Though it was recently announced that productivity in the US rose 1.3% from the previous quarter, Alan Greenspan is worried about the collapse in productivity:
“I think it’s the most serious problem that confronts not only the United States but the world at large and more exactly the developed world especially. American productivity is not significantly different from zero growth in the last 6 or 8 quarters. And the cause of that… is that capital investment has been inadequate to fund the amount of assets that you need.”
Others say that the problem is not that investments are too low; but repeat a statement attributed to Charles Duell, commissioner of the United States Patent Office in 1899, that: “Everything that can be invented – has already been invented;“ Still others suggest that “productivity” is not well measured. Many make recommendations how to measure better, how companies and government should change their spending patterns to increase productivity and so forth.
These recommendations and analyses miss the main issue: Where there is no accountability, or it is weakened, measures of “productivity” lose their meaning, whether they show great improvements or are dismal. Better measurement or spending more on R&D or any other recommendations are useless, unless accountability is dealt with first. Weakened – or, to start with, weak — accountability is the common cause between the China stock market bust and the productivity declines around the world.
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