America’s Political Economy: The Inefficiency of Construction and the Politics of Infrastructure


Adam Tooze over at his website:

One of the basic legitimations of capitalist growth and politics in capitalist democracies is productivity improvement. This can be disruptive. It can force social upheaval and creative destruction. But the triumph over scarcity – more for less – is hard to argue with. As Charles Maier pointed out, productivism was one of the keys to stabilization of capitalist political economy in the mid-century. The question is how are those gains and that political benefit distributed, if productivity gains are extremely uneven.

The forces that make for productivity improvement are complex and multiple. But the most important technical changes – electrification, IT etc – are very general in their application. At varying speeds most sectors benefit from productivity gains. Of course, some of these gains have hidden costs (environmental for instance), which if they were properly accounted for might actually negate the apparent increase in productivity. But even on the most conventional measures of output there are some sectors that exhibit not progress, but productivity decline. Of these, one of the most important and politically consequential is construction.

As the FT’s Cardiff Garcia remarked already in 2014: “For the nearly half-century through 2012, annual labour productivity growth in the US construction sector averaged close to zero, and it has been negative for the past two decades.”

This matters because it structures the entire debate about public infrastructure and the capacity for public action, which is so urgent in the US. Whilst Silicon Valley offers a triumphant story of private sector innovation, the public sector finds itself discredited by association with the chronic inefficiencies of the construction sector and megaproject management.

More here.