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19614 [quote] Medical Procedure USA Colombia Costa Rica Heart Bypass$144,000$14,802$25,000 Angioplasty $57,000 $4,500 $13,000 Heart Valve Replacement$170,000$18,000$30,000 Hip Replacement $50,000 $6,500 $12,500 Hip Resurfacing$50,000$10,500$12,500 Knee Replacement $50,000 $6,500 $11,500 Spinal Fusion$100,000N/A$11,500 Dental Implant $2,800 $1,750 $900 Lap Band$30,000$9,900$8,500 Breast Implants $10,000 $2,500 $3,800 Rhinoplasty$8,000$2,500$4,500 Face Lift $15,000 $5,000 $6,000 Hysterectomy$15,000N/A$5,700 Gastric Sleeve $28,700 $7,200 $10,500 Gastric Bypass$32,972$9,900$12,500 Liposuction $9,000 $2,500 $3,900 Tummy Tuck$9,750$3,500$5,300 Lasik (both eyes) $4,400 $2,000 $1,800 Cornea (both eyes)N/AN/A$4,200 Retina N/A N/A $4,500 IVF TreatmentN/AN/A$2,800[/quote] This was pulled from one company's website. Will they accept vouchers? - David Mon, 15 Oct 2012 09:31:34 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19613 With vast capital/labor disparities, productivity will (likely) continue to grow on a global scale as labor and capital are matched better, either through relaxed immigration laws, or improved property rights overseas. Global GDP will rise rapidly...a lot of the gains will go to capital, which is the scarcest resource. This will likely mean increased (global) inequality along with reduced poverty. - pete Mon, 15 Oct 2012 09:16:27 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19612 The Time magazine econ columnist wrote about this too. The mainstream media/academic economists were wrong about financial deregulation and the housing bubble so why shouldn't they be wrong about this also? - Peter K. Mon, 15 Oct 2012 09:00:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19611 We all have a notion of the meaning of "productivity" as we us that term in our everyday work. But what do economists mean by "productivity"? And what are the units? When I read both the Thomas Edsall piece this morning and Dean's reply, I realized that both assumed a definition for "productivity" and neither expressly stated that definition. Are we talking about GDP per capita? Are we talking GDP per hours worked? How would economists measure and compare the "productivity" of a police officer, a Wall Street trader, a toolmaker and an engineer? If you really understood the economists use of "productivity", would you view Gordon's ideas differently? - Ron Alley Mon, 15 Oct 2012 08:49:20 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19610 Humanity will be forced to find different ways to power society; it seems likely that these will be better ways, laying the groundwork for at least one more round of productivity gains. - Jim Naureckas Mon, 15 Oct 2012 07:57:46 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19609 The point that the US spends more on health care to get less than other developed nations, and that the US could adopt policies to correct that, highlights composition as a source of productivity improvement. By shifting resources from a low-productivity sector to a higher-productivity sector, overall productivity (and presumably, overall welfare) can rise without new technological miracles. Of course, one way of doing that would be to shed resources from the insurance and medical paperwork sectors. Or from finance. Or lobbying. Beyond that, Dean seems to be slipping back and forth from productivity to living standards and longevity. It may be true that we can live longer and more healthily with changes to behavior and to our medical culture, but longer life does not, by itself, improve overall living standards in a given period of time - however much it may improve things for those alive and well who would have been sick or dead. That $250,000 in welfare that could come from living longer is not the result of more output per hour, but of more hours of life. It's reasonable to argue that the right goal is a good standard of living, and that productivity is merely an element in producing that good standard. That should not lead to confusion between living standards and productivity. Gordon argued that innovation is likely to slow, and with it, productivity. A welfare improvement due to longer life would be, as it is said in the jargon, orthogonal to Gordon's point. - kharris Mon, 15 Oct 2012 07:14:26 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19608 The reference post from Roger Pielke's website claims that the supporting data in Gordon's paper is wrong and he will not publish a correction. [url]http://rogerpielkejr.blogspot.com/2012/10/gordon-vs-gordon-on-growth.html[/url] This is a widely quoted paper and I think the quality of the data should be verified. - AlanInAZ Mon, 15 Oct 2012 07:00:27 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19607 Productivity gains over the last 300 years or so have been largely driven by the replacement of human and animal power by machines driven by fossil fuels, and refinement of those machines. These fuels will eventually run out even if they can continue to be used, so unless replacements are found there could be a disastrous reversal in productivity. These effects could easily be felt within a hundred years. Those who have irrational faith in the the powers of the (modified) free market may think that cap and trade will solve the problem, but there is no guarantee of that at all. The sorts of things that economists worry about within the context of typical "free-market" economies may be largely irrelevant with respect to the problems of the future source of energy and global warming. - skeptonomist Mon, 15 Oct 2012 06:59:14 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19606 The financial sector's share of the economy has roughly doubled over the past couple of decades with little besides increased economic instability and concentration of wealth to show for it. With little need of anything besides broadband access for most financial transactions, fees and the percentage of GDP going to the financial sector should be dramatically shrinking. 4% less GDP going to the financial sector should be a reasonable goal. The current class action lawsuit regarding the monopoly practices of credit card swipe fees is a good example of how we're collectively being extorted by the financial sector. - Robert Salzberg Mon, 15 Oct 2012 06:33:40 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/thomas-edsalls-productivity-fears#comment-19604 I'll take your word for it that Gordan is a good economist, but I feel like his report has been the go-to piece for fear mongering among econ journalists. Martin Wolfe, who usually knows better, wrote a column about the study a couple weeks ago and got thoroughly rebuffed from several respondents. Thanks for taking a few swipes at Gordan's conclusions--the more the better. I particularly liked the point about the resources and productivity lost because of our absurd incarceration rate. Hadn't seen that argument before, but it's a good one. - David M Mon, 15 Oct 2012 06:19:41 +0100