[lbo-talk] productivity

[Brad DeLong]

>Brad DeLong wrote:
>
>>>Oh yes, Brad, any ideas on why has the productivity per unit of 
>>>capital (may Joan Robinson forgive me) in the MFP accounts 
>>><ftp://ftp.bls.gov/pub/news.release/prod3.txt> been in a long 
>>>downtrend, falling 8% between 1996 and 2001?
>>>
>>>Doug
>>
>>I'm surprised it hasn't fallen more. The incredible cheapness of IT 
>>capital goods means it becomes profitable to use them in less and 
>>less productive and valuable uses. My new furnace has a surge 
>>suppressor on it to protect its cpu, for god's sake. Twenty years 
>>ago I would not have believed that a furnace would ever have a 
>>cpu...
>
>I'm not talking about the cost of capital goods, I'm talking about 
>the alleged value of their output, which is what the BLS says is 
>falling. Workers are supposedly getting more productive because of 
>capital equipment, but the capital equipment itself produces 
>ever-less-valuable output. Shouldn't capital be getting more 
>productive rather than less, or at least staying in place? Which 
>brings up another thing - why did MFP fall in 2001, even though 
>labor productivity was up?
>
>Doug

It's the flip side of the fact that IT capital goods are really 
cheap, and thus it is profitable to use them in surprisingly 
unproductive and marginal places... Capital productivity is *not* 
productivity per dollar of capital invested, it's productivity per 
quality-adjusted machine or chip...

Brad DeLong