And yet, despite all this, measured productivity growth across the developed economies has slowed. One possible explanation, recently considered by Andrew Haldane, chief economist of the Bank of England, is that while some companies rapidly grasp the new opportunities, others do so only slowly, producing a wide productivity dispersion even within the same sector. But dispersion alone cannot explain slowing productivity growth: that would require an increase in the degree of dispersion.
However, to focus on how technology is applied to existing jobs may be to look in the wrong place, for the clue to the productivity paradox may instead be found in the activities to which displaced workers move. David Graeber of the London School of Economics argues that as much as 30% of all work is performed in “bullshit jobs,” which are unnecessary to produce truly valuable goods and services but arise from competition for income and status.
. . . Numerous jobs fall into that category: cyber criminals and the cyber experts employed by companies to repel their attacks; lawyers (both personal and corporate); much of financial trading and asset management; tax accountants and revenue officials; advertising and marketing to build brand X at the expense of brand Y; rival policy campaigners and think tanks; even teachers seeking to ensure that their students achieve the higher relative grades that underpin future success.
Measuring what share of all economic activity is zero sum is inherently difficult. Many jobs involve both truly creative and merely distributive activities. And zero-sum activities can be found in all sectors; manufacturing companies can employ tax accountants to minimize liabilities and top executives who focus on financial engineering.
But available figures suggest that zero-sum activities have grown significantly. As Gary Hamel and Michele Zanini point out in a recent Harvard Business Review article, some 17.6% of all US jobs, receiving 30% of all compensation, are in “management and administrative” functions likely to involve significant zero-sum activity. Meanwhile employment in financial and “business services” firms has grown from 15% to 18% of all US jobs in the last 20 years, and from 20% to 24% of measured output.
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