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To: Arik T.G. who wrote (640)	10/31/2000 1:35:02 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 686

atg, those types of efficiencies are not directly accounted for in gross economic productivity measurements. anecdotally, it is obvious that tech produced "efficiencies." therin lies the problem. gdp wasn't growing very fast contrary to the efficiencies people knew existed. i think the lemonade example pointed this out. the machine drastically increased efficiency, but b/c the laid off employee remained unemployed, "productivity" for the two person community didn't budge, all else being equal. efficiency improvement, yes. economic productivity improvement, no. the govt would see this and say "the lemonade tastes better, so even though you sell the same amount and make the same dollars, revenues really went up 10% - now we have 10% economic productivity growth." problem is, they didn't. let's say the guy selling the lemonade lowers his price due to external competition. the increased efficiency plus added competition will lower the 2 person community's economic productivity. increased efficiency, yes. lowered economic productivity - absolutely. look at dram. for a while they improved technology so much that revenues cratered and earnings turned to losses. why? a direct result of efficiency. improved efficiency led to decreased productivity. the key is economic productivity vs physical productivity - two entirely different animals.