Nipawin - December 31, 2000 - by: Mario deSantis


Economic productivity as per capita GDP seems to be a bit misunderstood by our economists.
Alan Greenspan, Chairman of the Federal Reserve Board and the most powerful man in the
business, finance and stock market, is confused about our economic productivity. And if he is
confused, then all of his followers-bankers, stock speculators, and the corporate world-are all
confused as well.




Yes, we live in a state of confusion and we don't know whom to believe anymore, and the
resulting conclusion is the omnipresent vision to believe in the Almighty Dollar(1)! The
Almighty Dollar is replacing our thinking and our hearts, and we are all brainwashed to look
for money, everywhere and at any price. I have been very conscious of this destructive
philosophy that "Money Talks" and when my son James decided to go back to school in
1995 and take business courses through Athabasca University, I mentioned to him how
confusing life can be. And, after reading the preface of his accounting textbook, I showed
him an excerpt from this book which stated that ethics is just like navigating an ocean, you
choose your own course, that is as to say that ethics is a personal affair, be good, be bad, or


be ugly.



follow the money

Now, I ask myself how we can have a vision of where we are going if we follow the money
vision within any ethics, be good, be bad or be ugly. It is absurd to have such a vision, to
believe to any professor you listen or to believe to any textbook you read. Therefore, I gave
James the book "The Fifth Discipline(2)" and I told him that this was going to be his business
Bible. James read this book, and we have been happy ever since!



information technology

As I was saying, even Alan Greespan is confused about the notion of economic productivity,
and last July, while speaking at the national meeting of American Governors, he stated that
"the major contribution of advances in information technology and their
incorporation into the capital stock has been to reduce the number of worker
hours required to produce the nation's output, our proxy for productivity




This statement doesn't reflect the experience of the American economy. American Paul
Strassmann, a consultant to some of the largest corporations on the planet(4), has pointed
out the following:
"Contrary to expectations of the productivity proponents, the revenue per staff
dollar has not increased. It has declined for a period of steady productivity
decline from 1989 through 1996. The recent reversals in this productivity trends
reflect mergers and consolidations, a strengthening of the dollar currency, and
the highest real interest income due to lower inflationary expectations. That has
little to do with computerization and much with reorganization and a cyclically
favorable state of the economy. The fact is that in 1989 one dollars' worth of
staff expense supported $7.50 dollars worth of revenue, whereas seven years
later - after a period of sustained computerization - the same dollar supports
only about $5.30 of revenue(5)"



relevant indicator

Whom to believe? Greenspan or Strassmann? As I am concerned, I believe in my own and
shared common sense, and that in our knowledge economy, no matter how sophisticated this
economy may be, there will always be low skilled jobs such as cashiers, janitors, retail
salespersons, waiters, and waitresses(6). Therefore, productivity, as per capita GDP, is not a
relevant indicator for our social and economic growth anymore and this observation is
confirmation that we must develop new indicators to measure the performance of our
knowledge economy.
  Quote by Donella Meadows "challenging a paradigm is not a part-time job. It is not sufficient to make your point once and then blame the world for not getting it. The world has a vested interest in, a commitment to, not getting it. The point has to be made patiently and repeatedly, day after day after day" The Global Citizen,
  List of relevant social articles


Money Talks, Mandatory Voting and our Democracy, by Mario deSantis, December 23, 2000




The Fifth Discipline: The Art & Practice of The Learning Organization, by Peter M. Senge, Currency Doubleday. Books by Peter M. Senge:




Remarks by Chairman Alan Greenspan, Structural Change In The New Economy, before the National Governors' Association, 92nd Annual Meeting, State College, Pennsylvania, July 11, 2000




US consultant recommends measurement of 'knowledge capital' before outsourcing, by Nick Gentle, 10 November, 1999




Facts and Fantasies about Productivity. Excerpted from Information Productivity, by Paul A. Strassmann




Productivity is the wrong thing to measure, by Mario deSantis, December 25, 2000
  You can read about the background of Alan Greenspan at the web site for the Federal Reserve.
  A simple and straightforward discussion of the issue of knowledge management in the form of an interview with Paul Strassmann
  Paul Strassmann's home page.