If productivity can’t be measured (and it can’t, not really), how can we improve it?

July 8, 2026 — 5:00am

You have reached your maximum number of saved items.

Remove items from your saved list to add more.

The great new god of economics, productivity, may have feet of clay.

The modern world is a noisy place, but you’ve probably noticed the way economists now give speeches extolling the virtues of “increasing productivity”.

Such speeches were much rarer when I became an economic journalist in the 1970s. Why? Because, back then, productivity seemed to be improving a bit each year, the way we thought it should.

In more recent times, however, productivity seems to have faltered. Hence the speeches. The feds have even renamed one of our economic quangos as the Productivity Commission, these days led by one of our rising economic stars, Danielle Wood.

Think of it: a whole commission full of economists studying our productivity performance, what’s causing the deterioration in our performance and what we should be doing to improve it.

There’s just one small problem. John O’Mahony, a partner in Deloitte Access Economics (and a mate of mine) has just published a paper questioning our newfound obsession with productivity and the economics profession’s conventional wisdom that productivity and living standards are everything we should be worried about.

The economics profession has taken up with great confidence the........

© The Sydney Morning Herald