What Is Productivity?

A useful clarification from Karl Smith:

Countries aren’t poor because the people don’t have work, they are poor because the work they do is less “productive.”

I put productive in quotes because I think even many readers of this blog instinctively equate productivity with the work ethic or can-do-it-ness of the worker. Productivity is mostly driven by machines and technology, however.

Having a lot of can-do spirit and a shovel is no match for being ho-hum and having a bulldozer.

Exactly. Chinese farm workers aren’t lazy, they’re working without machines which makes it difficult to be as productive as a guy using a tractor. I would add, though, that in the modern world productivity’s about organization as well as machines. Federal Express didn’t invent the airplane or the truck or the cardboard box, but they came up with a different way of putting it all together.