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  • What Productivity Really Means

    A recent Heritage post responded to an article in The New York Times that suggested we be less productive. One comment challenged our rebuttal:

    The takeaway you should have gotten is that we are so addicted to the concept of efficiency that we forget that in some instances being more “productive” actually hurts us rather than helps us. Do we really want to maximize the amount of patients one doctor can see in a day or cram as many kids as we can into one classroom? That might make us superficially more “efficient”, but does having a poorly educated, sicker society actually make us better off?

    This comment demonstrates a misunderstanding of how productivity gains contribute to an economy and a lack of awareness of what productivity gains have provided throughout human history. More fundamentally, it demonstrates confusion as to what productivity itself means.

    There’s no reason that productivity gains need to mean cramming in as many patients as possible in one day or jamming more kids into a classroom. Rather, productivity increases mean quite the opposite.

    Productivity gains accrue when one can accomplish a task better using the same amount of resources or less. Notice the emphasis on accomplishing the task: The task for a doctor is not to see patients; it is to help those patients. The task for a teacher is not simply to lecture at lots of kids; it is to teach kids.

    When a doctor can provide better care using the same amount of resources, that’s a productivity gain. If a doctor can effectively treat more patients because of technology with the same or better care, it reflects a productivity gain.

    Consider the improvements in pharmaceuticals, medical equipment, and medical techniques, all of which have immensely increased productivity. In medicine today, medical scans catch cancers at early stages, doctors increasingly track medical information on computers rather than wasting time wading through mounds of papers and file folders, and patients receive treatments that are less time consuming and less painful, and they often have much higher success rates.

    Improving productivity should be the goal of economic policy. Not making it so would ultimately hurt all of us.

    Posted in Featured [slideshow_deploy]

    6 Responses to What Productivity Really Means

    1. mrbenz7 says:

      Very good rebuttal! Productivity is providing better products and services at a lower cost while expanding further into the marketpace lowering coats at the same time! This is the problem with the Liberal left! They fail to grasp the very fundamentals of productivity and somehow busieness ends up being bad. We need a serious re-education of our nation!

    2. directorblue says:

      David, we are dealing with complete economic illiterates here. When we have a president who demonizes ATMs and other forms of automation, not realizing the entire ecosystem of companies and industries that arise as a result, it means only one thing.

      We have to vote these intellectual lightweights out in November if this Republic is to survive.

    3. Ray T says:

      The only way to put a stop to the kind of "productivity" the Times author and the commenter are thinking of is for the consumer to demand higher quality. They are missing the more salient point that their beliefs are now held from the comfort of their very efficient lives – their light-speed internet connection, their nearly flawless performing cell phone, and the 24-hour grocery store down the street selling very, very cheap food. And so on, and so on. All of that is made possible to the extreme degree that we have it because of a fanatical push in the corporate world to squeeze every cent out of an ounce of raw material or an hour of labor.

      They erroneously believe that the absurd plan proposed in the original article would not degrade and eventually destroy the standard of living they now enjoy.

      Now I work in management for a big plastics company, and we're pushed by our customers to squeeze out every cent. The wall thickness on every product is pushed to the limit of its structural integrity, and if you haven't noticed yet, 8oz yogurt cups used to be the norm, but now 6oz cups are, and the price didn't go down. And many etc's to those examples. But if people complain enough about the flimsy containers that buckle or split from even slight impacts, or whatever, then the market will listen, and productivity as they are perceiving it will slow down – in a sense – in order to produce a better product.

      But when these same people complain about such things, but then go shopping for the cheapest yogurt, and the cheapest pair of shoes, etc, then they are fueling the very problem they claim to be so convicted over.

    4. Carol, AZ says:

      American genus for research and development_ goods and services and marketing them_ changed the world.
      Without productivity the market doesn't exist.
      The sheer laziness of our leadership_ has damaged and discourage the keystone_ that defines our creativity and imagination_ refining what America represents.
      The new approach_ is flooding our market with cheap unusable product_installing Acorn style programs_, and issuing food stamps.
      No one speaks about a solution_how to put people back to work_ and also encouraging productivity.
      Productivity is the is the genesis of American free enterprise and free market system.

    5. Jim, CT says:

      The number of both Republicans and Democrats who have told me that technological advancements contribute to unemployment is astonishing. It's like they've all read "Brave New World" and are convinced it's a good idea.

    6. Bobbie says:

      Media mindsets and members of the democratic party have been educated to speak to mislead using irrationalities. "Productivity" is a positive word and what draws negativity into productivity obviously kills the positive that deforms "productivity" into "inefficiency." Pray for people to learn the truth to see, hear and know the media / government truth and their high pay to corrupt the public mindset…

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