What is productivity anyway?

[Dave2002]

Today (R4 at 8.30am) had a section on "productivity" - http://www.bbc.co.uk/programmes/b099v33m
It is claimed - yet again - that the UK falls behind other countries in terms of this measure, and also that London has a much higher productivity than the rest of the UK. But what does that really mean?

More "units" produced in a given time? Greater value of output in a given time? Some other more or less arbitrary measure?

Are comparisons with other countries sensible anyway, as their outputs may be different, and the measures used in each may not be the same or even remotely comparable?

There ie even a hidden assumption that higher productivity is a good thing - but without knowing what is being measured, and what the effects are, that is also uncertain.

[Hornspieler]

It is claimed - yet again - that the UK falls behind other countries in terms of this measure, and also that London has a much higher productivity than the rest of the UK. But what does that really mean?

More "units" produced in a given time? Greater value of output in a given time? Some other more or less arbitrary measure?

Are comparisons with other countries sensible anyway, as their outputs may be different, and the measures used in each may not be the same or even remotely comparable?

There is even a hidden assumption that higher productivity is a good thing - but without knowing what is being measured, and what the effects are, that is also uncertain.

It is just a way of convincing the general public that the government is "On the ball" - which patently, it is not.

I speak from experience as a former Management Services Consultant, whose job was to devise Bonus Schemes to encourage employees to profit and increase their earnings by adding to a business's PRODUCTIVITY.

(In other words, to enhance the security of employment and the continuity of the company or firm's future)

NB. ....without putting the safety of the workforce and the security of the company at risk.)

HS

[teamsaint]

Well worth reading up on.

From what I have read, and that was a fair number of articles, nobody is really clear as to why the UK apparently has lower productivity than, say, France. The measures used may be somewhat arbitrary, and may not in fact reflect what is really going on.

The apparent low productivity seems to be used as a stick to beat workers with. So no surprises there.

http://blogs.deloitte.co.uk/mondaybriefing/2017/04/the-uks-productivity-puzzle.html

[french frank]

The apparent low productivity seems to be used as a stick to beat workers with. So no surprises there.

Not sure where that idea comes from. The article was very informative, though.

[teamsaint]

[QUOTE=french frank;645717]Not sure where that idea comes from. The article was very informative, though.[/QUOTE


These things aren't always benign, are they ? Narratives........

Perhaps 33 years working for British manufacturers , publishers etc has clouded my judgement.
Or not.

[french frank]

These things aren't always benign, are they ? Narratives........

Perhaps 33 years working for British manufacturers , publishers etc has clouded my judgement.
Or not.

I was just thinking that idea didn't seem to come from the article you linked to.

I think it was suggesting that the more investment companies made in technology and new methods, the more 'productive' - and profitable - they became, and the better rewarded the workforce. So you could say that the true blame for lower productivity lies with the companies and that this is transferred on to the workers for not working as hard as in other countries. Though I didn't see this suggested, and in the end it would still offer a puzzle: why wouldn't the companies want to be more profitable?

[Serial_Apologist]

I was just thinking that idea didn't seem to come from the article you linked to.

I think it was suggesting that the more investment companies made in technology and new methods, the more 'productive' - and profitable - they became, and the better rewarded the workforce. So you could say that the true blame for lower productivity lies with the companies and that this is transferred on to the workers for not working as hard as in other countries. Though I didn't see this suggested, and in the end it would still offer a puzzle: why wouldn't the companies want to be more profitable?

As I understand it, productivity is pretty well universally defined as output per unit of labour, i.e. per human being working by hand or by hand + machine(s) on converting raw materials into commodities. Seemingly counter-intuitively, one of the contradictions of capitalism consists in productivity, i.e. the production of value, being dependent on human labour (or labour power, in the correct Marxist terminology), because the value to the employer - the "surplus value" he or she shares out after the product has been sold - needs the subservient boss over worker power relation, as set up in the capitalist enterprise, to control the overheads - all other bills (for materials, heating, business rates) having to be met, or at any rate on a much tighter rein debtswise than wages, which can be kept down - as has become notoriously the case ever since trade union power was reduced during the Thatcher era. This of course being why employers oppose employees organising collectively in unions to better their share of proceeds wherever possible. If as a consequence of the anarchic character of markets the periodic but evermore frequent recessions resulting from over-production (not the same as over-productivity!) were to lead to an overall shrinkage of production to a point where the vast majority (excluding of course the rich) were barely able to afford even the basics of everyday necessity, this would not matter to the employing class, as long as their enterprises remained sufficiently profitable to keep themselves and their friends, families and shareholders rich and still continuing to operate. It is vital not to forget the lesson of history that it was only pressure from below that secured the conditions and rising living standards now being undermined. At the end of the day the law, police and army are there to guarantee the proverbial "rule of law". Yet, seemingly ironically, the fewer employees required the better, the perennial wage bill being what it is; and since, all things (including willingness to work hard) even out, gross employee productivity levels needed to keep a firm in business is more dependent on the productivity of the means of production, i.e. keeping machinery updated and introducing robotics etc to increase that labour productivity. In the end process, profitability takes place within the market place, global or otherwise, when the capital is " realised", i.e. the merchandise is paid for; profitability does not on its own guarantee any given firm's survival - it can still be taken over by other, not necessarily more profitable but stronger backed firms, though it can of course help inasmuch as it attracts share bids which feed into a "virtuous" self-fulfilling cycle. I thought these interconnections between productivity, profitability, competitivity and security of employment, which are intrinsic to capitalism, were not sufficiently brought out in last night's Free Thinking "discussion" (more like a full-blown row) between Yanis Varoufakis and Ruth Lee on Radio 3, to which I drew attention in the thread I started yesterday.

[Beef Oven!]

Productivity is the efficiency measurement of the relationship between inputs and outputs.

[teamsaint]

I was just thinking that idea didn't seem to come from the article you linked to.

I think it was suggesting that the more investment companies made in technology and new methods, the more 'productive' - and profitable - they became, and the better rewarded the workforce. So you could say that the true blame for lower productivity lies with the companies and that this is transferred on to the workers for not working as hard as in other countries. Though I didn't see this suggested, and in the end it would still offer a puzzle: why wouldn't the companies want to be more profitable?

I'm not sure of the value of the measurement of productivity in any case. OK,it might be useful to have a snapshot of " productivity", if that reveals a trend ,EG of substantial underinvestment.
However a couple of things occur to me. Firstly, at the micro level , (for businesses in competitive environments at the level of individual organisations, ) this national measurement is somewhat irrelevant. What matters is their own return on investment, their own profitability. Unprofitable and unsubsidised enterprises will fail, and be replaced. In the case of the UK, the apparent low productivity growth seems to be something of a statistical mystery,rather than something borne out by other economic data.
My own suspicion is that our low productivity growth may well be to do with having stripped out costs(post Thatcher) much earlier than other Euopean economies,meaning that growth in productivity that they are experiencing is something from which we have already had the benefit. But I accept that this is nothing more than a hunch.

[Dave2002]

Productivity is the efficiency measurement of the relationship between inputs and outputs.

Not according to one of the two people interviewed this morning - as he was at pains to point out that productivity isn't the same as efficiency.

I suspect that loads of different people use different terminology, and only a few people really know what they are talking about, and whether they are talking about the same things when they discuss with other "experts".

See https://en.wikipedia.org/wiki/Productivity

I think sa might be referring to labour productivity - but it's not clear that's what the programme was discussing. A particular industry could presumably put that factor up by losing staff, but that would cause other problems - though it might fudge the figures in the usual morass.

[Serial_Apologist]

I'm not sure of the value of the measurement of productivity in any case. OK,it might be useful to have a snapshot of " productivity", if that reveals a trend ,EG of substantial underinvestment.
However a couple of things occur to me. Firstly, at the micro level , (for businesses in competitive environments at the level of individual organisations, ) this national measurement is somewhat irrelevant. What matters is their own return on investment, their own profitability. Unprofitable and unsubsidised enterprises will fail, and be replaced. In the case of the UK, the apparent low productivity growth seems to be something of a statistical mystery,rather than something borne out by other economic data.
My own suspicion is that our low productivity growth may well be to do with having stripped out costs(post Thatcher) much earlier than other Euopean economies,meaning that growth in productivity that they are experiencing is something from which we have already had the benefit. But I accept that this is nothing more than a hunch.

Low productivity is endemic to the UK. Historically this country under-invested as a hangover from the illusion the sun would never set on the Empire, and never really caught up - to what extent the continuation of this reflects banks' reluctance, post 2007 to lend, I admit I have no idea.

[Serial_Apologist]

I think sa might be referring to labour productivity

Is there any other form?

[Dave2002]

Is there any other form?

Try this - again - https://en.wikipedia.org/wiki/Productivity

[Beef Oven!]

Is there any other form?

In the final analysis, productivity can only be the result of human activity. But that can be intellectual as well, distinct from labour.

[Dave2002]

In the final analysis, productivity can only be the result of human activity. But that can be intellectual as well, distinct from labour.

I expect so, though I can just about envision a situation in which productivity is improved (or not) as a result of accidental/noise interferences, which could alter a physical system, or the way that that humans behave within a system.

Another concept which we often hear talked about is "work" - with an assumption that it's a "good thing". So today we hear about Universal Benefits being good at helping people "into work". Work and productivity are seemingly linked, as are social attitudes to people who work, and those who don't.