Someone really needs to sit Tom Friedman down for a little chat about economics.
His piece today is about how amazingly productivity is rising as a result of new gadetry. But it\’s not producing any jobs:
The bad news is that credit markets and bank lending are still constricted, so many companies can’t fully exploit their productivity gains and spin off the new jobs we desperately need.
But, err, rising productivity doesn\’t create new jobs. Never has done.
Rising productivity destroys jobs, always has done.
Take the example he uses of a sofa making company. It used to use 20 hours of labour to make a sofa. Now it takes 3 hours. That\’s rising productivity of labour.
So how has this destruction of 17 hours of needed labour created jobs? It hasn\’t of course.
Those who used to do this 17 hours now have to go off and find something else to do with their time.
And they will do something else with their time. Wipe the baby\’s bottom, cure cancer or just enjoy the leisure of sitting on the stoop.
As a society we like rising productivity for the result is that we get both a sofa and a wiped baby/cure for cancer/more leisure.
But it doesn\’t create jobs, it destroys them.