Productivity Growth in a Post-Growth Society

In Robert Solow‘s (in)famous growth model, perhaps the most important part was what is now called the “Solow residual” or “Total Factor Productivity” (TFP)–the part of economic growth that cannot be explained by changes in the input of the factors “capital” and “labour”, which is, in effect, the result of technological progress. In other words, TFP is a reflection of us learning how to produce more with the same amount of input. A recurrent theme in this blog is that quantitative GDP growth is highly problematic, mainly due to the related pressures on natural ecosystems. However, even if we decide to stop growing–or, better, to stop focusing on growth–, it is not obvious that we can actually achieve it. And TFP is one of the reasons why this isn’t as simple as many in the degrowth movement seem to believe. Continue reading

Advertisements

Where Does Technological Progress Lead – Ancient Greece or “Beggars in Spain”?

Ancient Greek polis are often thought to be the ideal form of participative democracy and vital cultural life of a society. Political discussions, philosophy, science and arts – male Greeks enjoyed a real “highlife” that many in the educated “elites” of today dream of. However, to engage in politics, arts, philosophy and science, one needs a significant amount of free time. Indeed, Greek vivid public life rested on a peculiar foundation: slaves. Greek citizens were free of doing most of the less pleasant (but necessary) work like washing, cleaning, production of simple everyday-use goods etc. Therefore they had lots of time to visit the Agora or the Amphitheatre. Continue reading