"We're in a productivity crisis, according to 52 years of data. Things could get really bad."
"From 1870 -- 1970, there was an incredible 50x increase in the productivity of the average manual worker. Let me break that down so it really lands for you like it did for me:"
"50x Increase: Imagine getting 50 hours of work done in one hour. Or imagine doing the work of 50 people by yourself."
"On Average: We're not just talking about a 50x increase for the most ambitious, smartest manual workers. We're talking about all manual workers."
"To put the profundity in context, the 'Great Boom' is one of the most amazing and under-appreciated events in economic history."
"Bizarrely, in 1970, lots of things started going downhill."
"The productivity growth rate decreased significantly (known as the productivity paradox)."
"At the same time that productivity overall was increasing (even if the growth rate dropped), most of the productivity gains went to the top earners while the middle class stagnated. This is known as the Great Decoupling."
"This stagnation is a big deal. When you stop believing that your kids will have a better life than you, you stop believing in the 'American dream.' And according to a 2022 survey of 1,300+ people in 19 countries, 70% of survey respondents believe their children would be worse off financially -- a significant increase compared to previous years."
"Other examples of stagnation include:"
"The price of energy is stagnant rather than decreasing."
"Transportation isn't moving faster than decades ago (ie, cars & planes)."
"Biotech innovation is 1/3 the rate compared to 20 years ago."
"Healthcare costs are increasing significantly without a big results increase."
"Higher education fees are increasing significantly without a big results increase."
"The high school graduation rate plateaued."
"The average lifespan in developed countries is stalling."
"Agricultural innovation has decreased significantly for the first time in nearly a century."
"Large construction projects are more expensive and take much longer."
"While there are more innovations overall, there are fewer innovations per person."
He (Michael Simmons) goes on to dismiss Moore's Law. This kind of surprised me. I've been taking it as a truism that productivity moved from the world of atoms to the world of bits is still productivity. Digital devices still confer benefits to their users, even if they don't result in increased energy production or any other traditional measure. The amount of entertainment, to cite one example, available to anyone with an internet connection today, would cost a fortune if someone tried to buy all the same stuff (whatever the rough equivalents would be) in 1970. It is to the digital revolution's credit that it has delivered more and more benefit without increases in energy consumption, material consumption, and so on -- it should not be a criticism. If it delivers benefits that are free or very close to free, then it is to be expected that such benefits will be hard to measure by traditional money-based measurements.
He has the (now famous) graph of the decoupling between productivity and wages, and that's what I thought the real issues was. That and the skyrocketing cost of certain non-digital goods, like housing, healthcare, and education.
He goes on to predict dire consequences: war, currency collapse, rise of communism, and environmental catastrophe. Well, I guess whether "rise of communism" counts as catastrophic depends on your political orientation; a lot of people are pro-communism. When the word comes up in conversation, I always ask people to define "communism" so I know what they're talking about when they use the word. Here, he doesn't give a definition, but says, "The more growth stalls, the more people there are calling for revolution, not just reform." That seems to be his point: stalling productivity is likely to lead to revolutions within countries, not just wars between countries.
