Increasing Productivity

One of the many ways that people, who are a hell of a lot smarter than me, keep track of the economic conditions in a nation is through productivity reports. Efficiency, that’s the name of the game people. The thinking, if I understand it correctly, is:

Higher Productivity -> Higher Efficiency -> Lower Cost of Production -> Higher Profits -> More Investment -> Better Economy.

The above is obviously a very simplified approach to the whole thing but you get my gist, the higher the productivity, the better off a nation. We all would agree that laziness and dawdling are not good and no one wants lazy and dawdling people around.

The Labor Department released “said the productivity of American workers, the biggest factor determining future living standards, raced up at an annual rate of 4.7 percent in the July-September quarter, the best showing in two years.” The quote is from today’s Washington Post.

This got me thinking: Can you ever be too productive? Technological advances, a better trained workforce, Internet filters, these are some of the things that increase our productivities and ….

And what? So we produce more goods. Does that mean that people consume more goods? What if they have enough goods and don’t want any more? Does that mean that all the productivity was for naught and that the same productive workforce that we aspired too must now be decreased because the profits are high enough? Did their high productivity lead them to losing their jobs?

In another article today, in Time I believe, I was reading about how American car manufacturers are cutting their workforces like crazy while Japanese car makers, with domestic plants, are adding workers. The article gave a number of reasons for this, chief among them lower pension loads, higher productivity in the workforce and better sales.

Better sales. More people are buying their cars than those from American car companies. Let’s ignore the pension load and the productivity, especially since American car companies are catching up to the Japanese productivity levels. Let’s focus on demand. Demand will end. I mean, there are only so many people and only so many need so many cars to drive on so many roads.

Isn’t this a system, the constant growth of an industry, doomed to end one day? Should I just not worry about that and just enjoy the ride?