Productivity in agriculture
Ronald Bailey, speaking about his book The End of Doom: Environmental Renewal in the Twenty-First Century, told Bob Zadek that over roughly fifty years the amount of food produced in the world has tripled while world population has only doubled, so that food is cheaper and more abundant than at any previous point in human history. He attributed this largely to modern technologies, naming chemical agriculture and genetically modified crops, which he said made it possible to feed more people using less land. Bailey illustrated the point by asking his listeners to imagine producing food at 1960 productivity levels for a population of 7.2 billion people: doing so, he said, would have required plowing up an extra area the size of the entirety of North America. Instead, he said, the world is reaching what he called “peak farmland,” producing more and more food off less and less land over time, a development he described as a benefit for both humanity and the natural world. Ronald Bailey on the End of Doom (2015)
Zadek framed the same material in terms of labor. He observed that as less farmland is needed, fewer workers are needed on farms, which frees them up for other, more productive activities. Earlier in the conversation Zadek had put the question more broadly, asking what makes environmentalists opposed to chemicals per se when, in his framing, chemical use increases the productivity of farmland and agricultural life, feeds more people, reduces hunger and reduces the cost of food. Bailey did not dispute that framing; he answered that the notion that synthetic chemicals were creating a cancer epidemic was first promoted by Rachel Carson in Silent Spring, written in the 1950s and ’60s when, he said, nobody had a good theory of what causes cancer. Fifty years on, Bailey said, the actual incidence of cancer at any age for Americans has been going down for twenty years, and had it stayed at its 1990 rate, 100,000 more people a year would be getting cancer. He cited the American Cancer Society and the National Cancer Institute, and said the American Cancer Society has pointed out that exposure to chemicals of all sorts, natural and synthetic, probably causes 2 to 3% of cancer, with most cancers caused by genetics, smoking and obesity. Ronald Bailey on the End of Doom (2015)
Trust, exchange and entrepreneurship
Kevin Vallier, in a conversation about mandatory PPE, told Zadek that he knew of no measures that look explicitly at social trust and entrepreneurship levels, calling the idea a good subject for papers. He offered a reason to think a deep connection exists: social trust reduces economic growth in part because people exchange less, and it affects productivity levels because the ability to exchange and form closely-knit economic organizations is reduced, so labor productivity is probably reduced by lower trust. Entrepreneurship, he said, follows the same logic, because innovation occurs in moments of exchange — that is how a startup gets money and how it hires workers who can be flexible and creative. A less trusting society, he concluded, engages in less exchange and has more corruption, so opportunities for innovation decrease, and he said less entrepreneurship is in fact what is being seen. Mandatory PPE (2020)
Zadek had introduced the exchange by describing himself as a lawyer and business person with a profound respect for entrepreneurship and small business, and by summarizing Vallier’s book as observing that as social trust declines, so does trust in business and the willingness to take a risk, and as risk-taking declines, entrepreneurship declines, becoming a brake on the economy. Vallier treated the link as plausible but untested, saying he hoped one day to be able to test the empirical hypotheses. Mandatory PPE (2020)
Innovation, know-how and total factor productivity
Edward Conard, in a discussion of inequality policy, distinguished total factor productivity — which he defined as the productivity coming from know-how, not from capital investment and not from educating the workforce — and said the amount coming from innovation is shrinking over time. He put it at about half a percent a year, down from about double that in the 1990s. Questioning Biden’s Inequality Narrative (2021)
Conard’s account of how innovation is produced was gradualist. Incentives from taxes, return on investment and payoffs for risk-taking, he said, happen very gradually over long periods of time, over decades and decades, and he argued it is not the case that cutting a tax rate causes people all at once to start inventing companies like Google, Facebook, Intel, Microsoft, Apple and eBay. What happened in the United States, in his telling, is that people shifted over a long period from being mechanical engineers to being computer programmers, and more MBAs were mixed together with scientists to commercialize innovation. Skilled workers mining what he called the technological frontier, he said, get exposure to valuable ideas and can start companies, and Google can invest billions in an idea while other entrepreneurs can take an idea across the street for venture capital. Sitting in an internet cafe in Greece, by contrast, yields none of those ideas or that training, which he described as on-the-job and a lifetime of mining the frontier. Questioning Biden’s Inequality Narrative (2021)
Conard also tied productivity to the composition of the economy. He said smart people today work for Google, Facebook, Intel, McKinsey and Goldman Sachs, employ no blue-collar workers, and largely work for each other increasing their own productivity, and that in the United States, with a shortage of talent, the focus is on innovation that increases the productivity of the constrained resource. On the other side, he said automation has increased the supply of low-skilled labor, manufacturing employment fell from 30% to 10% of employment with much of the shift going to services, and the productivity of services has not grown anywhere near as fast as that of manufacturing, which he attributed to the difficulty of supervising service workers compared with engineered factory work. Questioning Biden’s Inequality Narrative (2021)
Efficiency and its distributional consequences
Roger L. Martin, whose book Zadek described as almost a must-read for CEOs and CFOs, opened by conceding that pursuing efficiency has been great for America: it increased productivity and made the country the richest large country on the planet. His argument was about degree. Using the analogy of eating ice cream all day until a doctor objects, he said that over the last 40 to 45 years median income in the United States has stagnated in a way it never stagnated before, even though historically the country became the great economic power it is because in over 90% of the years of its existence the average or median income marched upward quite smartly. When More is Not Better (2021)
Martin identified the mechanism as pressure applied to a system that had produced a large, vibrant middle class with a tail of rich people and a tail of less well-off people. When that system is subjected to an obsession for efficiency — opening up completely to trade, not worrying about antitrust laws, grinding down labor costs as much as possible — the distribution of outcomes, rather than remaining a bell curve with a big middle class and small tails, starts to convert into what he called the 80/20 curve, in which very few people get the benefits of more economic growth. When More is Not Better (2021)
Across episodes: no development
The excerpts show productivity treated in four separate conversations — agricultural productivity with Ronald Bailey, labor productivity and trust with Kevin Vallier, total factor productivity and innovation with Edward Conard, and efficiency and income distribution with Roger L. Martin — with no shared question carried from an earlier episode to a later one and no guest responding to another’s treatment.
What the sources do not cover
The excerpts do not supply a definition of productivity common to the guests, nor any measure of it beyond the figures each guest cites. They do not state whether the guests agree or disagree with one another, since none of them addresses another’s argument. Vallier’s proposed link between social trust and entrepreneurship is expressly described by him as untested, and the excerpt of his conversation ends before any policy discussion. The Martin excerpt ends mid-sentence in a section break, and the Bailey excerpt ends mid-sentence as well.