Increase Your Productivity: How The Economic Machine Works

This video does a nice simplification of how the economy works. It traces productivity growth and the short and long-term debt cycles.

The viewer might learn something interesting about the role of credit and how the economy undergoes deleveraging. Between minute 8 and 10 there is also a depiction of what it is like borrowing against your future self. Throughout the video, the creators do a great job showing the individual transactions behind each curve (something that usually gets lost in the algorithms).

What had the greatest impact on me was the emphasis placed on productivity. Accumulated knowledge increases your productivity and this is what matters most in the long-run. Over time, an industrious person contrasts sharply with a lazy one.

The video assumes that productivity growth grows constantly, but at a slow rate. There is no cycle, and no exponential growth. I think the pace of productivity growth needs to be analyzed more closely as technology makes us increasingly efficient and productive.

Two of the three final remarks were also about productivity. Income cannot rise quicker than productivity. In any job, your role is to add value, and much more than that needed to pay your salary. In any occupation, the quality of your goods and services must be reasonably priced. If not, you price yourself out of the market and become uncompetitive.

When this happens, instead of becoming less productive, it might be a sign to look for something more challenging. There are other opportunities that you can use your increased productivity (and knowledge) to earn more income.

Unlike your credit worthiness, your productivity is always under your control. You choose either directly or indirectly to be more or less productive than the day before. A series of these choices create behaviors which eventually determine how much income we earn.


One response to “Increase Your Productivity: How The Economic Machine Works

  1. Interoperability is increasingly seen as critical for business success, but what is it? Simply put, it is the ability to work together.
    Interoperable organizations are those that can easily exchange information and subsequently make use of that information.
    Interoperability allows organizations to work without barriers and without extra effort with other systems or organizations.
    Individuals have already become highly interoperable, thanks to tools such as the social networks Facebook and Instagram, which both have hundreds of millions of users. These networks add value insofar as they promote communication and the exchange of information, making our lives feel more fulfilled. Without such tools, how would we keep in touch in a world where less time exists to socialize? Of course, connecting online shouldn’t be a substitute for face-to-face, but it does help us feel connected to something bigger than ourselves and to see other things happening around us more clearly.
    If you are interested, I have posted an article about Learning Innovation that you can read here:

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