248: Solving the Productivity Paradox
The Missing Variable Is Care
Productivity has stalled at the precise moment our tools have become most powerful. That contradiction is usually described as a puzzle. It isn’t. It’s a warning signal that we’re measuring the wrong things and neglecting the only domain that actually multiplies our collective capacity: care.
For four decades, digital technologies have advanced at exponential rates. Processors, memory, networks, sensors—each generation has consumed less energy, delivered more compute, and scaled across every sector. Yet in the same span, productivity growth in advanced economies has slowed or flatlined. The OECD, the U.S. Bureau of Labor Statistics, and countless academic studies have documented this pattern in granular detail. Infamously named “the productivity paradox” as “you can see the computer age everywhere but in the productivity statistics.” (Robert Solow, 1987).
Most explanations look inward to technology: mismeasurement, lag effects, diffusion bottlenecks, organizational inertia. But the missing variable is not inside the machine at all. The missing variable is the erosion of our capacity to care for one another, our families, our communities, and our institutions. If productivity is low, it is because care is low.
This is the inverse of how economists usually frame care. In conventional models, care work is categorized as low-productivity labour—difficult to automate, resistant to scale, and slow to yield measurable output. That framing is both analytically wrong and politically damaging. Care is not a drag on productivity. It is the substrate that makes productivity possible. When care collapses, everything else does too.
Consider the everyday indicators. Work/life balance has deteriorated across the OECD. Burnout is now a structural condition, not a personal failure. Wealth inequality has grown to levels comparable to the Gilded Age, and poverty rates in many countries are rising. These are not disconnected phenomena. They are symptoms of a collapsing social infrastructure: the web of relationships, services, routines, and institutions that maintain human well-being. When people lack stability, rest, nutrition, connection, and mutual support, they cannot produce—no matter how powerful their tools are.
The result is a world where individuals face mounting cognitive load while institutions rely on surveillance and automation as substitutes for care. Instead of building systems that support human flourishing, we build systems that attempt to route around human frailty. Technology becomes a surrogate for care, a way to manage the fallout of frayed relationships and overstretched households. We stare at screens because we have fewer places to turn to each other. The devices work perfectly; the social substrate does not.
This is why productivity stagnates. Care is a multiplier. When it is strong, everything else accelerates: learning, collaboration, creativity, resilience, and yes—economic output. When care is weak, everything else slows, no matter how many new tools we introduce.
This is nowhere clearer than in agriculture. Industrial farming has spent a century treating living beings—soil, plants, animals, and farmers—as if they were components in a machine. The machines are impressive: combines with advanced telemetry, tractors with precision guidance, sensors that can measure micro-variations in soil moisture. But the living elements of the system have been depleted. Soil organic matter is declining globally. Biodiversity has cratered. Farmers face staggering mental-health burdens. The optimization of machines has not translated into the optimization of life. And productivity in agriculture, once a driver of national growth, now delivers diminishing returns.
The same pattern appears across the economy. Health systems adopt ever more sophisticated diagnostic tools, but fail to support exhausted nurses. Schools adopt digital learning platforms while cutting the staff who build relationships with students. Logistics networks rely on predictive analytics while burning out workers whose tacit knowledge cannot be automated. Everywhere we see powerful tools operating atop weakened human foundations.
The paradox dissolves when we acknowledge the role of care. Productivity is not the output of workers using machines. It is the emergent property of a cared-for population using tools in a cared-for environment. Care strengthens cognition, attention, judgment, adaptability, and trust—all the elements that make complex systems work. Without them, productivity collapses.
The future of productivity is not bigger models, more sensors, or faster chips. Those tools matter, but they are amplifiers, not origins. The origin is care: the daily actions through which we maintain human well-being and social cohesion. If societies want the exponential benefits of technological innovation, they must invest exponentially in care infrastructures—childcare, elder care, community health, food systems, public libraries, parks, culturally rooted mutual aid networks, and the everyday relationships that bind people together.
Care is not an expense. It is the highest-return investment a society can make. And yet it remains the area of greatest austerity. The productivity paradox is a political choice.
If we want to solve it, the solution is embarrassingly clear: treat care as the central economic engine of the twenty-first century. Design policy around human flourishing rather than mechanical efficiency. Build institutions that nurture instead of extract. Recognize that the flaw at the heart of industrial civilization has always been the same—its tendency to treat living entities as machines.
If we stop treating life as machinery, productivity will rise. Not gradually, but rapidly. Because the multiplier has been waiting for decades. It simply needs care to activate.
Tiktok failed to load.Enable 3rd party cookies or use another browser