For those of you who don't follow such things, there was an interesting piece this morning on CNBC about the government's measurement of productivity gains due to computers. Know how they measure it? By gains in computational power! Like, all computers are is giant adding machines.
This is like measuring productivity gains after the invention of the printing press by measuring how many pages a press could print in an hour. Or calculating productivity gains from the telephone by measuring improvements in voice quality. By an overwhelming margin, the primary contribution computers make to productivity, of course, is through their connectivity.
In the 1980s (and maybe still, who knows?), the government measured the value of software being shipped overseas, among other items used to calculate the trade deficit, by putting them on a scale and weighing them, then calculating their value as a plastic export. For nearly two decades, the government has recorded declining productivity in the banking industry, because of the loopy way they measure it. Clearly, ATMs and other advances have improved bank productivity enormously, but you wouldn't know it from government figures.
This shows you just how clueless government bureaucrats are, and how dangerous it is to base any investments or other types of decision-making at all on government figures. |
