Productivity is Bullshit

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Today I want to briefly take on the concept that I see underlying most of the bad ideas from progressives. And it's "productivity," as defined by economists. When you accept productivity as a good measure, you can and will start arguing that up is down, 2+2=5, and only having more humans on Earth can save us from societal collapse. That last one is a real example, as you'll see when we get there.

Here's a famous quote from Paul Krugman that sums up the economist's religious belief in productivity:

Productivity isn't everything, but, in the long run, it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.

This sounds reasonable, and maybe even is reasonable in an economy like the one Marx described, in which businesses were in the business of making and distributing things (leaving aside the imperialism, war, slavery, and ecological destruction that were unmeasured "inputs" to industrial capitalism).

But now what businesses make, more or less, is productivity. Just think about it. What's the input now that goes into a worker before a worker outputs something. Is it anything that our ancestors would have recognized as productivity? I mean, some part of the input is that sort of thing (wheat, oil, water, wood, concrete, etc). But most of what goes to a worker is, well, money. And what do workers output, from this perspective? It's not a good or a service. It's money! That's how workers are viewed by the bosses: how much revenue they cost and how much revenue they generate. The input is money and the output is also money.

In a world in which money measured things, that might mean that "productivity" would be correlated to a higher standard of living. But money these days mostly measures money. Here's an quick explanation from Geoff Mann's 2022 article on degrowth in the London Review of Books:

Yet while GDP dominates economic policy, it has been subject to withering critique for decades, not least because it is so obviously a poor measure of human wellbeing. All ‘output’ contributes to GDP, no matter if it is in education or healthcare, fracked gas or weapons. It doesn’t matter, either, if an increase in GDP is distributed between two rich people or among a million poor people: if you get hit by a bus, and it costs thousands to save you (or fail to), both you and the bus driver have made a positive contribution to GDP.

So GDP is just money - if you take out a loan to buy a fancy convertible that costs $100,000, you've just contributed $200,000 to the GDP! Does that mean that we will be better able to feed, clothe, and shelter people? Not even close. I can come up with infinite examples like this - if you create a totally bullshit job, say college admissions consultant, that grows into a multi-billion dollar industry, then you have greatly increased GDP. Now, college admissions consulting isn't useless to the individuals who use it, because it gives them a leg up on those too poor to afford it, but it is useless to the world at large. It neither improves the abilities of college applicants (it merely makes them look better on paper) nor increases the number of spaces for college applicants. But it does cost, according to Forbes, at least $10 billion worldwide, probably much more.

Let's take that $10 billion figure and do a little thought experiment. Imagine that the college admissions industry disappeared overnight. Half of the money just disappeared with it. The other $5 billion was invested in creating brand new colleges that could take more students. Would productivity have increased?

Obviously, yes, in the ordinary language sense that we would be producing more of something - more college graduates, more education, more knowledge. But "productivity" in the larger economy would have gone down, by $5 billion! More colleges, more professors, more education, more knowledge. But $5 billion less productivity.

So a college professor who makes half as much money as a college admissions counselor is half as productive! Moving back to material reality, if you operate a farm at a financial loss, you have not "produced" anything, even if you've produced thousands of pounds of wheat. Then if a banker forecloses on the farm and sell it for a profits, to a firm that intends to fallow it as a tax-write off, that banker has had a very productive year. Shutting down a farm which is producing wheat should be the definition of reducing productivity, but if you can turn a profit, it becomes the definition of producitvity!

Lying behind all of this is David Graeber's concept of bullshit jobs. Certain jobs are useless, worse than useless. They produce nothing except for productivity. But the economics profession takes it on faith that any job that the economy is spending money on is increasing productivity. They have to take it on faith. The guiding assumption of economics is that people only spend money for good reason. So all spending is good. And all money is productivity. Producing wheat at a loss is unproductive. Making a profit by shutting down a fertile farm is productive. 2+2=5. Or more like 10 = -10.

The whole emphasis on productivity is so easy to debunk that there's even a statistical law about it. The law, which I learned about from John Lanchester's piece "Get a Rabbit" on flaws in statistics, is pretty simple. As Lanchester puts it: "Goodhart’s law: ‘When a measure becomes a target, it ceases to be a good measure.'"

So if you want to know if students are learning how to read, you might make a reading test. But then if teachers start targeting their teaching towards getting higher scores on the test, then the test stops measuring reading, but instead measures teaching to the test. If anyone is targeting higher numbers, the numbers stop measuring anything useful.

And economists have been targeting higher numbers since GDP was invented. Which means that ever since GDP was invented in 1934, decades before Krugman wrote his ode to productivity, GDP hasn't measured anything useful. In fact, Simon Kuznets, the inventor of GDP, told Congress in 1937 that

With quantitative measurements especially, the definiteness of the result suggests, often misleadingly, a precision and simplicity in the outlines of the object measured. Measurements of national income are subject to this type of illusion and resulting abuse, especially since they deal with matters that are the center of conflict of opposing social groups where the effectiveness of an argument is often contingent upon oversimplification...The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income.

So Kuznets warned us against blindly accepting productivity as a measure of almost everything in 1937. And Goodhart and others have been arguing against using measures as targets since the 1960s and 1970s. But this nonsensical definition of productivity remains the centerpiece of most mainstream discussions about public policy.

And if you accept this nonsense as input, you'll output nonsense. That's what got me started on this particular newsletter. "Progressive Pronatalists" have started whining that we need to have more babies. For GDP. I'm not kidding. The philosopher Victor Kumar seems to be a leader of this little movement, publishing his ideas in The New York Times and elsewhere. Here's a quote from his piece in The Times:

When populations decline, the average age of people in the population increases. This has several harmful consequences. Eventually, there are not enough young people to care for older people and to economically support them through contributions to social programs; to fuel economic growth, technological innovation and cultural progress; and to fund government services.

Notice that Kumar is not claiming that we are going to run out of housing. Or food. Or transit. Or even people. He's not worried about running out of anything that one could reasonably define as productivity. What he's worried about running out of is...productivity. But defined as the economists define it.

I should note, he's also worried about running out of care workers, but that's just silly. Most people aren't care workers. If our population decreases, then a higher percentage of the population would have to become care workers. That sounds like a good thing to me. I mean if they left jobs in construction and farming and education to become care workers we might have a problem. But if they leave bullshit jobs in tech and law and economics and consulting, we'll find a way to manage.

I'm not going to weigh in on the contentious issue of whether or not we need to have fewer people on the planet in order to live ecologically harmonious lives. Obviously we need to have many, many fewer people on the planet if we're going to live our current techno-industrial lives.

And undoubtedly, there are going to be problems as our population decreases in this century and beyond. And they will be exacerbated by the problems set off by the enormous population increase of the previous two centuries - ie global warming and its many, many attendant horrors (check out Kim Stanley Robinson's Ministry for the Future if you haven't already).

But most of the problems caused by our (hopefully) decreasing number of humans on the planet will be caused by a disconnect between degrowth and the political and economic systems designed to run our world as if growth is almost everything. In a world in which 8 billion people are coming close to destroying our planet's ability to support all of us, precisely because we've gotten obsessed with economic productivity, Victor Kumar is begging us to have more children so we can increase productivity. This is so wrong as to be hilariously, outrageously funny, if it weren't such an obvious roadmap for ecological and societal collapse.

And all to make economists' numbers go up.

Like I said, if you enjoyed reading this, forward it to a friend. I'm hoping to make the Anarchist Hot Take's numbers go up. And thanks for reading!

Graham