It is incorrect to say rising productivity creates jobs. What is correct to say is that it creates higher income, on average. If the average worker in country X has five times the average income of workers in country Y, it is safe to say that given the capital, education, raw materials, intellectual property, infrastructure available to workers in country A they are, on average, five times as productive as workers in country B.
Rising incomes and increasing wealth are the natural outcomes of rising productivity. This is a basic economic truth and the reason behind why one country is poor while another is wealthy, differences in productivity.
This is pure horseshit IMO.
Proof is in a simple analogy.
Assume 100% productivity.
Assume it takes 1 worker to produce the entire GDP of the US.
What is that 1 worker worth?
What is everyone else worth?
Do we not have the ultimate in productivity when no one needs to do anything?
Assuming we could get to that fantasy land state, does wealth go up? OK let me say that it does? You tell me for who! For the masses or for the 1 person (10, 20, 1%, 5% or whatever figure YOU choose to decide depending on just how PRODUCTIVE you want to make that last X%)
Productivity in and of itself CONCENTRATES wealth at the top.
Innovation and DISRUPTIVE technologies help spread it back.
Wealth was spread (increased) when Ford invented the assembly line. Do you doubt that? Once that productivity exceeded the demand, wealth got destroyed (concentrated?) in the following bust. Do you doubt that?
The more productive we become the more concentrated the wealth and the fewer people that participate until the next disruptive technology takes hold. Those fighting the new technology are the losers.
Where are we in that cycle? You tell me.
Mish |
