A Real-life Druid on "Productivity" Hocus-Pocus

Posted by Andrew Price

johnmichaelgreerThe author, blogger, and druid (no joke, he's a real druid) John Michael Greer has a piece in Energy Bulletin explaining why our normal way of thinking about economic "productivity" is flawed.See, usually productivity is calculated as the dollar value of income produced per worker hour. But there are problems with that metric. It ignores the increasing importance of energy efficiency and it overvalues financial services work that may or may not actually be valuable. After all, it's easy to create "profit" by sitting at a desk and conjuring up some credit default swaps, but we know where that leads.Greer suggests that we look at "energy productivity" instead:In an age that will increasingly be constrained by energy limits, for example, a more useful measure of productivity might be energy productivity-that is, output per barrel of oil equivalent (BOE) of energy consumed. An economy that produces more value with less energy input is arguably an economy better suited to the downslope of Hubbert's peak, and the relative position of different nations, to say nothing of the trendline of their energy productivity over time, would provide useful information to governments, investors, and the general public alike. For all I know, somebody already calculates this figure, but I'm still waiting to see a politician or an executive crowing over the fact that the country now produces 2% more output per unit of energy.This isn't the first time our common economic metrics have been challenged. GDP gets criticized all the time (and for good reason). But Greer makes a great point about the need for resource efficiency-especially energy efficiency-to be incorporated into the statistics we use to measure our country's economic success. After all, we live in a world of limited resources. Acknowledging that in our numbers isn't just about giving environmentally-friendly countries a pat on the back. It's a real indication of how well-prepared a country is to deal with costly constraints.Apparently these days it takes a druid and Tarot grandmaster to point that out to all the Ivy League B-school grads on Wall Street. Strange times.