What does Economic Sociology have to say about declining productivity? This is a question I find myself wondering about ever more frequently and I’d really appreciate any recommendations about where to start reading. The knee-jerk vulgar Marxism I slip into when I’ve not thought through an issue has led me to assume that the issue can straight-forwardly be explained as one of neoliberal wage repression: labour is kept cheap as a structural fix so there’s no need for capital investment, plus capital has captured an ever-increasing share of what productivity growth remains intensifying the underlying problem.
In other words: Labour is subordinated ever more aggressively within workplaces characterised by chronic underinvestment in new technology, against a background of crumbling infrastructure and social fragmentation reflecting the ‘necessity’ of austerity. But articles like this one by Duncan Weldon convince me that I haven’t fully understand the issue and I would very much like to:
What we are left with is a bewildering array of theories as to what has driven the fall but no clear answer. We know the productivity slowdown is broad based and happening across most sectors of the economy. Lower corporate and public investment than in the past almost certainly explains some of the shortfall. Weaker labour bargaining power than in previous decades might also be playing a role. Low wages are allowing low-skill, low-productivity business models to expand and deincentivising corporate spending on new kit. Why spend on expensive labour-saving technology when labour itself is cheap?
But if you think you’ve found the full answer, you probably need to read more. There almost certainly isn’t a single explanation. It’s still perfectly possible to argue that productivity pessimism is overdone, that we are still suffering the lingering after-effects of the financial crisis that will eventually end. But with each passing year that becomes more difficult. A good strategy is to hope for the best but prepare for the worst. And the worst is pretty bad