When my boss talks about productivity, what he means is that I am not making him enough money, after the cost of my labor is deducted from what he brings in through billing. Niether one of us is an economist, of course or we would be working somwhere else.
``Efficiency is a very tricky notion in economics. Intuitively it has some relation to productivity, but the most basic notions of efficiency used in mainstream economics, notions like Pareto-optimality (the equilibrium state where no change could make anyone better off)..''
Again at the business street level, my boss seeks to improve my productivity by various methods which mostly amount to a work speed up, more repairs per hour. But on that treadmill, I will never make him the kind of money that the sales crew do. So in his mind, sales are both more productive and more efficient.
Minimizing waste is conceived in his mind as minimizing mistakes.
``I am suspicious, however, of the idea that physical production of goods has a specially sacred status, even in terms of importance to real well-being. We need goods, yes, but no matter what economy we live in we need other things too. Including (no matter what economy we live in) accountancy, legal services, customer service, sales and/or distribution, maintenance, transport, communications, programming -- lots of things don't involve making physical stuff for people to use or consume...''
I wouldn't deny this at all. What bothers me is that with the whole shift over to non-material goods, the US can literally no longer reproduce its material infrastructure. That's why we have New Orleans still half populated.
There are all sorts of social and cultural problems with this shift. Most people don't know anything about building or making things. We are no longer an industrial society with all the skills and knowledge that presumes. So, for example, we don't know how to mobilize and deploy the mass amounts of material and labor to re-construct cities and regions that have been devastated by natural disasters.
Iraq is an interesting issue here, because obviously we can't reconstruct it either---even if there was no on-going war. I am not convinced at all that more money would do the trick. The problem is that there in no longer the managerial expertise to organize such massive public works, so the money just disappears with no concrete poured. The old generations who knew how to organize manufacturing and construction are mostly gone and the newer generations are mostly business and economics majors who have never worked on the shop floors and been involved in production. They just don't have the experience of organizing on this material scale.
And then too, I had been drinking... Well, I came back from the gym all full of piss and vinegar and poured a couple of stiff ones to read the list. Even in the morning chill, I still think that the shift away from material goods production has had devastating consequences.
And I work in that sector so what I see is a compete de-valuation of labor at every level.
CG