The Great Productivity Paradox: Why We Measure Everything Except What Makes Life Worth Living

Since the days of Adam Smith, we have credited rising living standards with an improvement in productivity, typically manufacturing productivity. But as we are on the cusp of a revolution in digital, intelligent work, perhaps we need a new way of conceiving of productivity, particularly as it relates to the things that can’t necessarily be popped into an input/output equation.

From pins to AI, the missing role of ingenuity in our understanding of productivity

All the way back in 1776, Adam Smith in The Wealth of Nations established many of the assumptions we simply take for granted in economic logic. Among his more exciting arguments was that through the mechanism of the “invisible hand,” participants in capitalist systems can generate benefits for others by acting in their own self-interest. He also offers an interesting distinction between productive and unproductive labor. Productivity expert Scott Young notes that “Productive labor, according to Smith, was any work which fixed itself in a tangible object. Unproductive labor, was any work where the value was consumed as soon as it was created. Smith contrasted the role of laborers in a manufacturing plant (productive work) with the tasks of a servant…