Any comments on what total factor productivity measures, its significance, its seemingly low level in both the US and the Euro zone?
I know there have been Marxist attempts to think through productivity stats (Perlo, Magdoff) and other radical viewpoints (Fred Block).
Wolf suggests that Europe's poor performance derives in great part from the difficulty in matching the US in information and communication technologies and in managing the shift from industry to services. But if the measure of productivity suffers a downward bias in these sectors (true?), then it is hard to believe that Europe's relatively greater measured difficulties are based on problems in the sectoral composition of the economy.
In the case of Germany--with its abundant skills, globally competitive companies and formidable export sector (as Wolf underlines)--it seems that a bright future is unusually dependent on the strength of global investment demand. Internal deregulation of the labor market may help to create some miserable low paying US-like "service" jobs (all night convenience stores and seven day retailing or home 'services'--gardners, maids, nannies), but the growth of high paying jobs, that is real employment, seems to depend on growth in those higher tech and capital goods industries tied to global investment demand on which social and direct wage cutting has very little direct positive effect. What policies undertaken on a coordinated global level will stimulate that variable of investment demand seems to me to be the key question for Germany. It's the kind of question that remains in my mind after having read James Galbraith's work. I heard that red Oskar actually had some of JG's work translated for internal party circulation.
yours, rnb