Productivity

Frank has a fascinating post (and comments thread) over on the consistently excellent Internet Commentator. Following an article by Paul Krugman in the NYT, he suggests (well, he quotes Division of Labour suggesting) that higher French productivity levels can be put down to the spinoffs of higher French unemployment - that the least productive are removed from the measure. I find all this sort of stuff fascinating and intensely challenging.

The whole thread is doubly interesting because Abiola Lapite adds a normative dimension along the mix, arguing that 'unemployment is always easier to tolerate when someone else has to carry the burden - especially when that "someone else" is voiceless, foreign-looking, and banished to the fringes like France's banlieu-dwelling Beurs.' In other words, an economic policy that prices the less productive out of the market is simply immoral.

No economic system can take the moral high ground when it comes to social and economic exclusion. Indeed, the Anglo-American system, though obviously more dynamic, is also the one that produces the most extreme inequalities (though I wouldn't care to bet as to which OECD country has the poorest lower quintile). But some serious general questions remain. What measures can be used to identify the degree to which an economy is serving society when things like productivity measures produce such patently perverse results? And, of course, to what degree can a system that is necessarily supposed to be free from control be regulated in the name of the society that it should serve?