Does productivity matter?

 

The Solow Computer Paradox, or IT productivity paradox has been running for a while now. The latest installment of the mysteries of productivity has been published recently here.

Obviously, we cannot expect economists to tell us anything useful, so a short listicle on practical reasons for the paradox may help. The Black Box approach to organisations taken by economists is unable to support human-centred automation vs. human-replacement automation. A Glass Box approach is required for this. Good intentions that lead nowhere useful can be found here and here (both pdf).

Robo-Taylorism

Human activity in physical space is fully exposed to the panopticon of surveillance capitalism and Digital Taylorism here. Chickenized cyborg gig-economy jobs under algorithmic management dominate sectors such as logistics.Within a limited framework, these dehumanized enterprises are being 'optimised' for productivity. One can only hope that the Gradgrinds doing this find themselves locked into a pre-Ocado business model and fail. Attempts at micro-surveillance (bossware, tattleware etc.) in cognitive, social, creative etc. settings backfire, and certainly don't lead to anything resembling real productivity.

Financial engineering

Productivity is a topic of importance to an age of industrial engineering, but of questionable relevance to an age of financial engineering. Anglo-Saxon capitalism has been in the latter for some years. Try and invest based on 'value' or 'company fundamentals'. See here and here.

Productive enterprise as busted myth

The Gervais Principle here shows the organisation as a dysfunctional structure with matters other than optimal productivity on its mind.

Functional stupidity (here pdf) limits individual and collective cognition in an 'information age'. Perhaps the key factor in current productivity shortfalls.

Bullshit Jobs here are all too prevalent, and there seems to be no effort to eradicate them. "The market has a natural tendency to undersupply good jobs." - delicately put by Acemoglu here pdf.

Gammon's Law of Bureaucratic Displacement here is not restricted to a few public sector organisations. " in a bureaucratic system … increase in expenditure will be matched by fall in production …. Such systems will act rather like ‘black holes’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ’emitted’ production.

 Bureaucracy’s most destructive effectsare due to its permeation and impairment of the activities of non-administrative staff.

An example is the progressive transformation of nurses from patient-centred carers to administroids whose requirement to produce detailed patient care plans and participate in workshops and seminars leaves them little time to attend to patients’ basic dietary needs or prevent them developing pressure ulcers.

The second major cause derives from the mechanical nature of bureaucracy. Its proliferation is not simply the product of individual empire building. Although a bureaucratic organisation encourages, and is nourished by, individual self-interest, proliferation is inherent in the system itself."

Similarly, Pournelle's Iron Law of Bureaucracy: "Pournelle's Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people":

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization."

Parkinson's Law is worth revisiting here.

Socio-Technical Systems here is a well-established approach to designing effective, productive organisations, but is seen as a specialist interest.

Office layout

Ever since the Action Office was subverted into cubicles, office layout has been determined by unaccountable bureaucrats with no consideration of productivity (with some exceptions of course). Open plan offices and the 'creativity' demanded now are basically incompatible. If enterprises had any real interest in productivity, this situation would have changed long ago.

Central Banking

Cheap debt from central banks is keeping Zombie companies alive. These companies increase 'productivity dispersion'. Their continued existence highlights the lack of interest in productivity.

Labour market

Labour market tightness may be necessary for productivity increases - here. A post-covid possibility.

Inappropriate automation and technology

"The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency." Bill Gates

Despite the introduction of cloud documents for group working, office technology has been functionally fossilised for a long time. Simply put: When did everyone stop using Powerpoint? The tools for WFH similarly make no real use of technology for more effective working e.g. do any video conferencing tools use automatic mediation here pdf? How is the budget for facilitator training? How many firms have flipped their offices here? Does management know that email is not work here? Is there any scaleable use of lessons learned from CSCW? Recent automation of the hiring process (and people analytics generally) is awe-inspiringly dreadful.

In short, productivity doesn't seem to matter, apart from Bezos' galley-slaves.

As a footnote, if you know any of those souls who think that the robots will do all the work and we can sit around being creative and radical on UBI; treat them with compassion but do not join them in their delusion. We are all off to the Precariat if we don't get organised.