A century ago, Karl Marx in the last, unfinished volume of Das Kapital, based his most confident prediction of the “imminent demise” of what we now call “capitalism” (a term coined only after Marx’s death) on the “inexorable law of the diminishing productivity of capital.” Marx was repeating what every nineteenth-century economist before him had accepted as axiomatic. And if there is really such a “law” of the declining productivity of “capital” (or of any other resource), every economic system would indeed be doomed.
But by one of those ironies of which the muse of history is so fond, the continuous and purposeful increase of productivity through management was discovered just about when Marx so confidently predicted its “inexorable decline.” This discovery also explains why not one of the other “certainties” that were “scientific truths” for Karl Marx – the pauperization of the working class, the concentration of wealth in the hands of fewer and fewer “exploiters,” of the polarization of society between a very small of proletarian “wage slaves” – has occurred in the developed countries, countries that have developed managers and management.
The turning point was Frederick W. Taylor’s discovery, around 1875, that work could be managed and thereby made more productive. Before Tailor, the only way to get more productive output was to work harder and longer. But Tailor saw that the way to get more outputs was to “work smarter,” that is, more productively. He saw that the productivity of work is not the responsibility of the worker but of the manager. Taylor also saw – although he never formulated the insight into a theory – that productivity is the result of the application to work of the specific human capital resource, knowledge.
Taylor applied knowledge to human labor and, in accordance with the nineteenth-century realities, to manual labor. We now know that knowledge has to be applied to all resources: capital, key physical resources, time, and knowledge itself. Indeed, we now know that a valid theory of economics will have to be based on productivity as a source of value….
By now we know quite a bit about increasing productivity. We know that it is in part achieved by innovation, the shift of resources from old and declining employments to new and more productive ones. In part, productivity is increased through the continuous improvement of the productivity of the resources in existing employments. We know that we need to work on the productivity of each of the factors of production: capital, natural resources, time, and knowledge. But we know also that what counts in the end is total overall productivity of all resources in a given process, a given enterprise, a given economic employment.
And above all we know that productivities are create and destroyed, improved or damage, in what we call the “microeconomy”: the individual enterprise, plant, shop, of office. Productivities are the responsibility of management.
Fonte: Managing in Turbulent Times
