From: brian@bkj386.uucp (Brian Jenkins)
Subject: Re: free trade, memory prices, memory wholesalers
Organization: Chaos in the Basement
Date: Thu, 12 Nov 92 08:53:33 GMT

In article <1992Nov9.004241.17339@alchemy.chem.utoronto.ca> mroussel@alchemy.chem.utoronto.ca (Marc Roussel) writes:
>In article <BANKER.92Nov6121204@ptd4330a.erim.org> banker@ptd4330a.erim.org
>(Jeff Banker) writes:
>>Marc Roussel writes:
>>>> As far as anyone can tell, computerizing the workplace has done almost
>>>> nothing for productivity.  What makes you think that cheaper RAM will
>>>> change that?
>>
>>You must be on a different planet.  FAX machines, email, LANs, etc. have 
>>increased productivity dramatically, not to mention desktop, laptop, and
>>palmtop PCs.
>
>     Pick a quantitative measure of economic activity.  (Pick your
>favorite one; this has been done with almost all of them with uniformly
>negative results.)  Measure the overall productivity of a representative
>sample of businesses both before and after computerization using your
>chosen metric.  Average over a long period in order to wash out
>transitional effects and other fluctuations.  Studies using this sort of
>careful methodology have shown, almost every time, that computers do not
>improve productivity except in some special cases (industrial robots,
>computers used in design work, etc.).  These special cases are almost
>always of such a nature that the productivity increases come from
>replacing workers, not from increasing the productivity of individual
>workers.  (In other words, the machines do things that people would have
>done; the remaining workers do more or less the same things they did
>before and generate essentially the same economic outputs.)

I do not know that I really comprehend these comments at all.  I am
an actuary.  Amongst the things I do is assess the value of pensio plans
and determine how much money should be set aside to ensure the benefits 
will be paid.

Back in the 1950's the actuary's prize possession was his hand-written
hand-calculated "commutation tables" an excercise that you likely be,
for a simple plan about 1 man-month of work.  This was state of the art
since the introduction of electro-mechanical calculators (ever see one
of those suckers).  At this time, Canada's first big computer was
being constructed from tubes is an hangar at what is now Pearson airport
(it filled the hangar).

In the 1960's life got a little bit easier because "photocopiers" came
out and you could at least copy the suckers.

In the mid-1970's computers were starting to become more available.
When I started working fulltime, one of the first things I was given
to do was to compute one of these tables (for long term disability
policies -- about 3-4 man months of work).  I wrote one of the first
Fortran (ugh!) programs to compute these suckers.

Nowadays, no-one stores paper copies of this stuff.  Just run another
sucker off on the computer.  The work we do now is exceedingly more
sophisticated -- and the law requires it -- than could have been done
40 years ago.

This has happened all over.  I don't buy this argument in the least --
or your time span is abysmally short.


>     By and large, computers don't increase productivity.  Has your bank been
>able to reduce its staffing requirements because of computers?
>Probably not.  While you may be doing more banking through a machine,
>when you do need the services of a teller, you spend more time.  (I
>wish I could give a reference for this; sometime in the last five years
>or so, the Globe actually did a survey and found that the average
>transaction time at a teller had gone up by a factor of more than two
>since computerization.  The number of teller transactions went down by only a
>small percentage.  The number of total transactions (automated and
>teller) went up faster than the number of dollars the banks handled.)
>Even if the bank was able to reduce its teller staff, it now needs a
>larger DP department since the computers are bigger and even more
>critical than they were before front-line computerization.  You are
>however able to carry out transactions you couldn't have done before
>computers appeared at the teller stations (multi-branch banking for
>instance).  Those of us who understand what computers can do should be
>careful not to promise productivity increases when there will in all
>likelihood be no such increases.  

This is another one that is not really true.  Having watched the 
automation of the banks in the 1980's -- and watched the demographics
of employed population -- the number of tellers was falling at
a rate of about 10% per year (this is absolute, not relative) for
at least 5 years that I looked at, _and_ they went  from 100%
working full time to an average utilization of about 75% of full time.

>                                     We should rather point out that
>computers allow us to do things we simply couldn't do before; that is,
>most of the time, the only thing you can expect.

No, I don't buy this either.  The expansion of ability is marked.
The "productivity" gain is not what the pundits of the 1960's projected
but it has been incredible.  Fly in an airplane at a busy airport and 
not collide, phone long distance, rate your cars gas mileage, and on and
on.  That is productivity gain.

From a macroeconomic point of view, productivity as defined, is masked
to a large degree by the amount of structural unemployment being
created and by other economic problems.  I also think that the shift
towards an information/service economy (non-"productive") from an
industrial ("productive")market and government manipulation via
monetarist policies from Keynesian have screwed up the classic
measurement system -- but the economists disagree.  But take compounded
productivity gains of about 2% p.a. in the 1960's and 1970's, and maybe
0.25% since 1980 and you are still talking over a 50% productivity
increase (about 1.4% per year).  Remove the unemployment and the other
"non-productive" influences and I am sure that the result is much
higher.

>
>				Marc R. Roussel
>                                mroussel@alchemy.chem.utoronto.ca

-- 
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from the basement of               brian@bkj386.uucp
Brian Jenkins             
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