efficiency and the economy

[mellowtigger]

I recently read an article from that "post-autistic economics" movement that I mention occasionally.  It spoke plainly about an idea that I hadn't considered in quite the same terms before.

"The Efficiency Myth"
Efficiency, it seems, is entirely contextual. ... So I hate efficiency because it feels and looks like a fool’s game. I say keep something in reserve. Because you never know. ... The problem is that other people adore efficiency. But uncertainty is relentless. And the past no map for the future. So learning and adaptation are necessary for survival or growth. Whereas efficiency allows for neither.
- http://rwer.wordpress.com/2011/03/16/the-efficiency-myth/

I think they're trying to tie "efficiency" to the often used economics term "productivity".  I doubt the common wisdom of measuring economic health in terms of worker productivity, and I blame the efficiency game for some of that error.  While I think that efficiency and productivity are related, I'm having a hard time isolating what exactly they are in my mind, how they differ, and why I feel this confusion in the first place.  Do my readers have any ideas?

I agree that it's wise to "keep something in reserve".  As I've been saying recently, I disapprove of conditions that require workers to "wear too many hats".  Or, in yet another common phrase, "jack of all trades, but master of none".  I think there's a long-term danger in keeping people so busy that they can't either rest (stockpiling for the next surge) or experiment (learning for the next new scenario).

I think I'm trying to figure out the Virtues Of Inefficiency.  I think that dictatorship is a lot more efficient than democracy... but surely there are virtues to be found in such inefficiencies?  I don't know.  Thoughts aren't flowing well tonight.

Comments

[maradydd.livejournal.com]

I think the article's actually talking about the efficient market hypothesis (http://en.wikipedia.org/wiki/Efficient-market_hypothesis). It also alludes to, but doesn't explicitly come right out and talk about, extending Hayek's economic calculation problem (http://en.wikipedia.org/wiki/Economic_calculation_problem) to market economies.

[mellowtigger]

Interesting. I've heard of ideas from the economic calculation problem mentioned in previous years when people described the soviet collapse, but it's good to find an actual name to the concept.

Reading some of the comments to that original article have helped me a little this morning, but I'm still unsure of the article's primary intent. Some of those comments eventually led me to a 2009 TED talk from Bernard Litaer. His presentation also addresses the idea that economic sustainability requires a balance between efficiency and resilience. This concept seems appropriate to "post-autistic economics", so perhaps this preconception is why I seem determined to pursue my mental detour.
http://www.youtube.com/watch?v=nORI8r3JIyw

I think the video is an overview of an article that delves into his mathematical model of inefficiency as a long-term virtue for ecological sustainability. (Link in the other thread in this post.)