I have spent much energy and not a little force trying to explain to the Macromancers that Greenspan’s ‘object’ productivity - even if correctly measured (which is a dubious proposition) - is not the same as ‘value’ productivity, which is the real purpose of the exercise.
For example, 500 million miles of unlit fibre optic cable tells Uncle Al things are just cookin’ -whereas you and I know we’d rather have reliable power or cheaper prescriptions!
As usual, I now find Murray Rothbard got their first!:
‘Businessmen and other producers direct their energies, on the free market, to producing those products which will be most rewarded by the consumers, and the sale of these products may therefore roughly “measure” the importance which the consumers place upon them. If millions of people bend their energies to producing horses-and-buggies, they will, in this day and age, not be able to sell them, and hence the productivity of their output will be virtually zero. On the other hand, if a few million dollars are spent in a given year on Product X, then statisticians may well judge that these millions constitute the productive output of the X-part of the “private sector” of the economy.’
