Tag Archives: productivity

The Myth of Efficiency

By James Kwak

Planet Money’s latest podcast features an interview with Matt LeBlanc, an efficiency expert. LeBlanc’s job is to observe various processes and figure out ways to make them more efficient. The idea, is that by increasing efficiency companies can save money, which ends up helping everyone through higher productivity and lower prices, even if some people get laid off along the way.

I am as much of a compulsive efficiency nerd as anyone (well, almost anyone). LeBlanc lays out his toiletries in the morning in a specific order in order to minimize transition time. When I lived in Berkeley, I figured out the fastest way to drive to school. The various possible routes were different paths through a grid that included some stop signs and some street lights; the best  route involved slowing down at one intersection, looking to see if what color the light at an intersection was, and making a decision based on that. On one of my previous blogs I wrote a post about the quickest way to get through a security line at an airport. (Tip #1: Don’t unload your bags into the plastic trays until shortly before you reach the X-ray scanner. Your bags were designed to help you carry a lot of stuff with two hands; if you unpack them early, you have to move your unpacked stuff with the same two hands. Tip #2: Put your bags through the scanner before your computer and toiletries bag; that way you can have your bags ready and waiting on the other end so you can pick up the computer and slide it into your bag in one motion.) One of my pet peeves is businesspeople who fly frequently, make faces when standing behind families in the security line, and then slow down the line themselves because they haven’t figured out how to get their stuff onto the conveyor belt immediately after the person in front of them.

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Productivity and Layoffs

One reason I like reading Brad DeLong is that he’s never afraid to admit a mistake — even when it isn’t technically a mistake, just a question of interpretation. Here is his comment on productivity growth of 9.5% (annual rate) in the third quarter:

“Back in the 1930s there was a Polish Marxist economist, Michel Kalecki, who argued that recessions were functional for the ruling class and for capitalism because they created excess supply of labor, forced workers to work harder to keep their jobs, and so produced a rise in the rate of relative surplus-value.

“For thirty years, ever since I got into this business, I have been mocking Michel Kalecki. I have been pointing out that recessions see a much sharper fall in profits than in wages. I have been saying that the pace of work slows in recessions–that employers are more concerned with keeping valuable employees in their value chains than using a temporary high level of unemployment to squeeze greater work effort out of their workers.

“I don’t think that I can mock Michel Kalecki any more, ever again.”

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