Your use of the word productivity appears to be a misnomer. What you really mean is efficiency of output per unit of labour. What is the difference? I suggest that whilst the latter designation is largely value free, the former is a riddled with subjectivity.
I acknowledge that this assertion is at odds with the usual usage of the word productive and indeed with most dictionary definitions. However, I would argue that usual definitions are based on a false premise: that increases in productivity is generically beneficial. In fact there is apparent confusion in the meaning of the term, for while the definitions I have surveyed are all synonymous with “efficiency”, if one is to look at a list synonyms for “productive”, it would contain a great many value laden words like: beneficial, advantageous, constructive, gratifying, worthwhile, valuable etc.
So what is my point? I suggest that it should not be assumed that productivity is necessarily beneficial and should be distinguished from the idea of efficiency. I acknowledge that you have rightly pointed out that increases in efficiency (productivity) by way of technology may have a negative effect on social justice, but then brushed this issue aside by asserting that technology also creates new products and occupations to maintain the demand for labour. However, your underlying assumption appears to be that social justice aside, increasing productivity is positive.
I am sure that you would acknowledge that there were many exceptions to this generalisation. I imagine that you would not admire an improvement in the “productivity” of illegal meth labs, or factories producing suicide bomber jackets, fake IDs, illegal weapons etc. Of course not; but what about less obvious things? What about improved productivity of cigarette manufacturing; coal mining, or destroying rain forest to expand production of palm oil? That’s a bit trickier isn’t it?
Perhaps in addition to concerns about social justice, we should also consider a cost benefit analysis to determine whether a particular increase in productivity is of overall benefit to society. Now I’ve really opened a can of worms haven’t I? We actively discourage the productivity of cigarette manufacturers by prohibiting advertising and imposing draconian taxes on the industry, because of the cost in treasure and lives resulting from smoking. The latest data I can find (2008) puts the cost of smoking at over 30 billion dollars pa. The social costs of alcohol consumption are in the order 15 billion pa. We also heavily tax this recreational drug industry to discourage its productivity. At the same time we encourage its productivity by allowing it to advertise its lubricant for accidents and violence and claim the cost of doing so as a tax deduction. Public policy seems a little confused about this productivity issue, doesn’t it?
Oddly, although junk food has now overtaken tobacco as the leading cause of death and disability, presumably with significantly greater costs than tobacco’s 30 billion price tag, we do not restrict advertising, or impose pejorative taxes. Are you content when the productivity of the Crispy Cream factory improves? It is worth noting that the people most affected by these three examples are in the lower socio economic stratas of society.
The inconsistencies in public policy with respect to “productivity” and cost efficiency indicate a significant level of confusion about the benefits of increasing productivity and its corollary of reducing the price in the market.
The Labor Party is very confused about the issue of climate change and industrial productivity. There is no doubt that a business as usual approach to climate change to keep the price of coal as low as possible will maximise the productivity of Australian industry, hence the policy inclinations of the Coal-ition. The Labor Govt was more sophisticated in its understanding of the issue and introduced a carbon tax (reluctantly) to reduce the cost efficiency of fossil fuel use and encourage more expensive alternatives; expensive in the short term, but more productive in the long. Labor understood (or was it just the Greens?) that coal was only cheaper if the environmental costs of burning the stuff were not accounted for. Unfortunately, they did not see fit to abolish the billions of dollars of subsidies to the coal industry.
However, the carbon tax was an acknowledgment that the notion of productivity is complex and fraught. If such complexity existed in the fossil fuel industry, could it also exist in other industries?
The broader mining industry is another example. Technology has long made mining a capital intensive industry rather than labour intensive, in relation to the value of production. Mining efficiency continues apace and ever greater volumes of finite and irreplaceable resource is extracted at ever diminishing cost by multinational companies which pay very little tax. Certainly there are significant multiplier effects in the development phase of such mines, but they soon diminish once the mines are in full production. And then there are the subsidies, both overt and hidden: the toxic tailings; disrupted and or polluted water tables; the loss of agricultural potential, the redundant tax payer funded infrastructure, the huge consumption of fossil fuels and their consequent emissions etc etc etc.; Booms are always extolled as being productive; but booms, by definition, always precede busts. It was ever thus. The assessment of their productivity rather depends upon which accountant you use and what externalities they pick from the cherry tree.
What about the fishing industry? The increasing use of gigantic trawlers with huge nets that can scoop up entire schools of fish along with non target catch, using the latest technology and operated by tiny crews, represent a huge improvement in efficiency. They are perfectly designed to hasten the collapse of what remains of the world’s fisheries. These trawlers are certainly efficient, but are they productive?
Agriculture? Australian farmers, once they adjusted to a range of antipodean idiosyncrasies, have been remarkably innovative and efficient. They were, and arguably, still are, the backbone of the Australian economy. However, even this story of innovative success has its caveats.
Our farmers represent just 2% of the population; with value adding and multiplier effect they sponsor approx 12% of GDP; their export earnings are in excess of 32 billion dollars. However, 50% of Australian farms run at a loss. How can this be? How can such efficient enterprises be unviable?
Rural Australia reached its apotheosis in the 1920s as a consequence of soldier settler grants. In terms of relative population, it has been in decline ever since. It is not an overstatement to assert that rural Australia is dying. It is dying in spite of its innovation and ever increasing productivity. In fact it is dying because of its increasing productivity.