In his famous book and TV series, Milton Friedman told the parable of the pencil. He told us it took the cooperation of many people who didn’t know each other. He said they might even hate each other. But they all came together to make a pencil.
Total factor productivity is like Milton’s Pencil. It brings us all together. For wages of non-college educated workers to rise, to secure state and local pensions, Social Security and Medicare, to keep up the stock market and house prices, we all need total factor productivity to trend up.
Total factor productivity is a type of average. So if one group is left behind, the average can’t go up. So we can’t afford to condemn each other. We have to make sure every group is included in the rising tide of total factor productivity. Total factor productivity is the key to bring together the factions in Fairfax County and refocus on how the schools can contribute to rising total factor productivity to keep wages of blue collar workers going up as well as the stock market and house prices.
We need to tie at least a small part of everyone’s compensation to total factor productivity just so they realize this is the key variable for economic prosperity. If you can’t remember total factor productivity, just think of it as the prosperity of all number.
The key to raising total factor productivity in education is math, science, computer programming, as well as vocational educational and the ability to manage as technology replaces skilled jobs with unskilled ones in some cases. This is easier said than done. The non-college educated bear the brunt of changing technology. So they have to receive help to manage. The schools need to prepare them for this type of adversity because that is what they’ve gotten since the Golden Age of Productivity ended in 1973.
Robert Solow of MIT won the Nobel Prize for proving that in the long run, only increasing total factor productivity could raise both the stock market and wages. This proof has only a little economics. It is mostly calculus. It is accepted and taught in textbooks at Brandeis, Chicago, MIT and everywhere else. It isn’t controversial. It is part of the national economic accounts because it is a form of accounting. I was taught by the accountants at Chicago, that even accounting had some theory in it.
