The Hopeless Argument over Productivity Stagnation

Scott Sumner writes,

Do I believe these numbers? Not really, as I don’t believe the government’s price level numbers. Lots of this “growth” occurred in the 1990s and is just Moore’s Law in computers, not the US actually producing more “stuff.” I don’t consider my current office PC to be 100 times better than my 1990 office PC.

Well, Scott, Your current PC’s hard disk capacity is measured in gigabits. Your 1990 PC’s hard drive was measured in megabits. Let me know which of your applications and documents to wipe out to get what’s on your current office PC to fit on your 1990 PC.

Oh, and have fun surfing the net with that 2400 baud modem. That is, if you can figure out how to install a TCP-IP stack on Windows.

In fact, as James Pethokoukis points out, there are those who argue that the official statistics have more recently under-stated the improvement in computers. (The Commerce Department numbers no longer track Moore’s Law.)

Of course, nobody is arguing that we don’t have better personal computers. What we are trying to assess is the amount of the multiple. But I do not know how to make that assessment. Or what fraction (multiple) of a 1990 PC’s value to assign to a smart phone.

To argue for or against stagnation, you have to assign a value to total output in a year and divide it by what you think is an appropriate measure of (labor) input. Then you have to take the second difference of that ratio. Cyclically-adjusted, of course.

Seems futile to me.

12 thoughts on “The Hopeless Argument over Productivity Stagnation

  1. M1 Tank Platoon where I had to install it every time and uninstall it every time was the same utility to me as World of Tanks or Steel Thunder. It’s true.

  2. It does seem hopeless for the whole economy and for exceptionally fast-changing fields like information technology.

    However, it’s much easier and more defensible to do with certain more stable sectors that still employ lots of people and constitute a large share of the economy.

  3. Well, generally, hard disk sizes are in megabytes and gigabytes rather than megabits and gigabits, and desktop hard-drives are now into terabytes, so we’re actually talking about something around 5 orders of magnitude.

    In terms of utility, a 1990s PC was about as useful as a current PC for just a few basic office functions — word processing and spreadsheets — and text email worked fine if you were lucky enough to be at a university or tech company and had an account. But it wouldn’t have mattered if you could master installing your own TCP/IP stack for web use, since neither the web nor web browsers yet existed in 1990.

    But other than basic office functions, a 1990 PC lacked most modern functionality. Digital photos and videos were completely out of the question and monitor resolutions were lower than current low-end smart phones. Most computers lacked both graphical interfaces and mice (navigation was by TAB and arrow keys). I don’t think Sumner is accurately remembering how crude PCs truly were in 1990.

  4. Just to be contrarian …

    Back in the early 1990’s there were games I enjoyed playing: Civilization, Castles, Spaceflight, Leisure Suit Larry, Wizardry, and so on. They’re still playable, through DOSBox or Virtual PC or other emulators, and still enjoyable. Would I find Civilization 5 or Worlds of Warcraft or The Witcher 3 or Assassin’s Creed or other modern games to be one hundred times more enjoyable?

    Again, twenty years ago I was in grad school, not infrequently tasked with cranking out 10 to 20 page papers for various classes, which usually involved reading a dozen or more books, considerable cogitation, much mumbling to myself, lots of typing and retyping and re-retyping, and consumption of health-threatening quantities of caffeine and nicotine. It generally took several days of full time effort. And yes I used a computer back then, rather than a typewriter, so things went much faster than they would have when I was even younger. If I had to write such a paper today, on my 100X faster and better computer, would I get it done in 15 minutes?

    C’mon guys! The technology is so much better now. Show me the improvements.

    • To be contra contrary, if you would enjoy the foldit puzzle games and scored high for folding amino acids to according to the rules for protein folding then not only would be be entertained but science would be advanced which could count as a many fold productivity increase over playing Leisure Suit Larry.

      As for writing graduate papers, if a significant amount of research material became available on the web rather than hunting through the library journal stacks that’s a large productivity gain.

      • Something has to come of all these protein folding studies, and nit just more protein folding studies.

        I have thousands of papers in my endnote. It hasn’t really helped me.

        I have a narrative and it 8s a PSST story: we have to let computerization run its course, but it is largely a distraction thus far.

  5. How much time during the day, do you think, Scott spends at a computer today? How much did he spend in 1990.

    The limiting resource for any consumer is time. No one has yet figured out how to make my day longer, nor for anyone else

    • In fact, the hedonistic treadmill applies and I don’t think computers have saved any net time not even counting all the sunk cost investment by people who love tinkering and see wasting time on them (I resemble that remark) as a feature rather than a bug.

  6. Thanks to smartphones, our opinions can be misunderstood by infinitely more people!

  7. Sumner does mention that the primary use for his office PC is typing and that hasn’t improved by 100 fold since 1990. I agree. It seems that both spreadsheets and word processors haven’t improved at the rate as the underlying hardware. Maybe it hasn’t needed to. Getting these functions onto a PC was the low hanging fruit.

    Another technology that I’m amazed hasn’t improved much in the last 10-15 is web conferencing and webinars.

    • It’s interesting that he picked “90s”. Microsoft Windows 3.0 was introduced released in May 1990. So by late 1990, you could have a fairly usable PC with Windows 3.0, Word, Excel and PowerPoint. (if you had a Mac you could have that a few years prior).

Comments are closed.