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No hard and fast rule for workers

August 20th, 2011

That cute subeditorial pun is the headline for my most recent Fin column (over the fold).

Ideas are tenacious, and beliefs, once formed, are hard to shake. Even when a theory has been killed by overwhelming evidence, it often returns in a form that is almost impossible to refute. Such zombie ideas can do immense damage. The supposed ‘productivity surge’ of the mid-1990s is one example.

The surge was ‘discovered’ in the late 1990s when the Australian Bureau of Statistics developed new techniques for measuring multi-factor productivity (MFP). Initial estimates suggested that MFP had grown at 2.4 per cent a year in the mid-1990s, a rate unprecedented in Australian economic history, and almost unparalleled in the developed world. The estimates seemed to demonstrate that the Australian economy had entered a ‘new era’ of productivity growth.

The initial estimates were soon revised downwards, and a string of bad results in the late 1990s soon brought the estimates of MFP growth down to more mundane, levels. But the idea of a productivity miracle,, proved hard to shake.

At a Reserve Bank conference held in 2000 I was the sole dissenter on this topic. I argued that the apparent productivity miracle was the product of measurement errors. The most important was the failure to take account of the increase in the pace and intensity of work.

This speedup, and the resulting problem of work/life balance were described by John Howard as a ‘barbecue stopper’. They were apparent to everyone in Australia except the economists looking at the productivity statistics.

Increased work intensity cannot be sustained forever, so my analysis predicted that the above-average productivity growth would be reversed as Australian workers reclaimed control of their lives in a stronger labour market.

Although work intensity can’t be measured directly, we can look at related measures such as the number of people working extremely long hours and the proportion of workers compensation claims citing stress. These measures have generally declined over the last decade.

As we might expect, the decline in work intensity has produced a reversal of the spurious productivity gains of the 1990s. But the economists who talked up the productivity miracle have not changed their tune.

Earlier this week, the RBA held another conference on the Australian economy. As in 2000, I made the case that the supposed productivity miracle, and its apparent reversal, were equally spurious. And, as in 2000, I was almost alone in this view.

There were two kinds of responses to the evidence. The Productivity Commission, has broadly accepted the idea that productivity is mismeasured, but says that is only the apparent decline in the 2000s that is spurious. The PC points to big investments in mining and infrastructure that have yet to pay off.

The dominant view, however, is that the gains derived from the productivity miracle of the 1990s have been frittered away through the lack of consistent microeconomic reform.

This story does not fit the history very well. The period of strong productivity growth ended in 1998-99, when such measures as waterfront reform, National Competition Policy, the GST and privatisation were either underway or yet to come. It does, however, appeal to many economists.

We have seen a string of calls in recent months for a renewed focus on productivity and microeconomic reform. Ordinary Australians understand what this means. A recent speech on the topic by Treasury Secretary Martin Parkinson was reported by two different news organisations under the headline ‘Australians must work harder’. In fact, although Parkinson had not mentioned work intensity, but the headline writers made the connection anyway.

About the only thing worse than being told to work harder is being told to ‘work smarter’. Decoded, this means ‘you have to do more, with less resources, and its up to you to figure out how’.

There are still some gains to be made from 1980s-style microeconomic reform. Price-based approaches to the management of water policy and climate change provide examples. But the challenges we face in areas like health and education aren’t amenable to simple solutions based on prices and incentives.

Australia needs genuine productivity growth, from technological progress, better skills and education and less waste of resources through unemployment and social exclusion. Despite the misleading statistics, productivity from these sources has improved over the last decade, and can be improved further.

Among the benefits of productivity growth should be more leisure and more pleasant working conditions. We don’t, in general, to work harder, and we certainly don’t need to be told to ‘work smarter’.

John Quiggin is an ARC Federation Fellow at the University of Queensland. His book Zombie Economics was published in 2010 by Princeton University Press.

  1. Chris O’Neill
    August 20th, 2011 at 21:12 | #1

    About the only thing worse than being told to work harder is being told to ‘work smarter’. Decoded, this means ‘you have to do more, with less resources, and its up to you to figure out how’

    Or you have to work more for the same pay.

  2. August 20th, 2011 at 21:31 | #2

    we’ve kangaroos and wallabies and emus too in plenty
    but they don’t greet your flight to Sydney when you make your entry
    and why you come to be with us is not for pets i tell ya
    the simple reason is because our brand name is “Australia”

    http://thepeakoilpoet.blogspot.com/2011/08/our-name-brand-is-australia.html

  3. Sam
    August 20th, 2011 at 22:53 | #3

    Not sure if this practical but I’ll put it out there anyway. How about a payroll tax that only kicks in after 35 hours? That way businesses still have flexibility if necessary, fewer people are over-worked, and fewer people are unemployed. This would have a negative effect on productivity as currently measured, but as our host says, current measurements methods are flawed.

  4. kevin1
    August 20th, 2011 at 23:38 | #4

    “Australia needs genuine productivity growth, from technological progress, better skills and education and less waste of resources through unemployment and social exclusion.”

    What about the forgone productivity from the huge amount of “lazy capital” tied up in the embellishment of our Gloria Soames so we can get those capital gains? The great Australian search for a “lurk” is so ingrained that no-one in public life will challenge this taboo subject. The result is public policies and social values which elevate ownership over usage, and disastrous options for renters such as migrants, the low income and the young.

  5. Freelander
    August 21st, 2011 at 00:32 | #5

    Yes, John. You have it all wrong. We are the best off we have ever been. The Tsunami of Productivity we have enjoyed, thanks to ‘microeconomic reform’ and especially the recommendations of thirty years of the ‘Commission’ in its various guises has lifted all boats and delivered us all to the promised land. Now this is one people transportation business model that Chris Bowen will not want to smash!

    Now if only we can silence the occasional malcontent….

    I wonder whether aggregation and index number problems are so great, for economy-wide productivity measures, that they really ought to be taken with a grain of salt? One thing though, they do keep a great number of people employed in producing, reporting and interpreting them. And as the Pharaohs said as their stimulus packages resulted in the Pyramids being built, that isn’t a bad thing at all.

  6. August 21st, 2011 at 01:09 | #6

    I’d have to question any methodology that assumes:
    (a) Longer hours = more work done, and
    (b) Working hard = is inherently stressful & unsustainable.

  7. August 21st, 2011 at 01:47 | #7

    I enjoyed reading the Fin piece John. It was informative; so good in fact I quoted it in an article I have submitted for publication.

  8. Freelander
    August 21st, 2011 at 03:05 | #8

    @Steve at the Pub

    In your case those would be erroneous assumptions I suppose. What you do during your work hours probably not much different than what you do not ‘working’, just done from the other side of the bar.

  9. Freelander
    August 21st, 2011 at 03:27 | #9

    More seriously John. The productivity ‘mystery’ in mining was never any mystery at all. And I imagine at least one person at the Commission may even have said so, though probably ignored. Microeconomics would suggest that if the price for the output of mining goes up, which it certainly had, it becomes worthwhile to use resources that you wouldn’t otherwise have used to get extra output as the marginal costs go up. You would expect broadly based productivity measures to go down. In the same way with higher prices ore bodies etc. that before hand would not have been worth exploiting become worth exploiting. But they require more inputs per unit output. The crude measures don’t even attempt to make adjustments for unused capacity and enough other things, some of which it is not clear how you would adjust anyway, that attempting to interpret meaning in the minutiae of movements in a series is as meaningful as reading tea-leaves. Even if the best possible adjustments were made, the errors introduced by the whole process aggregation, expanding and contracting sectors, and others, are sufficient to make the miracle productivity interpretation so favoured during the Howard era simply silly. As you would know the problems given the increasing complexity of many service and industry outputs is making the problems greater, not smaller.

    Never mind, as long as there is a 100 page publication with pretty graphs that you can wave around on the floor of parliament to claim that you are the world’s greatest Prime Minister or Treasurer, or to tell the people that they have never had it so good…

  10. rog
    August 21st, 2011 at 06:28 | #10

    The other day a car ran up the back of me at a set of lights. “Sorry mate, just come off dog watch” said the dazed driver.

    These miners are nuts. They work a 10 or 12 hour shift plus the drive to and from work, another +1 hour each way – there are traffic jams around shift changes. They don’t particularly like the work but they like the money so they try to make as much free time available by compressing their work time into as few days as possible. And they end up like zombies.

  11. Ikonoclast
    August 21st, 2011 at 07:24 | #11

    I would amend the most amusing sentence as follows;

    ‘You have to do more, with less resources, and its up to you to figure out how while managment distract you with pointless meetings and endless workplace reorganisation.’

    Not as punchy as the original but it depicts another element of the ongoing managerial era.

    Typical office conversation over the lunchroom newspaper in the Howard era.

    - “The new Australians Working Together Policy is out.”
    - “More like Australians Working Forever”.
    - “Yep. What do you think of this Future Fund idea?”.
    - “Somebody suggested building future infrastructure with it but the Prime Minister said no, it’s the Future Fund.”
    - “Government’s tightening up on mature age unemployment rules and boosting the age pension.
    - “Funny how that 65th birthday turns you from dole bludger into respected senior citizen.”

  12. Marisan
    August 21st, 2011 at 08:29 | #12

    Ikonoclast @#11

    - “Government’s tightening up on mature age unemployment rules and boosting the age pension.
    - “Funny how that 65th birthday turns you from dole bludger into respected senior citizen.”

    That statement could be as true under the Labor Government as the Liberals.

    I’m nearly 55 and there are no jobs out there. I’m to old, to qualified and to expensive.
    Add to that is the fact that my Job Network provider treats me like a 22 year old Dole Bludger that needs to be disciplined into work.

    If all the workers that are doing unpaid overtime stood up to their bosses and said “No More” there would be jobs for all that want them along with increased revenue (tax) and reduced expenses (Reduced Newstart payments and payments to useless Job Network Providers)

    As you may have guessed I’m somewhat bitter about the situation I find myself in!

  13. jrbarch
    August 21st, 2011 at 10:44 | #13

    Talking about productivity growth without mentioning where growth is allocated is incomplete: The top-end-of-town have captured the growth

    Cheers …
    jrbarch

  14. Ikonoclast
    August 21st, 2011 at 11:24 | #14

    @Marisan

    Yes, I agree with every point you make. Labor is now no different from Liberal. Both major parties are very right wing. Only hope now is to vote Green or Democratic Socialist. We need to destroy Liberal and Labor at the ballot box as they are pro corporate capital and anti-worker parties.

    There is massive real umployment out there, about 8% to 10% if measured properly. I gave up paid employment at 55 as it just wasn’t worth working. Even in the workforce, modern employers treat mature, experienced workers as if they were 22 year olds. I found it downright insulting, especially as I was better educated and more intelligent than most of the bosses. (My literacy and numeracy left most of them for dead.) However, because I did not toe the corporate line, because I questioned things, because I pointed out the illogic of certain management decisions and becuase I was a union rep., I was of course slated as “never to be promoted”. The level of management arrogance and worker bashing these days is egregious intolerable.

    Financially and quality-of-life wise, it was not worth me continuing to work past 55. Working under managerialism was an exercise in tolerating institionalised stupidity. The government kept holding and delaying wage “rises” in the public and private sectors compared to real inflation and giving retirees far better tax treatment etc. In the end I said “expletive-deleted you, you’ve made it such a misery and so expensive to work, I’ll go and bludge as a retiree. That seems to be what you want me to do.” The money I save on tax, fares, work clothes and ancillary costs plus the increases in welfare payments to my family meant I was no worse off. This is not the way an ecomomy should be but I was darned if I was going to keep butting my head against a brick wall.

    Liberal, Labor and their managerialist sycophants can go to a very hot place as far as I am concerned. Dont worry Marisan, I am just as bitter as you. However, I am also pragmatic and realistic. I realised the entire system was going to a very hot place in a hand basket and I just said, “Frankly my friends, I don’t care any more.”

  15. kevin1
    August 21st, 2011 at 11:33 | #15

    I looked at Parkinson’s speech on the Treasury website: rather than continuing previous concerns, he suggests health and education – tertiary and vocational training – as the sectors where most gains can be made, through greater marketisation. But how many more tertiary students can be squeezed in, and the 600,000 foreign students we now have are falling away as the AUD stays high and Asia beefs up competitor unis. Hard to see much change there in the medium term.

    The services sector generally incl. tourism, entertainment and personal services are labour-intensive, and quality is often measured by quantity in the eyes of the customer (and patient) so productivity gains seem more limited. Retail and wholesale were the areas of big job growth last time I looked and labour intensification would be expected to happen there, but as JQ has pointed out, there are limits, and the pendulum has swung back to worker prerogatives a bit more. And as Baumol said in his AER article of 1965 on the “cost disease” in the performing arts, “the output per manhour of the violinist playing a Schubert quartet in a standard concert hall is relatively fixed”. Echoing the Graeme Samuel theme that “competition is a race without a finish” won’t bring applause to most Australians. Is Parkinson whistling Dixie? If so can he try doing it more effectively and efficiently?

  16. Chris Warren
    August 21st, 2011 at 12:10 | #16

    I find these econo-mystic discussions very in-house and vague. If productivity is such a measurable thing what are the units? $ per hr? $ per worker? or $ per $?

    If productivity is a rate, (whatever), why do we need to increase it?

    There is no such thing as “multi-factor” productivity – this is only the part that has not been paid to its real owners. If I cut wages, then provided I sell as much as previously, “multi-factor” productivity will sky-rocket.

    Of course, profits will fall as the amount of capital being reinvested increases. This is coded by university economists into wails about productivity, and Clayton’s-analysis based on this capitalist contradiction but camouflaged as “capital deepening”.

    All that multi-factor productivity growth is – is the residual after workers’ extra production has covered the cost of new capital and after restricted wages increases have been covered [see: Table 2 prelim. at Economic Roundup but rearrange terms]. This coded ‘multifactor productivity’ fact belongs to workers and is an pure ideological/political construction of exploitation.

  17. Freelander
    August 21st, 2011 at 12:35 | #17

    @jrbarch

    Yes. Not trickle-down but gush-up!

  18. Freelander
    August 21st, 2011 at 12:54 | #18

    @kevin1

    Ken Henry’s retirement was a great loss. As he was apparently the architect of the stimulus package we all owe him a great deal. A change in focus was perhaps to be expected. Unfortunately, few economists nowadays, who manage to get to his type of position, in this country anyway, have such a broad-based vision of what is important. If we need Stimulus II, I have my doubts we will get it, or that it will be as well designed.

    ‘Marketisation’ has really destroyed the tertiary sector already, particularly at the lower end of the market, with all sort of nonsense courses being provided by all sorts of carpetbaggers unqualified to provide them. But apparently, revenue and cheap labour in the form of the foreign students who have flooded into the country from this new export industry just fit the ticket. But, really, should we be ripping off relatively poor foreign students from developing countries with suspect educational qualifications? And domestic students? Do we really need an Australia flooded with junk degrees? Yes. It does warehouse the domestic young so they don’t appear in the unemployment statistics and provide a steady supply for part-time low paying jobs, but is that the achievement of two laudable objectives?

  19. John Quiggin
    August 21st, 2011 at 13:26 | #19

    @Freelander
    I covered the mining point in an early draft, but had to cut it for space reasons.

  20. Marisan
    August 21st, 2011 at 13:55 | #20

    Freelander @ 18.

    “‘Marketisation’ has really destroyed the tertiary sector already, particularly at the lower end of the market, with all sort of nonsense courses being provided by all sorts of carpetbaggers unqualified to provide them.”

    Why are we importing foreign students into Australia to be trained as Hairdressers and Chefs.
    Do we need more Hairdressers and Chefs or is this merely another method for the unscrupulous to enrich themselves from whoever has the money?

    Also, the shonks that rorted the Pink Batts Scheme and the BER seem to be the natural supporters of the Liberal Party. The party of business as they claim.

  21. Freelander
    August 21st, 2011 at 15:20 | #21

    @kevin1

    Regarding ‘cost disease’ in service industries, Baumols article, etc, I imagine a well trained managerial conductor can up an orchestra’s notes per hour. Surely that would be an undeniable output increase? And a fully flexible workplace would be able to replace all those existing musicians with less trained and cheaper labour willing to work through what had been breaks. If they then are willing to do unpaid overtime to add to the output figures… Contrary to Baumol, modern reforms can squeeze additional ‘productivity’ from a recalitrant work force as full flexibiliy allows the removal of a range of ‘impediments’. Managerialism and bigotry-based policy innovation are truly wonderful! The real innovation was understanding that the have-nots can be made to have even less!

  22. kevin1
    August 21st, 2011 at 15:56 | #22

    @Freelander
    Re laudable objectives for overseas students, there are lots of contentious issues but the issues IMHO are

    a) do you see a useful benefit for Aust in the opportunity to educate some of the next generation leaders in Asia? I do, including the cross cultural experience for all the students.
    b) will they get a better education than they will at home? If you doubt this, read this from a student at Indonesia’s top university; as a teacher at another Indonesian university I can confirm his experience
    http://www.thejakartapost.com/news/2011/07/30/what-they-don%E2%80%99t-teach-you-ri-universities.html
    c) “ripping off relatively poor foreign students” if they can pay $12-15K in annual fees they’re probably not; an Indonesian high school teacher gets about 1/5th of that
    d) is the funding to Aust unis worth having or not? I don’t know what the % is of total funding (20%?) If you think unis are underfunded now…..

  23. August 21st, 2011 at 16:08 | #23

    I’ll try to stop drinking long enough to suggest an alternative control:
    Pay the musicians by the number of notes played.

    The outcome will likely surprise most everybody. One clue I will give is: There’s no stress claims, nor is there dissatisfaction, or claims of “overwork”.

  24. Chris Warren
    August 21st, 2011 at 16:29 | #24

    Steve at the Pub :

    Pay the musicians by the number of notes played.
    The outcome will likely surprise most everybody. One clue I will give is: There’s no stress claims, nor is there dissatisfaction, or claims of “overwork”.

    The problem with facile comments like this is that they take twice as long to unravel as to stomach.

    Notice how this fellow did not say how much he wanted to pay musicians (!?). The lower the pay, the more stress, dissatisfaction and overwork, arises.

    If you pay the unemployed enough they also will have no stress claims, dissatisfaction, and claims of overwork. So what?

    If you paid Tony Abbott just the same as everyone else, he would erupt in stress, dissatisfaction, and in claims of overwork. So what?

  25. Marisan
    August 21st, 2011 at 16:34 | #25

    Chris Warren @ 23

    “If you paid Tony Abbott just the same as everyone else, he would erupt in stress, dissatisfaction, and in claims of overwork. So what?”

    Going from memory wasn’t Tones complaining that (Before he became leader) that he couldn’t afford his mortgage on the pittance that being a member of the Opposition was paid v/s being a member of the Government.
    Yet he would put us in the same position.

  26. fred
    August 21st, 2011 at 16:36 | #26

    A few questions, some rhetorical.

    “Productivity” is measured from whose point of view?
    Mine or theirs?
    The person, as in the employee/worker, or the other ie corporation/government?

    How would lowering the underutilisation of employment rate, just by decreasing the percentage of ‘un-wanted’ part-time employment for example, alter the productivity of Aussies [relative to the POV above]?

    How do ‘housewives’ a la the ideology of patriachy, keep em barefoot and pregnant and in the kitchen, fit into the productivity debate?
    Pay them a salary, if so who gets to calculate the rates?

    17 million Australians [many 'unemployed' [sic] or ‘retired’ [another sic] do volunteeer work without which many local/community/charity organizations would go kaput and someone would then have to pay someone to do the work or it wouldn’t get done [OK I made up the number at the start of the sentence cos I dunno the real number and it sounded better than the word 'lots'].

    Are these issues part of the productivity denate?

  27. August 21st, 2011 at 16:59 | #27

    @ Chris Warren:
    Facile Schmacile, I’ve seen it done, in controlled situations. The productivity outcome can vary widely, and often is quite a shock to everybody. The outcome re stress & “overwork” claims may be “facile” to you, but it is also accurate.

    Your paragraph on “overwork” of the unemployed is perhaps a tad too facile for me. If someone isn’t working, ergo they cannot be overworked.

  28. Marisan
    August 21st, 2011 at 17:01 | #28

    Re unemployment:

    90% of the people on Newstart Allowance would really like a meaningful job.

    The other 10%, don’t worry about them, pay them the dole until they grow up (Perhaps never)

    But the 90%, give them a decent job, not make work painting rocks white jobs like Work for the Dole. With work for the dole being paid the same as Newstart it’s basically slavery.

    I don’t have the figures but wouldn’t the savings (Newstart Allowance) and extra income (Tax) come close to paying for these jobs. Then the 90% would have some disposable income to stimulate the retail sector (Nearly in its death throes) thus generating more income (Tax) and saving more money (Not having to spend more on Newstart for the soon to be unemployed Retail Workers)

    Isn’t this how the economy supposed to work or am I missing something

  29. Salient Green
    August 21st, 2011 at 18:44 | #29

    I hear you Marisan but neither major party will. They are both servants of the market which has seen all those suitable jobs go offshore.

  30. Marisan
    August 21st, 2011 at 19:05 | #30

    Salient Green :
    I hear you Marisan but neither major party will. They are both servants of the market which has seen all those suitable jobs go offshore.

    Well does anyone have any suggestions on how to make the bastards listen.
    This has been going on long enough!

  31. fred
    August 21st, 2011 at 19:31 | #31

    @Marisan
    You could ask the people of Tottenham.

  32. Marisan
    August 21st, 2011 at 19:33 | #32

    fred :
    @Marisan
    You could ask the people of Tottenham.

    I don’t think that little contretemps has finished yet.

  33. TerjeP
    August 21st, 2011 at 19:34 | #33

    Sam :
    Not sure if this practical but I’ll put it out there anyway. How about a payroll tax that only kicks in after 35 hours? That way businesses still have flexibility if necessary, fewer people are over-worked, and fewer people are unemployed. This would have a negative effect on productivity as currently measured, but as our host says, current measurements methods are flawed.

    Probably better to just axe the payroll tax entirely and reduce unemployment that way. However I would not be adverse to a scheme that provides rebates on company tax liabilities based on nominal wage hours paid times the minimum wage. That would provide a very strong incentive for companies to employ more marginal workers and drive involuntary unemployment out of existence. Although the downside would be that companies would now have an incentive for the minimum wage to increase.

  34. Marisan
    August 21st, 2011 at 19:43 | #34

    TerjeP:

    “That would provide a very strong incentive for companies to employ more marginal workers and drive involuntary unemployment out of existence.”

    But isn’t the idea of unemployment. To have a pool of unemployed in case capital needs them. Also to keep wages low by creating fear amongst the workers?

    Most people are 2 pay cheques away from destitution.

  35. TerjeP
    August 21st, 2011 at 20:10 | #35

    Marisan – no I don’t think that is the motivation for policies that create unemployment. Although Keynesians do have this odd theory that if unemployment get’s too low we will get inflation. However it is a nonsense. With the right policy mix low unemployment and low inflation are both achievable. There is also this theory that regulating wages is benign and good for workers but that is also a nonsence. The theory you offer is not one I have ever heard anybody advocate for.

  36. Freelander
    August 21st, 2011 at 20:49 | #36

    There has long been a reserve army theory of unemployment being that it puts a praiseworthy brake on wage inflation. Praised only by one sector of the economy of course. Thankfully, we have heard that theory expressed recently. It tends to start being expressed when inflation is higher. A problem with that theory is that employers appear to have a very strong preference for hiring the already employed, and their next strong preference, for those who have been unemployed for but a short-time. This reduces the praiseworthy influence and inflation retarding value of much of the reserve army to zero. Maybe we need more churn, into and out of the class of unemployed?

  37. Chris Warren
    August 21st, 2011 at 20:57 | #37

    @Steve at the Pub

    So what is the point – anything can happen “in controlled situations”.

    Which part of the music industry pays musicians by notes played? Using different instruments have different costs even though the same number of notes are played.

    If it was some “controlled situation” – what was the rate per note?

    Even I would jump at the chance of playing notes if I earned a dollar a crochet.

    “Controlled situations” are not relevant. Would you pay bus drivers by wheel revolutions “in controlled situations”? Carpenters by dollars per hammer-blow?

    So precisely, what so-called “alternative control” are you wanting? Controlling what? where?

    It seems that you want a “controlling alternative” for (wait for it) …. “controlled situations”?!!!!

    Huh? Unfortunately, this is facile.

  38. W
    August 21st, 2011 at 21:25 | #38

    @Chris Warren

    Don’t Worry Chris, I think we would both question anything that Steve questions.

    I’d like to hear more from Steve at the Pub as to why longer hours does not imply more work done. If he can give examples, could he put me in touch with the manager, I’d love a job like that.

    I find it more interesting that JQ was almost alone in questioning such the productivity story at the RBA conference. I think it plausible that the PC might quietly recognize the mis-measurement but publicly say another thing. Surely this argument could be soundly debated by looking at the econometric methodology and estimates rather than political point scoring.

    I’d expect (hope) for there to be more people attending these conferences who know astochastic frontier model when they see one.

  39. Sam
    August 21st, 2011 at 23:34 | #39

    @TerjeP
    Well, my scheme is revenue neutral for the government. I understand you think that’s a bug and not a feature. I don’t see sufficient reasons for reducing the overall rate of tax. Also, your scheme doesn’t reduce over-employment.

  40. Fran Barlow
    August 21st, 2011 at 23:39 | #40

    @TerjeP

    However I would not be adverse {averse} to a scheme …

    Sorry … I really hate that one …

  41. Steve Stern
    August 22nd, 2011 at 02:31 | #41

    Aquiar and Hurst have shown in the Quarterly Journal of Economics using the American Time Use Survey that people work less hours per week and not more. Total time spent working at home and in the market has fallen. Intensity is a harder thing to measure, but Americans engage in more leisure now then ever before. Robinson, a sociologist, reports similar things. Once again Quiggin appears to making stuff up. I look forward to hearing what his groupie, Freelander, says.

  42. kevin1
    August 22nd, 2011 at 03:43 | #42

    @Steve Stern
    I thought we were talking about Australia!

  43. John Quiggin
    August 22nd, 2011 at 05:41 | #43

    @Steve Stern

    And, if you could be bothered reading, you would have noticed that I said work hours and intensity were falling in Australia.

  44. Chris Warren
    August 22nd, 2011 at 07:36 | #44

    kevin1 :
    But how many more tertiary students can be squeezed in, and the 600,000 foreign students we now have are falling away as the AUD stays high and Asia beefs up competitor unis.

    This is crazy. There has never been 600,000 overseas students in Australia. I do not know where this figure comes from but the figure is around 470,000 [2010]. See:

    International Students .

    The actual load would be less due to features of the data. Some students are here for 1 semester only or start only in second semester and some finish a multi-year course in first semester. These factors mean that an annual cumulative count can be higher than the actual number of students here at any one time.

    I would guess that the number of international students in Australia will never exceed 400,000 in 2011.

    Presumably some journalist cites 600,000 because they do not know the difference between a student and an enrolment. In this case they probably work for “The Australian“.

  45. Freelander
    August 22nd, 2011 at 07:44 | #45

    @Steve Stern

    Well if agreeing with many of JQ’s points makes me a groupie… then I am also a groupie of Krugman, Stiglitz and Brad DeLong amongst others. Who are you a groupie of? Steve Williamson? Or is the groupieness in your case yet another example of self-love?

    As for your comments, I looked it up and yes, as I suspected Australia and the USA are not the same country. Also, whereas the USA is in deep doo-doo, Australia is not (yet at least). With employment, of all types, drastically cut back in the US, not through voluntary actions of workers I might add, not exactly surprising what the results of the American Time Use Survey are.

    By the way, Steve Stern, you wouldn’t happen to know Mr Mit, Gradual Student in Economics, or Steve Williamson, would you? Let me guess. The Stern moniker. What a clever choice. Are you a climate change denier as well? For a Gradual Student in Economics you are clever!

  46. Freelander
    August 22nd, 2011 at 07:49 | #46

    By the way Steve, Gradual, whoever, the rumour is true. There are countries other than the US of A. I know that is difficult for some in that country who have not yet been drafted and sent to kill elsewhere to believe, but there it is.

  47. Chris Warren
    August 22nd, 2011 at 07:57 | #47

    Second attempt……..

    kevin1 :
    But how many more tertiary students can be squeezed in, and the 600,000 foreign students we now have are falling away as the AUD stays high and Asia beefs up competitor unis.

    This is crazy. There has never been 600,000 overseas students in Australia. I do not know where this figure comes from but the figure is around 470,000 [2010]. See, data on AEI website:

    aei.gov.au|research|Research-Snapshots|Documents|2011051801.pdf.

    The actual load would be less due to features of the data. Some students are here for 1 semester only or start only in second semester and some finish a multi-year course in first semester. These factors mean that an annual cumulative count can be higher than the actual number of students here at any one time.

    I would guess that the number of international students in Australia will never exceed 400,000 in 2011.

    Presumably some journalist cites 600,000 because they do not know the difference between a student and an enrolment. In this case they probably work for “The Australian“.

  48. Mulga Mumblebrain
    August 22nd, 2011 at 08:18 | #48

    I would have thought that by now, after forty odd years of neo-liberal market absolutism in action, that the evidence of our eyes would have allowed us to reach a few conclusions. One, that neo-liberal capitalism is a system established by psychopaths for the benefit of psychopaths, who do not even bother any more to hide their hatred of others. Work throughout the West has been ruthlessly intensified, good jobs outsourced to low wage regimes, wages and conditions pared back and the intensity of work driven relentlessly upwards. The work-force has been casualised, employment has been made more precarious and tens of millions are now ‘working poor’ so miserably remunerated that they work full-time yet live in poverty.
    In countries like the USA the median wage has stagnated for decades. The proceeds of its ‘productivity miracle’ have all been appropriated by the tiny parasitic elite at the top of the wealth and income distribution, and it was their search for higher returns on their ill-gotten loot that has led to the financialisation of the US economies and those of the Anglosphere and the rest of the West to varying degrees. And it was that insatiably greedy lust for profit maximisation without effort, through speculation and financial foot-paddery, that led to the current debt implosion.
    Yet, in the face of the evident failure of this paradigm, as the whole filthy, corrupt and malignant edifice decays around them, the Right is ramping up its demands for more of the same. ‘The Fundament’, as ever the bell-weather here of moral turpitude and far Right hatred for the rabble, is demanding more ‘productivity’ (Murdoch-speak for exploitation) and a return to the halcyon days of outright class hatred and effortless bullying and intimidation (it gets their rocks off) that was Howard’s vicious spawn, ‘Serf Choices’. You can bet, class hatred being, like greed, open-ended, that if Abbott controls both houses that we will see a ‘Serf Choices II’ even more malignant and vicious than its predecessor. Bullying is of the very essence of the Rightist mentality.

  49. John Quiggin
    August 22nd, 2011 at 09:50 | #49

    Actually, Steve Stern is a real person, posting under his own name (unless someone is else spoofing him), for which he deserves at least some points, even if the content is silly. The sockpuppeteer Mr MIT (inter alia) was posting from a different location.

  50. kevin1
    August 22nd, 2011 at 10:00 | #50

    @Chris Warren
    Well, 600,000 is not a crazy figure or a Murdoch fiction (they have bigger fictions to fry), and a paper by Jakubowicz & Monani published by the Academy of Social Sciences in Australia gives the figure of 650,000 in all education at the end of 2009 http://www.assa.edu.au/programs/policy/roundtables/roundtable.php?id=48 I think the higher figure incl. dependents, visiting family too. It’s still our 3rd or 4th export industry, but yes, it has declined significantly, and I won’t quibble with your current estimate.

    Don’t want to get too far off topic here, but for info, Table 1 of the above paper says
    $18B in international revenue from fees & living expenses in 2009 (of which $3.7B is higher ed. fees and $1.9B VET fees), and Aust govt non research funding provided $1.60 to every $1 of international fees in 2009. Of fee income, H Ed was 54%, VET 27%, schools 5%, ELICOS 8%.

    The big issue here is that it functions as a cross subsidy to domestic students, and the current decline has caused big ructions in all these ed segments. http://www.crikey.com.au/2010/10/26/higher-ed-in-trouble-fix-visas-increase-funding-or-bailout-with-billions/

  51. kevin1
    August 22nd, 2011 at 10:09 | #51

    @John Quiggin
    JQ I think you are much too kind. If he is the academic I think he is, I am a bit shocked by the immediate descent into insults. Shouldn’t we expect higher standards than this, or am I just being naive? Where is he by the way, looking for a map, or in a barroom brawl somewhere?

  52. Mulga Mumblebrain
    August 22nd, 2011 at 10:28 | #52

    Freelander, you old tart, you must remember that the Right, seeing that their Friedmanite/Reaganite dream-world of elite privilege, scrabbling for crumbs by the rabble and imperial brigandage abroad (a ‘New American Century’ that began crumbling after three years)is decomposing before their eyes, are going to get very, very, nasty. On one extreme you get the insults and bad potty-training induced misbehaviour of the congenitally morally misbegotten, and on the other are the Breiviks out there just itching to teach ‘the Left’ a lesson in ‘ Western Judeo-Christian values’. They’ll be leaping and ululating their joy today that after forty years they have finally obliterated Gaddafi, then, when Libya becomes a compliant stooge of the West, when the social welfare structure is demolished, when hunger, want and corruption grow, as they ALWAYS do in US stooge regimes, it will all be ignored. The hideous and vicious obscenity of ‘The Responsibility to Protect’ will become, ‘non-operative’ as the next victim is lined up. Of course it won’t go on much longer because the fractures in the global system of rule by homicidal psychopaths are opening up too rapidly and in way too many places to paper over the cracks, but if violence, murder and intimidation (which haven’t failed the West, yet)still have any power, they will be mobilised more often and wider afield than ever.

  53. John Quiggin
    August 22nd, 2011 at 10:41 | #53

    “after forty years they have finally obliterated Gaddafi, then, when Libya becomes a compliant stooge of the West,”

    That’s something of a misreading. Gaddafi was back inside the tent from about 2005, indeed a “compliant stooge” of the West, getting friendly visits from US leaders etc. The embrace of the “Arab Spring” was making a virtue of necessity, easier in this case because of Gaddafi’s past. Now that he’s gone, the focus may shift back to places like Yemen and Bahrain, where the US is finding it harder to abandon the local despots.

  54. John Quiggin
    August 22nd, 2011 at 11:01 | #54

    I should say that there are at least two economists named Steven Stern (and lots of non-economists), so please don’t jump to any conclusions.

  55. Michael Fisher
    August 22nd, 2011 at 11:32 | #55

    I recommend reading ‘The British Worker Question’ by Theo Nichols.

    This is an excellent critical account of how a small number of deeply flawed economic studies produced in the UK during the 1970s were used to frame the crisis of the British economy in terms of poor productivity growth – due in large part to lazy workers and militant unions. The policy solution? Obvious: de-unionise, deregulate, and so on.

    Nichols systematically picks apart the studies’ flawed logic, limited empirical supports and arbitrary political and economic assumptions.

    Nichols shows that the production and use of economic knowledge can have less to do with facts and reason – and more to do with the power that certain representations of economic ‘problems’ can provide to certain economic interests and actors to pursue their broader political objectives.

    After 30 years of de-unionisation and deregulation across the UK economy (and manufacturing industry in particular, where unions now exert almost no influence over the organisation and performance of work) UK productivity growth continues to lag most other leading economies.

    So maybe unions were not really the problem after all. But the policy arguement in the 1970s was never really about the stats. British ruling elites could not tolerate the growth of independent union militancy – which was first and foremost viewed as a political threat. The ‘productivity question’ provided cover for re-asserting political power over organised labour.

  56. TerjeP
    August 22nd, 2011 at 12:10 | #56

    Fran – I’m not averse to having my grammar corrected so long as it is done politely as you have done.

  57. Free Palestine
    August 22nd, 2011 at 12:22 | #57

    Trckng IP ddrsss, chckng n th nms f pstrs. r y tryng t spprss fr spch? Snds lk Chn, nt strl. ftr ll th cmmnts r rspctfl. s frlndr rl nm. Hw bt trjp? h, gss y lk thr sntmnts.

  58. Freelander
    August 22nd, 2011 at 12:48 | #58

    @John Quiggin

    My apologies to Steve Stern then. Just sounded familiar.

  59. Freelander
    August 22nd, 2011 at 12:51 | #59

    I also found it difficult to believe that Steve Williamson had a groupie!

  60. may
    August 22nd, 2011 at 13:01 | #60

    kevin1,steve at tha pub?

    is there a roster list in the thunk tank for culturally assimilable monikers?

    ps

    where’s the pub stevo?

    somewhere between rockhampton amd mckay(sic or sick?crikey)?

    i don’t think you know what a bananabender is.

  61. may
    August 22nd, 2011 at 13:07 | #61

    @Free Palestine

    up the top of this column is the phrase “leave a comment”.

    the blog belongs to JQ.

    it’s his blog.

    commenters are guest–invited guests.

    if he feels like kicking you off,that’s his call.

    if you are kicked off and are peeved about it,start your own blog.

    commenters will flock to you upholding unsuppressed free speech.

    go for it——good luck.

  62. Freelander
    August 22nd, 2011 at 13:07 | #62

    Not sure I understand how looking at IP addresses constitutes an attack on freedom of speech, although, to some people, anything you don’t like nowadays is labelled thus. Seems like a sensible way of detecting astroturf. Certainly means spoofers need take more trouble with their spoofs.

  63. NickR
    August 22nd, 2011 at 13:10 | #63

    @Free Palestine

    This is bizarre, it is JQ’s blog and one would think that he has the right to manage his own property as he pleases. However I am pretty sure the only censorship that takes place on this blog is to do with aggressive language or (rarely) the posting of a politicized talking point that is objectively untrue.

    Further I am pretty sure terjep and JQ are very politically opposed. Go through some old posts and verify this for yourself.

    Lastly (not that this settles anything) you can verify JQ’s position as an economist relative to Williamson here

    http://ideas.repec.org/top/top.person.all.html

  64. may
    August 22nd, 2011 at 13:12 | #64

    ps

    i still haven’t forgotten that JQ deleted an extremely witty, profound and earthshaking bon mot of mine.

    the spoilsport.

    but though i fell into a deep and traumatised state of bewilderment, i heroically pulled myself together and got over it.

    it can be done—i’m not the first—you too can do it—hang in there

  65. Freelander
    August 22nd, 2011 at 13:18 | #65

    Free Palestine :
    @Freelander
    What kind of name is freelander? How do I know you’re not Quiggin agreeing with himself?

    I suppose that indicates, or measures, your level of discernment.

  66. Greg
    August 22nd, 2011 at 13:23 | #66

    What of Michael Mandel? Is he relevant here?

    http://economistsview.typepad.com/economistsview/2007/06/michael_mandel_.html

    “(quoting Businessweek):More broadly, it becomes clear that “gains from trade are being measured instead of productivity,” according to Robert C. Feenstra, an economist at the University of California at Davis… “This has been missed.” …”

    Of course that is the USA, not Australia.

  67. may
    August 22nd, 2011 at 13:26 | #67

    @Free Palestine

    oo ‘e bit!

    i’ll say no more.

  68. Free Palestine
    August 22nd, 2011 at 13:45 | #68

    I’ve deleted or disemvowelled multiple troll comments from an apparent sock puppet. Please no more replies either to “Free Palestine” or Steven Stern

  69. Mulga Mumblebrain
    August 22nd, 2011 at 15:09 | #69

    Dear Esteemed Mr Quiggin-I must dissent from your observation. The ‘Arab Spring’ is dead, throttled in its crib by the old alliance of the USA, Israel and Saudi Arabia and its vile Gulf State allies, the most vicious despotisms of them all. Egypt will shortly receive its new Mubarak, a general or colonel acceptable to the USA, which controls them all. A rigged and long delayed ‘election’, presented as a ‘triumph for moderation’ by the Western MSM, should suffice. Tunisia will be ensnared in new debt, ‘loans’ with the usual neo-liberal conditionalities from the ever-generous West. Yemen and Bahrain remain and will remain hideous pro-US despotisms. The regime change aggression in Libya has succeeded. Gaddafi was never ‘inside the tent’ and signed his death warrant by favouring China, planning to establish a ‘gold dinar’ for intra-Africa trade, financing an African Monetary Fund and Central Bank, and disobeying orders once too often. And Syria is being attacked by salafist jihadis funded by the Saudis. Their attitude, of extreme hatred of the Alawites, Shia and Christians was echoed by a leading Saudi theocrat who declared recently that one third of Syrians (the non-Sunni) would have to be exterminated so that two-thirds (the Sunni) could live. That the Western MSM, with typical mendacity and conscienceless service to evil, could declare this armed, external, aggression, as ‘peaceful demonstrators yearning for democracy’, without a single dissenting voice, has been typically despicable. When the dust settles the Arab world will be ruled by Western stooges even more wicked and servile than their predecessors, whereupon the Western MSM will return to its habitual racist abuse of Arabs as ‘unfit for democracy’.

  70. John Quiggin
    August 22nd, 2011 at 15:13 | #70

    On “Gaddafi was never ‘inside the tent’” I point you here:

    http://www.politicsdaily.com/2009/08/17/john-mccain-praises-libyan-leader-gaddafi/

    Google will find plenty more.

  71. Ikonoclast
    August 22nd, 2011 at 15:52 | #71

    The West is not all evil and the East is not all good. There are black hats and grey hats all over the world. There are no white hats at all.

    If the more powerful appear and act more evil than the less powerful it is because they can. Those who do the most evil, do it because they have the most intrumental power. This is on average.

    The “Arab Spring” is a confused phenomenon. Many power groups, a number of them with fundamental and totalitarian mindsets of their own, are vying for power. The basic cause of the unrest, beneath all the political and sectarian superstructure, is the material condition of the people. This is worsening as the world enters another food and energy price and availability crisis.

  72. Mulga Mumblebrain
    August 22nd, 2011 at 17:30 | #72

    If you wish to understand just where the world is heading, and just how far down the sewer John Howard’s ABC has sunk, just check out today’s ‘Counterpoint’. In my opinion it represents, courtesy of ‘The Centre for Pre-Determined Research’ which so much controls ABC content these days, and four of the most extreme hatemongers one could possibly imagine (three already stars of The Fundament’s Augean stable) yet another low. A ‘debate’ without opposing opinions, just like ‘The Fundament’s’ daily sullage. And Phillip Ruddock sounding like a relatively decent voice.!!?? One feature of the general system collapse will be (and I think we can see it already) ever more frantic and frenetic Rightwing hatemongering, partly to divert attention from those criminals responsible for the coming collapse, but also out of innate Rightwing rage at seeing their ideal world of greed and pitiless cruelty dissolving into the muck from which it was fashioned.

  73. Mulga Mumblebrain
    August 22nd, 2011 at 17:35 | #73

    Dear Mr Quiggin, McCain’s opinions mean nothing. Once Libya showed that it would not follow orders, it was bets off, despite Gaddafi’s years of co-operation. In other words a typical Yankee double-cross. Gaddafi was hated by the West for his support of the ANC against apartheid, for his support for the Palestinians and for his attempts to promote African independence from the West. The CIA stooges who will replace him will follow none of these policies. Another triumph for the ‘Real Evil Empire’.

  74. Freelander
    August 22nd, 2011 at 17:54 | #74

    @Ikonoclast

    Quite right. Unfortunately, if you dare say anything that offends the ‘good guys’ versus ‘bad guys’ mythology many become irate. As one recent exponent of this way of looking at the world repeated “You’re either with US or you’re with the Terrorists.”

    Even really bad guys often have redeeming features (though far from fully redeeming). And even those we admire most, if seen through untinted lens, are noticeably far from perfect.

  75. August 22nd, 2011 at 18:06 | #75

    Prof. Q,

    Very timely and informative post, congratulations.

    I’ve just finished re-reading your 2001 paper “The Australian Productivity ‘Miracle’: A Sceptical View”.

    A comment I’ve heard in relation to productivity, is that the terms of trade may have lulled business into a sort of complacency, in that they find it less expensive to hire labour than investing in fixed capital.

    In that sense, you may be interested in having a look at Phillip Lowes’s 09-03-2011 speech “Changing Relative Prices and the Structure of the Australian Economy”. That presentation contained a chart (Graph 5) showing Real Consumption Wages and Real Production Wages (defined as compensation of employees per hour worked, divided by the household final consumption deflator and GDP deflator, respectively).

    I would like to ask your opinion: on that data and that presented by Jeff Borland at the RBA conference (Figure 8) would be it justified to say that the IR reforms had had the effect of keeping a lid on wages, especially for low paid workers?

  76. August 22nd, 2011 at 18:09 | #76

    @Magpie
    For some reason, instead of appearing “Figure 8″, a smiley face popped up. Anyway, it’s meant to say “Figure 8″!

    But now, this one is indeed meant to be a smiley face: :-)

  77. kevin1
    August 22nd, 2011 at 19:21 | #77

    Back on productivity, I just happened across a 2005 survey of 7818 managers in 16 sectors by the recruitment firm Hudsons (Australia) about employee “burnout” where 32% of managers reported an increase in burnout amongst employees and telecommunications was the worst with 44% of managers reporting this (thanks Sol). Of the overall 32% figure, about 1/3 each reported people leaving their organisation for a career change, or lower productivity, or increased sick days. http://au.hudson.com/documents/emp_au_HudsonReport_Q1_2005_AUS_Part3.pdf

    Work intensification broadly may have declined as JQ says, though I wonder about the measurement issue in today’s labour markets, or amongst managers or in certain sectors; still sounds like a real issue. Even with a tighter labour market, the effect of middle age, econ uncertainty, the golden handcuffs of super schemes would prevent job-hopping by many people, and the problem is unmeasured if repressed in the workplace. One HR expert http://www.hcamag.com/resources/hr-strategy/maximising-employee-performance-while-minimising-employee-stress/111090/ suggests the following to bosses who want to keep their talent on the books and performing well:

    Give employees as much control over their jobs as possible.
    Communicate clearly and often about everything important.
    Talk with your employees about what makes your company great, how you bring value to your customers and how your employees make that possible.
    Make sure supervisors know how to bring out the best in people.
    Encourage employees to talk freely and support one another.
    Help employees design their jobs to be as rewarding as possible.
    Improve your hiring and orientation process.
    Make sure employees have the resources and training to do their jobs well.

    In the official productivity discourse, are such good practices promoted actively by govt, including in their own jurisdiction? Or is that not part of the program?

  78. August 22nd, 2011 at 20:34 | #78

    I have a figure of about 330,000 student visa holders for the middle of this year.

  79. August 22nd, 2011 at 22:27 | #79

    And that might have been relevant if there hadn’t been a whole extra page of comments that I missed.

  80. Chris Warren
    August 22nd, 2011 at 22:46 | #80

    @Ronald Brak

    330,000 visa holders seems about right. There will be some visa grants in the remaining months, but it looks like the total will not exceed 400,000.

    Some visa grants can be onshore visa grants by current international students which can lead to double counting. There are other issues with visa data but depending on the source these can be controlled. Using visa data was an old technique, useful before 2002. Today AEI data is better.

  81. kevin1
    August 22nd, 2011 at 23:06 | #81

    @Chris Warren
    The HREOC paper I mentioned at #50 talks about ABS methodology changing over the period also, but are you just trying to establish the numbers or are you making some other point here? Same question to Ronald Brak.

  82. Chris Warren
    August 22nd, 2011 at 23:57 | #82

    @kevin1

    Due to Quiggin’s crazy software – I missed your comment at #50. This was due to Quiggin’s setting that posts with links go into moderation, so I had a different count than others. Moderated comments still add to counts.

    So I was working on a different page, until Quiggin released the hung comment, and then everyone caught up as they had two identical posts boosting the count.

    Anyway the HREC paper (Jakubowicz, Monami) does not provide any basis for using 650,000. Many holders of a vast range of temporary entry permits would have dependents, eg diplomats, professional vistors etc…..

    If you want a big number, there are always techniques one can use to construct it.

    The usage of 600-650,000 etc needs some explanation.

  83. kika
    August 23rd, 2011 at 12:36 | #83

    Gaddafi has not yet been captured, and it seems that his eldest son, Muhammad, has escaped from the custody of opposition fighters with the help of Gaddafi loyalists.

    “Opposition fighters have not managed to find Gaddafi yet and his exact whereabouts are still unknown. There are unconfirmed reports that he has fled from the country, but other reports say he left the capital after opposition fighters seized control of almost all of the city and is hiding in a bunker outside Tripoli. There are also reports claiming that Gaddafi has been seen at a hospital near Tajura, which is a suburb of Tripoli.

    A diplomatic source said Gaddafi may still be in his Bab al-Aziziyah compound in southern Tripoli, adding that Gaddafi has many bunkers there where he could hide from the revolutionary fighters.”

    http://www.presstv.ir/detail/195259.html

  84. kevin1
    August 23rd, 2011 at 16:37 | #84

    @Chris Warren
    “If you want a big number, there are always techniques one can use to construct it.

    The usage of 600-650,000 etc needs some explanation.”

    Chris you’re jumping at shadows. I’ve already conceded the point, there’s no agenda here! As you show, the discrepancy between enrolments and students is large enough to make it an important one. What’s surprising is that not just the “export boosters” but experts like Simon Marginson, Geoff Maslen, and the HREC authors also make this mistake (you can Google “600,000 international students” Australia to check this). In the context of the immigration debate, the real numbers are not much more than half the popular understanding, and people need to be set straight. Maybe you should find a way to get this more widely understood.

    The reason I brought this up originally was because Treasury wants a big focus on microeconomic reform and productivity enhancement in education. With your education focus , I would like to know what you think about that.

  85. Chris Warren
    August 23rd, 2011 at 19:21 | #85

    @kevin1

    The 600,000 appears to be an AUSTRADE innovation for their crass commercial purposes.

    Universities Australia has a Deloitte Access Economics commissioned report with correct usage of 600,000.

    Of course Treasury wants microeconomic reform and productivity enhancement. This is a standard winge going right back to the Vernon Committee (1965).

    When capitalism has choked-up it always tries to expand exports and complains about too many workers. This is coded as factors affecting “productivity”. [see Vernon v1, p 94f].

    Any economist prattling about productivity without defining it – is engaging in astrology. Vernon defined it as GNP/worker – Roy Green says “output per employee in a given time period” but then says the problem is how to measure inputs and outputs in common units. Although Green does note that classical economics have “an alternative approach” ie Ricardo and Marx [EPAC Background Paper 5 (December 1990)].

    If you accept the present concept of productivity then logically you will support lower wages, greater intensity, more exports, bigger profits for banks and BHP, and more debt. The trick is to step out of this modernist framework.

    So I am more concerned about deconstructing all this noise about productivity in general, not its specific application to a particular industry. Society as a whole does not benefit if capitalists increase productivity – public services disappear or become crowded, wages fall in the long-run and unemployment ratchets up eventually.

Comments are closed.