Paradox: Raising productivity may give us less of what we need

Continuous growth is the natural state of the economy in capitalism, because everyone is struggling to remain competitive by improving their productivity. Companies compete by offering more for less, so they must continually streamline procedures, and automate and outsource work to cheaper suppliers. The remaining employees will need to work more efficiently. In return we get more stuff cheaper.

But – as many studies on happiness show - at some point, more stuff and more money, doesn’t make us much happier. We barely have the time or attention to consume it all. In extreme cases, products, whether it be clothes, toys or food, are produced, distributed and discarded virtually un-used – or they accumulate in attics and storage rooms. Instead, what we really need might be less stress, and more time to savour what we have.

Likewise, producing and consuming more typically translates into greater use of resource and CO2 emissions.

Paradoxically, we are running faster and spending precious resources in order to get more stuff we don’t really have the attention to enjoy.

Is this raising productivity or the opposite? Are we getting more or less? It’s not always clear. The problem is that we seem to be stuck in fast forward towards more and more. If you chose less growth, you will lose out completely in the competition  – and for most, that’s not very attractive either. Indeed a paradox.

Message for Tiger Mom: It's not all about being rational

Suketu Metha wrote a critique of "Tiger Mom" Amy Chua and her husband's recent book about the triple package of traits that supposedly determine one's success in life. The article was printed in Time Magazine back in february. 

Metha goes to the heart of what "success" and "achievement" means, reminding us that the disciplined and achievement focused approach to life is not always what we need. 

Here's a quote: 
"It's not conformity that makes this country great; it's an individual striking out against the expectations of his culture, Bill Gates and Mark Zuckerberg dropping out of Harvard, Miles Davis coming out of heroin addiction to produce 'Round About Midnight, the 14-year-old Billie Holiday turning the pain of her childhood into the bluest beauty, Sylvia Plath taking on death with pills and poetry, William S. Burroughs writing from the bowels of his addiction in Naked Lunch; it's Hemingway and Fitzgerald and Cheever and Carver drinking and writing, writing and drinking through their demons. Imagine what American culture would be if American artists had kept a tight check on their impulses.

When people dream of moving to America, it's not just so that they can be prudent, studious, restrained. "

Suketu Metha is the author of the splendid book about Mumbai, Maximum City.

Attention is the first resource that we will run out of

We create all this stuff, but we can barely find the time to use it – because we are so busy creating even more stuff.

And now the economy is crashing and unemployment is rising because we can’t consume fast enough to keep production growing.

It’s seems that the first resource, which we are running out of is attention. We can’t overcome to consume enough to keep up growth.

It’s a weird, backward logic – but it’s real, for now.

The more we have, the less we appreciate additional growth. It takes more to make us happier – while on the other hand, we need to run even faster and put even greater strains on the planet’s resources to increase consumption.

At some point it implodes, when gains are clearly losses.

Value and price are not the same - we should keep it in mind

We often use “price” and “value” as if they had the same meaning. But when you dissect them, there are several areas where it’s important to keep in mind that they are different.

GDP is one. It’s almost banal these days to point out that measuring a society’s wealth in terms of GDP – simply the economic activity – is misleading. There are other factors, which contribute to the true wellbeing of an economy – there are other values than money.

In the industrial age, with its focus on physical objects – atoms – scarcity determined the price. Exclusivity made stuff expensive. These days the economy is increasingly based on information – bits. Bits are different than atoms. Their price may be low, but when bits are shared and widely distributed and used, their value increases.

When you recycle or reuse an object, value is created, but in purely economic terms it’s a loss, compared to simply throwing the old away and buying a new.

Many people can report about the rise in quality of life that comes from getting a job so close to their home that they can bike to work. When you don’t need a car, you spend a lot less, but in this case you experience an increase in utility and pleasure. This illustrates a decoupling between growth in value and growth in revenue.

Finally, price and value do not grow in sync. It’s the old 20/80 rule again: You can often get 80% of the value for 20% of the price. The last 20% of value is much more expensive. The higher you are already, the more expensive it becomes to achieve the next marginal increase in value.