> Productivity measures have been pretty screwed since services became the dominant labour form.

That's not accurate. Productivity is at its most basic a measure of aggregate output for hours worked. That works for any kind of economic activity as it all boils down to dollars vs. time/person (blending in management and administrative overhead).

> If my dog groomer decides to charge me an extra 20% then her productivity has gone up by 20% - she is now producing an extra 20% of services per hour.

That's not how it works. Presumably if your dog groomer did that, she'd either be really good, or you'd switch groomers. Or if there were a scarcity of groomers, you might choose to groom your dog less often.

The amount of money made for the hours worked has to be viewed in aggregate as part of the overall market. If all businesses in a region raised their prices by 20%, and worked the same or less hours, that would be a sign that there's been a gain in productivity, because it eliminates opportunity cost and marginal utility tradeoffs and looks at the complete domestic market for all goods and services in an area.

> I have no proof of this at all - just an anecdotal gut feel. For every content producer where I work, we have 2 agile coaches, a LEAN coach, ...

I feel you. There are countless individual cases of waste and overhead in the private and public sectors. But I think this has almost always been the case in organized human endeavours. Think about the 1960s and 70s where there were football field sized rooms of typists, or layers upon layers of "strategic planners" (GM used to have a hierarchy 21 levels deep). Or the pervasiveness of sustenance farming in the early 1900s vs. the productivity of today's farmers. It really has gotten better.

In our industry for example, where I work (Pivotal) we do extreme programming and carry that philosophy of smaller teams, customer speaks with one voice, to content and product design. We will pair on each role, one from our company and one from the customer, so on a given mobile app, web content project, or web app (and I mean real commercial ones, from brands you probably know): 2 product managers, 1-2 designers, 4 developers/ops of which one is the anchor, maybe up to 2 part time QA. Maybe some support marketing people surrounding this team, and maybe 2-3 senior execs/managers around it between the customer and our own management. That's it. We can get a lot done in a few months.

I have also seen teams of 120 people attempt to do the same amount of results of our small teams in double the time.

Productivity stats mix the both and weigh down the whole sector, but imagine when the small team approach becomes widely used? This is what we are seeing more and more with IT outsourcing where the traditional outsources are getting slowly squeezed. It'll take many years, but it's hard to unsee better ways of working.

I agree that capital and headcount represents power in many large organizations but with the appropriate competition incentive and leadership, agility and time to market and cost are usually what lead to coups to the old order.

> Meanwhile, my leisure time productivity has exploded - I consume whatever media I want in whatever form I want whenever I want. I'm at the lower socio-economic end of my tiny middle-class ecosystem but my diet would be the envy of the kings of yesteryear.

I think that statistically in the USA, leisure time is mostly flat / slow growing the past few decades, and actually shrinking for those with more education as they work longer hours . Some interesting data here:
http://www.theatlantic.com/business/archive/2013/06/how-did-...

This seems to correlate with my theory in the OP that we have a knowledge distribution problem in the labour market. Fewer people know certain specialized things and need to work longer because of it.

> My point being is that we already have too much stuff in the world, and the existing system of trading labour for putting food on the table just encourages more stuff... But I have no idea what the solution might look like.

One person's stuff is another person's food - even if there is waste, someone does have to actually make/harvest/move/package/market the stuff eventually. But I get your point.