wolf hesse's List: economics

• I’ve become very skeptical of the simple argument for efficiency studies.
• The idea is that time has a monetary value (say, the per-hour employment costs of each employee), and if you save time, you save money. One example that LeBlanc mentions is moving printers. It seems to make sense on its face. You spend time walking to and from the printer. Therefore, printers should be located to minimize the total time people spend in transit, which could mean moving the printer closer to the heavy users of printing. Then those people can spend more time at their desks being productive.
• serious fallacy in this argument: the assumption that the constraint on productivity is time at your desk
• . Maybe the real constraint on your daily productivity is mental energy, and you only have enough mental energy to do four hours of real work a day.
• maybe the real constraint is your internal sense of what a reasonable day’s work is.
• the most plausible explanation is that you need to staff for potential demand, but actual demand fluctuates and is generally below potential demand.
• In many tasks, there is probably some room for efficiency improvement that can actually result in sustained higher productivity.  But the benefits are only a fraction of the theoretical benefits you get by multiplying time savings by the money value of time.
• working on a BlackBerry is less efficient than working on a computer
• But people lobby their companies to pay for their BlackBerrys because they want them, and companies often agree because they think they’re getting a more efficient workforce.
• I should have emphasized that I agree with the basic point that there are vast, vast inefficiencies in the economy that, if eliminated, could have enormous benefits for all of us. In particular, we could make much more use of automation, especially through the expanded use of software (if we could find software companies that make software that works well, that is).
• What I’m more skeptical of are time-and-motion efficiency gains, especially when it comes to knowledge workers.

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