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To: Ilaine who wrote (88423)	4/1/2001 2:27:21 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 436258

>>If the same worker can produce more goods, and the price drops<< then what has the worker really done? what has the worker really improved? our economy is not about productivity for productivity's sake. it is about getting more dollars and increasing the nation's economic wealth. gdp is billed as an economic productivity measure. are there other measures of productivity? sure. are they wrong? no. they just aren't gdp and they aren't economic based. they may be unit based. imagine the us doing 200 times more work and revenues collapsing to $10 for the entire nation. what "value" is gained by saying the us is more productive in an economic sense? not in a piece meal sense. gdp isn't a piece meal number. it is an economic number. to bring this home, if someone gave you the opportunity to work twice as many cases but get paid half as much or work half as many cases and get paid twice as much (all else being equal - hours, etc...), you would obviously choose the more productive route, wouldn't you? yes, the question is loaded. ;-) the question is which choice is more productive? if doing twice as much work is more productive but it means that you lose your home... is it really more productive? on a per unit basis, yes. on an economic basis, NO WAY! just ask your kid who has to move away from his/her friends so mom can be more "productive" ;-) per unit productivity is very important and should be measured. it just isn't gdp, though. btw, lowering costs is supposed to stimulates more demand and causes more revenues, thereby increasing gdp.

To: Ilaine who wrote (88423)	4/1/2001 2:58:16 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 436258

CB - ...I am having a really hard time getting your point. How does the GDP measure productivity? All it measures is aggregate prices. If the same worker can produce more goods, and the price drops, looking at the aggregate price doesn't tell you diddly about productivity. I suspect that there is no way to unambiguously measure productivity, even if 'productivity' itself could be meaningfully defined. It is relatively clear that SB is right in there being at least two kinds of productivity, a unit labor productivity measured in widgets produced by an individual worker's hour of labor, and an overall productivity measured in some kind of total output divided by some kind of total labor. I don't see an alternative to using prices and money for this, but this adds its own new array of measurement problems. In the simplest unit productivity case, an individual is enabled to increase his unit productivity by being provided with a machine to increase his output. But even this has unaddressed measurement issues. What if the machine is really just an enclosure to hide the work of a dozen undocumented workers inside? Any real machine actually does enclose the production of other workers in the manufacture of the capital production equipment, so the hidden workers may not be that far off. In the end productivity is a means to an end, and not a goal in and of itself. The real goal is an improved standard of living, and every ongoing economy achieves this on an ongoing basis, due to the fact that changes to production are continually made, and are retained if they improve things, and rejected if they do not. To the extent that a real, even if unmeasured, productivity increase must sit somewhere behind an improving standard of living, productivity growth does not depend on technology advances, but rather simply on man's choices to improve his lot and economize on the utilization of all kinds of resources. Regards, Don