See it this way, since wages, over time, tend to go up with productivity, there is a good chance that right now, if productivity had grown at the pre-2008 rate, you would be earning 19 per cent more money.
The economy would be 19 per cent bigger.
Things would be great.
This begs the question, why?
Theories vary. Robert Gordon, an economist from the Great Western University near Chicago, reckons the rate of technological progress has slowed.
Others put it down to lack of demand, some even blame austerity, saying that as result of this policy, demand has been weak, and so companies have invested less.
Maybe it is a measurement problem. Take smart phones. All of a sudden, we use our phone as a camera, a TV, a library, a clock, a newspaper, a watch – the list goes on. Maybe we are better off, but this does not show up in the data.
Here is another theory.
Some types of activity can never become more productive. We don’t want teachers to teach more children, or nurses to care for more patients, or hairdressers to cut more hair.
As the economy adjusts and automation puts an end of old, highly productive jobs, more of us work in less productive areas.
Imagine we lived in a utopian world, we could have all the food we want, heat and running water is in ample supply, transport is ultra-efficient. Maybe, in such an economy there is no more scope for growth in production, or at least it is limited, and instead more and more of us work in services where scope for growth is limited.
Then again. we are not there yet, and with the Internet of Things, nano technology, robotics and AI, there is surely more scope for growth in the next decade or two.