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The Benefits of Technology: Productivity as a Measure July 11, 2015

Posted by Will Thomas in Uncategorized.
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Cui bono?

Cui bono?

This post is more a meditation than a proper review of economists’ and historians’ interest in how to evaluate the benefits of technology. It is prompted mainly by recent articles by Paul Krugman (in the New York Times) and Matthew Yglesias (at vox.com) about a current state of stagnating or falling productivity in spite of new technologies being produced. The measurement of the benefits of technology in terms of productivity may seem somewhat odd, narrow, or sinister to some, so I thought it would be useful to look at some of the history of thought surrounding these issues to show why progressive economists and policy wonks regard it as a useful measure.

The benefits of medical technologies—ethical and cost-benefit quandaries in certain cases aside—are relatively easy to measure in terms of their ability to improve health and the efficacy of treatments. However, the benefits of other technologies, marvellous or disruptive as they may be, are harder to evaluate. Because technologies tend to replace other technologies and to alter prior modes of working and living, technological change tends to create both winners and losers, leaving it difficult to determine whether, on balance, the process is beneficial at all.