We're in a productivity crisis, according to 52 years of data. Things could get really bad.
Michael Simmons
3x 7-Figure Education Entrepreneur / Writing in Fortune, TIME, Forbes, & Harvard Business Review
Author's Note: I spent over 500 hours researching and writing this article. Those 500 hours were spent reading through dozens of books/studies in 10+ fields (history, economics, technology, philosophy of science, manufacturing, management, sociology, investing, innovation). I spent so much time because the topic was both much more interesting and complicated than I originally thought. And, as is the case with all of my longform writing, I use the blockbuster philosophy. This means I don't click publish unless I think it is one of the best articles that has been written on the topic.
“The most important, and indeed the truly unique, contribution of management in the 20th century was the fifty-fold increase in the productivity of the manual worker in manufacturing.”?— Peter?Drucker
It wasn’t supposed to be like this. The “Great Boom” was supposed to last.
From 1870–1970, there was an incredible 50x increase in the productivity of the average manual worker. Let me break that down so it really lands for you like it did for me:
To put the profundity in context, the “Great Boom” is one of the most amazing and under-appreciated events in economic history. The chart below captures its magnitude and uniqueness:
To more deeply appreciate this shift, consider the following:
Bottom line: The people alive between 1870–1970 experienced unprecedented change. Now, imagine being an adult in 1970. Think about how you’d see the world…
Looking Back You See A Wondrous Productivity And Lifestyle Boom
Below are a few examples of the changes and their implications. Of particular note are:
#1: Shortening of the workweek from 68 hours to 40 hours.
This means parents could be home with their children more, spend more time with friends, and spend more time on their mental and physical health.
#2: Removal of child labor
Many children started work at 4 years old and worked 12-hour days doing intricate work that benefitted from having small hands or dangerous work that required working in small places adults couldn’t reach. Around the same time that children were removed from factories, they were put in schools. As a result of this shift and an explosion of free public education, illiteracy went down 20x while school enrollment doubled. As a result, the seeds were planted for an educated workforce and society.
#3: Wonderous technologies in the most important parts of life
We see inventions like cars, elevators, automobiles, plumbing, heating/cooling, penicillin, and electricity. Collectively, these make life more safe, mobile, comfortable, and urban.
#4: 100x increase in worker safety
Worker safety means things like protection from accidents, disease, pollution, fires, etc. along with protections in the case of injury. As an example of the extreme shift that happened, 19th century US Steel workers had a one in seven chance of being killed before 50 and a one in three chance of being disabled, according to economic historian Brad Delong.
In addition, people started receiving benefits like health care, paid vacations, social security, and disability protection. This gave people a new level of safety knowing that they would be taken care of rather than their life being destroyed forever if something went wrong.
With these huge gains, it was no wonder that…
Looking Forward From 1970 You Could Envision?Utopia
Given the massive change between 1870–1970, looking forward from 1970, you could confidently see the potential for another 50x boom because of the computer revolution and digital knowledge work.
The promise was that what machines were for our bodies, computers would be for our brains… except on steroids. Furthermore, rather than sending products/services around the world on planes and ships, we could send bits across the world instantly at zero cost.
The shift to digital knowledge work made it possible to imagine a knowledge work revolution that could eclipse the manual worker productivity revolution:
For example, in 1970, MIT AI pioneer Marvin Minsky predicted in Life Magazine that:
“In from three to eight years we will have a machine with the general intelligence of an average human?being.”
Not only that, in 1933, President Franklin D. Roosevelt supported and the Senate passed a 30-hour work week bill. Though, it ultimately fell through. In 1956, Richard Nixon predicted a 32-hour workweek in the “not too distant future.”
In other words, if you were prone to optimism and living in 1970, you could imagine a work utopia in the 21st century.
But something odd happened…
Bizarrely, In 1970, Lots Of Things Started Going?Downhill
“The simple claim that in modernity ‘everything goes faster and faster’… is transparently false.” — Sociologist Hartmut Rosa in Social Acceleration
At the exact point you’d expect things to go from good to great, bad things started happening.
For starters, the productivity growth rate decreased significantly (known as the productivity paradox):
This phenomenon happened worldwide — not just in the United States. The following chart of GDP per hour (output per hour) growth captures the global phenomenon more precisely…
At the same time that productivity overall was increasing (even if the growth rate dropped), most of the productivity gains went to the top earners while the middle class stagnated. This is known as the Great Decoupling…
This stagnation is a big deal. When you stop believing that your kids will have a better life than you, you stop believing in the “American dream.” And according to a 2022 survey of 1,300+ people in 19 countries, 70% of survey respondents believe their children would be worse off financially — a significant increase compared to previous years.
Other examples of stagnation include:
These before-and-after pictures of the physical world further capture what hasn’t changed in ways that words can’t:
In fact, the list of things going haywire in the early 1970s until now is so large and odd that there is an entire research-based, well-known site devoted to it called WTF Happened In 1971?.
To summarize: We have this unprecedented 50x rise in manual work productivity between 1870 and 1970. Then, at the exact time you’d expect things to have another 50x boost because of the computer revolution, things start slowing down.
The big implication: Ultimately, the productivity paradox points to a gaping hole in our general understanding of one of humanity’s greatest achievements — The Great Boom between 1870–1970. And, it’s more important than ever that we fill that hole now if we want it to dramatically improve everyone’s lifestyle and well-being in the future. Because, if we don’t, things could go from not good to plain bad…
The Productivity Paradox May Be The Most Important Societal Problem We?Face
“The only way to raise living standards over the long term is to raise productivity.” — Ray?Dalio
The Productivity Paradox is not an idle curiosity.
It’s life-changing and relevant for all of us. It impacts our lifestyles, careers, government, society, and economy at fundamental levels. Even if we don’t realize it, the effects of the productivity paradox already touch our lives in many ways…
For example, if societal and individual productivity growth continues to plateau or decline, it could mean war, generational lifestyle stagnation, our currency going to zero over time, the rise of communism, environmental catastrophe, and stalling of innovation.
Unfortunately, these aren’t wild predictions. They are extrapolations of what’s already happening now and backed up by history. This is not the first productivity paradox ever, so we don’t have to completely guess what the implications might be.
Let me expand on each potential future to let the severity sink in…
None of these futures are guaranteed to happen. But they are serious scenarios discussed by many of the smartest people in the world, and that alone is concerning.
Bottom line: This state of affairs is not sustainable. The consequences are predictable based on history. And those consequences have been already playing out and could get much worse.
There comes a point at which one has to declare a state of urgency, if not emergency. And that moment is now.
The productivity growth rate is a fundamental input that impacts lots of other things we care deeply about.
The productivity paradox is arguably the most important puzzle that will determine the future of our society and our careers. We are on a purgatory between hell and heaven. Hell of escalating conflict and stagnation. Heaven of a work utopia.
Given the importance of productivity, you would expect a few things to happen:
Yet, not only is productivity growth rate not talked about, there is a huge backlash against it…
Inside The Productivity Backlash
At first, I thought the idea of a backlash against productivity was ridiculous. I wondered, how can someone be against the idea of getting more of what they want with less cost? But, as I read books and articles that I actually disagreed with at first, I became aware of the compelling points I could not ignore. I realized that I had only been looking at productivity through my own lens rather than empathizing with other people’s lived experience.
Below is a summary of the core reasons there is a backlash against productivity.
While there are many signs of productivity backlash, below are some of the most apparent examples.
For one, there is now a whole genre of anti-productivity bestsellers…
For example, in Four Thousand Weeks, author Oliver Burkeman argues:
The modern discipline known as time management — like its hipper cousin, productivity — is a depressingly narrow-minded affair, focused on how to crank through as many work tasks as possible, or on devising the perfect morning routine, or on cooking all your dinners for the week in one big batch on?Sundays.
We can also see the tension between pro-productivity and anti-productivity culture in these two opposing memes about the same incredibly destabilizing event of Covid:
For many, productivity culture is a tool that the ruling class uses in the context of capitalism to get as much work out of workers as possible.
For example, How Millennials Became The Burnout Generation, which was read over six million times, makes the case that capitalism is the root cause:
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Until or in lieu of a revolutionary overthrow of the capitalist system, how can we hope to lessen or prevent — instead of just temporarily stanch — burnout? Change might come from legislation, or collective action, or continued feminist advocacy, but it’s folly to imagine it will come from companies themselves. Our capacity to burn out and keep working is our greatest?value.
The late anthropologist David Graeber, author of Bullshit Jobs, which also started out as an article with millions of views puts the blame on the ruling class:
The answer clearly isn’t economic: it’s moral and political. The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger. (Think of what started to happen when this even began to be approximated in the sixties.) And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for?them.
Finally, this viral tweet below from former US Secretary of Labor Robert Reich encapsulates a growing sentiment against wealth. It implies that wealth cannot be achieved by entrepreneurs and innovators who start from nothing and who become more innovative by innovating amazing products and services that customers love:
As I spent more time considering all of this backlash, I felt like I was shifting between two realities. Sometimes I felt like people were unfairly judging productivity. Other times, I wondered, “Wow! Maybe there are enough things wrong about productivity that there is a deeper structural issue culturally or economically that I’ve been too biased to see.” (More on how I ultimately synthesized everything later in the article)
Bottom line: It is now cool to publicly be against getting more of what you value with fewer and fewer resources. For many, productivity has become a bad word from bad people (wealthy people) from a bad system (capitalism).
Not only are we having a backlash against productivity, but the productivity paradox is also almost completely hidden from day-to-day conversation or news…
We Think Productivity Is Skyrocketing At The Same Time It’s?Stalling
I was born in 1981. I got my first computer when I was 10 years old — a black & white Mac — in 1991. Growing up, I was always told a narrative of being lucky to be alive during a time of incredible progress. I devoured sci-fi like kids eat candy.
The fundamental tentpole that the progress narrative rested upon was Moore’s Law, which had been true for decades and held the promise to continue for many decades more:
Moore’s Law is the pattern that approximately every 18 months, the price/performance of transistor chips doubles. Given that transistor chips are a core input of the digital world, we can see things getting better every year.
Not once in my first 35 years did I hear that overall productivity might actually be slowing down.
And apparently the same is true for many others. In the process of writing this article, I talked to several tech-savvy, well-informed friends and none of them knew about the slowing productivity growth rate. They thought change was faster than ever.
This gap between the narrative and the actual productivity stats was hard to reconcile at first.
On the one hand, I’d read articles about how AI is changing everything. Then, I’d read an academic study about how productivity growth from AI was invisible in statistics.
It all begged questions that sounded like zen koans — riddles one needs to be enlightened for in order to understand:
To begin to understand these questions, we must first swallow a difficult truth articulated by PayPal co-founder and investor Peter Thiel:
“The first step is to understand where we are. We’ve spent 40 years wandering in the desert, and we think that it’s an enchanted forest. If we’re to find a way out of this desert and into the future, the first step is to see that we’ve been in a?desert.” — Peter?Thiel
Next, we need to have a deeper understanding of the difference between productivity, productivity growth rate and technological change:
With these distinctions, we are now poised to understand the most well articulated explainer for why we aren’t seeing a productivity growth rate increase from the computer and Internet revolutions. In his 784-page book, The Rise and Fall of American Growth, economic historian Robert Gordon makes the case that:
My initial emotional response to Gordon’s work started with incredulity. When I first saw the title, The Rise And Fall Of American Growth, it almost felt like clickbait to me. Given the narrative of constant progress backed up by the dizzying array of new things, the idea that productivity growth rate was slowing seemed silly.
But, as I understood what productivity growth rate actually measured, and I read his thoughts more closely as well as others in the stagnation school, I started to see this school as more and more compelling. Some others that influenced me include:
For example, I started questioning the idea that we’re on the cusp of huge leaps in artificial intelligence any day despite all of the headlines that we are.
For example, I learned about the first step fallacy from AI pioneer and researcher Melanie Mitchell on the Jim Rutt podcast. In the podcast, Mitchell summarizes her academic paper, Why AI Is Harder Than We Think. Being in the AI field for 40+ years and seeing so many optimistic predictions of AI prove wrong, she wrote the paper as an attempt to understand and explain why. To write the paper, she collected several fallacies that hurt people’s ability to make accurate predictions of the future in AI, and the first one is relevant for any technology. It’s called First Step Fallacy:
If you’ve made what you call the first step towards solving a complicated problem, you’re not necessarily on the path to solving that problem because the path might not be continuous. So I stated this as narrow AI is on a continuum with general AI. That’s the fallacy.
….What Stuart Dreyfus, who was an engineer said, “It’s like assuming that the first monkey who climbed a tree was on the path to going to the moon because the monkey had gotten high in the tree.”
Interestingly, Yann LeCun, one of the most highly-regarded AI researchers in the world applies the same point to Large Language Models (LLMs), the approach that ChatGPT is built on:
In other words, we see AI doing amazing things (AI being the world chess champion / winning Jeopardy) and then we extrapolate all the way to AGI taking over the world in a few years.
Mitchell also talks about the difficulty of understanding how hard problems are in advance of solving them:
“Well, I guess like all of these fallacies, the problem is that we have so little insight into our own intelligence that we don’t know what things are?… the things that are easy for us are so invisible to us. We don’t know how hard they are for machines. That’s part of the problem is that we don’t understand our own intelligence well enough to make predictions about how complex machine intelligence is going to be.”
A metaphor for this challenge is thinking about solving technologies as climbing a mountain. When you’re ascending a mountain, all you can see is the peak of the mountain you’re climbing. It feels like if you can just get to the top of it, the problem will be solved. But, the reality is that when you finally get to the peak of the mountain, with your better view, you’ll notice that there is another mountain in the distance for you to scale still. And so you can see how it is impossible to predict how many steps it will take to solve complicated problems where you’re not sure of what’s required to solve the problem.
As a result of persistently under-estimating problems, we think the future will come sooner. We’re smart enough to see and believe that building artificial general intelligence, upgrading the human genome, creating new forms of life, eradicating disease, or living forever are all possible. And we assume that we can do it soon.
In addition, I’ve noticed Paradigm Blindness. We think the current paradigm and rate will go on forever and apply to everything. We often can’t see the limits of the current paradigm until we sufficiently explore it. And, we can’t be sure what the next one will be.
We can see a lot of evidence for these fallacies. For example, in 1965, Nobel laureate and early AI pioneer Herbert Simon predicted that: “Machines will be capable, within twenty years, of doing any work a man can do.” Since then, there have been many waves of AI euphoria and wild predictions. As recently as the end of 2016, Elon Musk predicted that Tesla would have full self-driving by 2017. It’s now 2023, and there isn’t clarity on when it will actually happen.
AI breakthroughs are followed by narratives about how AI is imminent and about to change everything. The reality is that the advance does have a major impact, but its impact is spread over many years or decades thus impacting the productivity growth rate less than we might expect.
To summarize: Increasing our productivity growth rate is more complex than it seems at first. Now, you understand that complexity at a deeper level, you’ll be less trusting about article headlines proclaiming that a new technology is about to change everything as we know it overnight and more trusting that over time changes will be more profound than we could ever imagine.
Unfortunately, rather than talking about productivity growth rate, it’s not even on the agenda. Rather than mobilization, there is backlash.
So where do we go from here?
To answer this question, let’s take stock of what has been covered in this article so far…
The Productivity Paradox Is The New Silent?Spring
In 1962, Rachel Carson wrote the Silent Spring, which, for the first time, brought mass attention to the increasing effects humans were having on the environment. Her book served as a wake-up call that something needed to be done before it was too late. In the 2020s, we need a silent spring for productivity.
Given the backlash against productivity, many people have come to the conclusion that productivity is bad.
But, when you think through the implications, we don’t actually want less productivity as a society. We want more…
On a personal level, whatever our goal is (meaning, happiness, aliveness, money, impact, connection), we want to get to it faster and easier with all else being equal. For example, given the choice of taking a 15 minute trip somewhere or taking a 4 hour detour, we will always choose the faster approach. Even if our goal is to maximize relaxation, we will take the most efficient path for that, which might be taking the longer, but more scenic route.
Things like bloat, burnout, dehumanization, and inequality aren’t the ultimate result of productivity. They are they result of other failures:
But, here’s what’s important to understand…
Failed experiments don’t mean productivity is bad and we should stop experimenting.
The myths about productivity shouldn’t define it.
To improve is fundamentally human.
We have drastically improved manual work productivity in the past using a proven framework, and we can re-use the same framework for knowledge work now.
Before we can redistribute productivity gains, we need to have productivity gains.
At the end of the day, productivity is a scapegoat, and it shouldn’t be. Rather than blaming productivity, we should be celebrating it. Rather than doing less experimentation, we should do more.
Anti-productivity backlash is an accurate acknowledgement of symptoms, but an inaccurate understanding of root causes.
Ultimately, what we really want is a new kind of productivity. We want a kind of productivity that is actually more productive, more inclusive, leaves us time for an uninterrupted personal life, and ultimately feels better — more purpose, more fulfillment, more aliveness, and less hurry.
What You Can Do Now: Be Deliberate About Your Own Personal Productivity Growth
Productivity growth doesn’t just happen on its own.
In today’s work world, the implicit focus of most work is execution:
Execution is about doing the same thing over and over in the right way in the right-time frame and getting the right result. It’s about doing a lot of things right.
There is one problem with execution though. We don’t automatically become more productive just by doing the same thing over and over. Rather, once we become good enough, our performance typically plateaus. In academic circles, this is known as the OK Plateau. For example, think about typing and driving. You do these everyday without thinking about it, but don’t improve at them automatically.
To improve at execution, we need a whole different mindset that is counterintuitive. More specifically, we need an improvement mindset. The improvement mindset is counterintuitive because it’s an inherently inefficient process in the short-term that leads to massive productivity gains in the long-term.
With the improvement mindset, we focus on…
What’s important to understand is that the execution and improvement mindset are both important, but they’re also completely different. And, progress on them is measured in opposite ways.
For example, someone in the execution paradigm does the right thing over and over. They could get fired if they don’t produce enough or make a mistake. In the improvement paradigm, most of what one does doesn’t pay off. And when it does, it might only do so over years. But, the one thing that does payoff, may pay back all the mistakes and give a 1,000% return.
For example, it might take 50 hours to improve at one execution task by 10% (or 10 minutes per day). But, if you do that task everyday, you will save thousands of hours over your career because of the increased productivity.
The table below highlights many of the differences between the execution mindset and improvement mindset:
In my experience, the one big thing you can do first to develop an improvement mindset is to set aside five hours a week to deliberate learning, reflection, and experimentation. I call this the 5-Hour Rule, and many of the world’s top entrepreneurs, leaders, and innovators follow it religiously throughout their entire career no matter how busy they are. For example:
Unfortunately, setting aside time to deliberately improve one’s work is hard on multiple levels:
As a result, many people procrastinate on improving their productivity.
Realizing how important and hard deliberate improvement was, about 10 years ago, I created a whole accountability and support network so my friends and I could help each other learn and grow together. More recently, I decided to make it public using the best of what I learned…
From April 3–April 28, I’m doing a month-long improvement challenge called Month To Master. During the month you:
This article was written with love and care using the blockbuster mental model. If you're interested in creating your own blockbuster article, I have a year-long, in-depth training program that I personally lead. To learn more, fill out this application form.
Consultant and Coach specializing in teaching business to solve pertinent problems in a data-driven approach. Data Literacy Podcaster ?? . Space Nerd ??
1 年Thanks for this thought provoking article, Michael. I'm still hung up on the 1970 point and the likely outcomes. How would your reading treat the hypothesis that the decline in strong interstate conflicts / wars and high stakes economic competition have had a role on the decrease of productivity? Also, maybe the boom period brought such sudden specialization and we ended up in a place were we were addressing bottlenecks in isolation between industries. I'm thinking how microlearning can increase teaching and training time with mobiles for instance.
Technical Leader I Project Manager I Scrum Master I Java I Full-stack Developer I Interested in Learning & mental models
1 年Thanks for sharing! "There were other unique events that boosted productivity, which can only happen once such as women entering the workforce. " If we just do a small comparison, we find that: Nowadays men have the biggest share making existing technology -- just like it used to be when manual workers were exclusively in the hands of men -- what I'm trying to highlight is: We women are working to entering into the technology market and effect on it -- maybe this is a glimmer of hope such as what's happened before.
Professional Coach, trainer | NLP Master
1 年Great Article, ChatGPT seems to be all over my algorithms, maybe it's just me.
Critical Response Engineer with Pure Storage
1 年Thanks Michael for such an amazing article! An eye-opener indeed, I couldn't stop reading it. I love your newly coined term "improvement mindset", I hope you don't mind if I steal it from you going forward! ?? I also wanted to say big thanks for your continued work. You've been a great inspiration to me, it was though your work that I realized the importance of mental models and first principles. Which in turn, coupled with a few more concepts, enabled me to overcome my Impostor's syndrome at work. Thank you sir!