It is often said that economics is the study of how we relate to scarce resources with alternative uses. There are only so many raw materials in the world, and they become what we collectively demand them to become.
A piece of land, for example, can do many things. It can be used for agriculture, growing food to feed and sustain a population. It can be used for manufacturing, where some mix of labor and technology is used to create a product — maybe a phone — as an output. It can be used by a tenant, as a place to live. Or it can be used to provide a service, say, like a retail store.
In all of these cases, what you are fundamentally trying to do is increase the productivity of that piece of land. You have some combination of natural materials, people and technologies that work for you, and maybe some money to feed the whole machine, and your goal is to use all of these tools to increase what you can get from the piece of land for the benefit of the end customer.
The degree to which nations and firms and people should value productivity in this sense is a highly contested issue. Some argue that it is the end-all-be-all. A few others argue that there are more intangible things that are worth living for, that make life better. Either way, it’s hard to deny that productivity doesn’t have widespread benefits. This kind of productivity, in fact, is the source of the abundance we see around us, from lowered levels of worldwide poverty to new innovations in technology.
On an individual level, productivity is necessary for the work many of us do on a day to day basis. After decades of trying to decipher the human mind and its behaviors, Sigmund Freud famously said that humans live for two things: love and work. But like love, work isn’t always straightforward. Although meaningful for many people, it can also be stressful. Work means labor, and labor inherently involves complexity and difficulty.
A big part of what makes work meaningful is the process itself. It’s the joy a musician feels when lost in the flow of a melody; the warmth a doctor or a nurse feel as they attend to a patient they know they can help. Things like that are obviously meaningful, and for many, they are the primary reason to do any sort of work. That said, quite often the process can’t be detached from the outcome. There might be a nice feeling involved in playing around with music or helping a patient, but it’s generally also important for people to, say, share that music with others as a production, or to ensure that the patient not only gets help but also survives and then thrives.
In economics, this outcome is what is measured by productivity. And what that productivity produces is value — in the form of either goods or services — and that value is then represented by money. But money isn’t scarce. Beyond raw materials, what is scarce is time. It puts a hard limit on what we can do, and that is why productivity, from an individual’s point of view, is often a time-management exercise. But is that really the best way to look at it?
Adam Smith, the father of modern economics, argued that the productivity of a nation is based on the size of the workforce, and the skills and abilities of that combined labor. Essentially, the more people you have, the more you can do, and the more knowledgable those people are, the more they can do.
Even applied to individuals, this makes sense, and it makes up the first two levers of individual productivity: energy and information.
A larger workforce means that more energy is applied to an outcome, and that is why it contributes to our productivity. In the modern technological world, where many of our tools do much of the hard labor, there is an argument to be made that larger isn’t necessarily better, but on a personal level, the amount of energy you can exert towards your personal tasks will determine what you get out of it. Not all time is created equal. We have different moods and emotions across the day, and much of this is affected by our energy levels, which are in turn primarily affected by our physical and mental health, and also by how we conserve energy by outsourcing our work to technology. Two people with different motivations and different energy levels will produce vastly different outcomes across the same amount of time.
Smith’s second lever of productivity, however, is just as important today as it was then, perhaps even more so. If you can’t throw sheer force at it with well-optimized energy levels, you can compensate with an information advantage. Information can provide knowledge, and knowledge gives us leverage to do more with less. It means you know how to better use your energy, because knowledge conserves much of it. A musician, for example, who complements their practice with theory from a tutor or a book will often get a better result than someone applying just pure energy to the task. Similarly, a doctor with 20 years of experience is far better equipped than a new resident in terms of knowing what to deal with and what to let go.
Both energy and information are fundamental to making things happen, whatever those things may be. Energy is what gives us the capacity to do work, while information tells us how to apply that capacity. Both of these can be applied in a way that produces returns that merely focusing on linear time management just can’t compete with. If you have more energy, you need less time to do something. If you have better information, you can figure out where the return on your time is the highest.
Both of these levers of productivity, however, are still primarily about efficiency in some way. They are about more. And in that sense, even though time isn’t our primary concern, in a way, the reason they provide an advantage in terms of productivity is that they allow us to manipulate time in a way that we can better predict and understand.
The last lever of productivity isn’t one that Adam Smith mentions in exact terms, but it’s perhaps the most important. And it’s one that doesn’t just allow us to become more efficient, but rather, it allows us to create an entirely new way of doing things. Rather than an improvement in local productivity, it’s a transcendence to a new level. And this lever is also the most opposed to a linear kind of time-management, because in part, it depends on wasting time.
Creativity, which is what allows us to transcend and innovate in this way — whether that be in the arts or the sciences or in the business world — is anything but linear in the way that we measure time. It’s a form of emergence that works best when we aren’t focused on anything work-related at all. Albert Einstein famously got inspired while letting his mind wander playing the violin or taking long walks. Leonardo da Vinci spent 15 years working on the Mona Lisa, which might have seemed like procrastination then but was obviously anything but that in hindsight.
The thing with this lever of productivity is that it can’t be entirely predicted. If it could, there would be no need to be inefficient in the time dimension. Wasted time is indeed wasted until a few connecting sparks of inspiration provide an insight that goes beyond what already is. And in doing that, it opens up doors that rethink the frame of reference that is currently being worked in. The late cognitive psychologist Amos Tversky, whose efforts went on to win a Nobel Prize, put it quite well when he said:
“The secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.”
In many ways, time is indeed our scarcest resource. Death is one of the few certainties in life, and being that time is the currency it steals, that makes each hour and each day precious. As we continue to make progress, the chances are that, until we hit the limits of what we can do with the natural energy available to us, we will increasingly move towards a world of abundance. But unless we overcome death itself, time will remain a hard limit.
That said, the way we experience time can’t necessarily be quantified. Not every hour, or day, or year, is the same, which means that it doesn’t make sense to think of our contributions or our efforts along this one dimension alone. Time may be our scarce resource, but we are more than economic machines, and we produce in ways that can’t be tied to time.
Energy allows us to do work. Information tells us how best to do it. Creativity inspires the jump that it takes to get to the next level. Combined, these three levers of productivity shape what we do and how we do it. They make things happen. When mixed and matched, they create a personal sense of time — one that produces not just an output, but also meaning and value.
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