Productivity Debate: Overview

June 05, 2026

There is a debate going on right now (some of it behind paywalls, see below) about how to compare productivity across countries. The debating question is whether Europe has fallen behind the US because of lagging productivity and whether the comparison can even be made given how Technology and Productivity are measured. This post discusses a different way of measuring productivity and comparing it across countries based on Systems Theory.

First, why us this academic debate important? (1) If the investments in Computers and Artificial Intelligence is to make economic sense, it has to increase productivity. How we measure productivity will determine whether the calculation itself makes sense. (2) The Productivity Debate hides a much deeper and more important debate:

Productivity measured conventionally (q = Q/L, output divided by Labor force) hides a number of feedback effects (to include system dynamics) that need to be controlled in order to understand what q means (see below) when embedded in a system.
Production (Q) is not Prosperity, for example, consider the UN's Seventeen Sustainable Development Goals.
The focus on Productivity is a form of Growth Mania. The assumption is that uncontrolled exponential growth can continue forever and the faster economies grow, the better.
Productivity is not Quality of Life. See the Limits to Growth and below.