AI and the Delusions of Increasing Productivity

Most of AI isn’t productive, it’s just another form of consumption.

Like GDP (Gross Domestic Product), economic Productivity is an unquenchable spring of delusions, delusions being pushed to new heights of delirium by promises of endless leaps of productivity as AI is deployed in every nook and cranny of the global economy.

Let’s start with what Productivity measures. Like GDP, Productivity distills everything in the world down to money: the cost of all inputs (labor, capital, resources) and the monetary value of the output (goods and services). If the output goes up while the input costs remain the same or decline, Productivity is going up: we’re producing more with the same basket of inputs (work, capital, etc.). Bushcraft 101: A Field... Canterbury, Dave Best Price: $10.37 Buy New $7.73 (as of 01:25 UTC - Details)

On the surface, this appears commonsensical, but as with GDP, AI and many other sources of confusion and delusion, what matters is what’s not being measured or even recognized. Exhibit #1 in the cavalcade of delusion is Corporate America’s sleight of hand way of boosting Productivity by offloading work onto consumers and households.

It’s not that Corporate America actually generated more goods and services with the same inputs: what they did was transfer work they should have done to consumers and households. Consumers and households are now burdened with unending shadow work dealing with Corporate America’s rubbish products and services, doing unpaid work to fix or maintain products and services that break down or don’t work reliably and are “black boxes,” i.e. unrepairable without “customer service,” which has degraded to the point of parody.

We all perform this unpaid shadow work every day: pump our own gasoline, scan our own groceries, and waste hours dealing with kludgy services and maddeningly dysfunctional AI “customer service” chatbots and 3-item menu choices that don’t have an option for the problem we have– a problem that should be the company’s responsibility, but it’s been dumped on us.

If we measured the billions of dollars in unpaid shadow work forced on consumers and households by state agencies and Corporate America, Productivity would be falling off a cliff. But that doesn’t support the self-serving claims that the casino-economy is doing great because corporate profits are rising.

What’s left out of the glowing claims is the corporate profits come not from producing quality goods and services but from dumping all the consequences of shoddy products and services on consumers and households.

Exhibit #2 is the collapse of product durability and the quality of services. Durability isn’t measured in the the calculations of Productivity, so the fact that appliances that routinely lasted 30-40 years now fail in 3-4 years is not even recognized, much less measured. SAS Survival Handbook,... Wiseman, John 'Lofty' Best Price: $12.99 Buy New $12.49 (as of 01:15 UTC - Details)

The same is true of the decline in the quality and utility of services, and the soaring costs of repair. Recall that “output” is a dollar amount. So when we take our out-of-the-paltry-one-year-warranty vehicle in for a $3,400 repair that used to cost $1,400, since the parts and labor didn’t change in any material way, the higher price boosts both GDP and Productivity: woohoo, 4 hours of labor and a handful of parts now generated “more output” and “higher GDP.”

You see the insanity here: the reason why we’re paying higher prices is the quality of the products and services has cratered, but this is measured as “wonderful” because GDP goes up and Productivity is higher, too, since the input costs went up less than the value of the output.

Monopolies and cartels thus boost the wondrously wonderful trifecta: corporate profits, GDP and Productivity all go up as quality goes down and costs and risks are transferred to hapless consumers and households, who have no other choice in a fake “marketplace” of state and corporate monopolies.

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