A Critical Introduction to Multi-Factor Productivity

When: Tuesday 3 November, 12:00-1:30pm

Where: Room 441, Social Sciences Building (A02), University of Sydney

Speaker: Phil Toner

Abstract:

This seminar both launches the new book Understanding Productivity (Routledge, 2026), edited by Phillip Toner and Roy Green and draws on one chapter to provide a critical introduction to the measurement and policy implications of Multi-Factor Productivity (MFP).

The talk describes the origin of MFP in Solow’s 1957 quantification of the neoclassical production function and sets out the simple arithmetic of how the ABS produces its MFP estimates. It is shown that the concept and measurement of MFP relies on a set of theoretical assumptions and data that the OECD (2001) Manual on Productivity Measurement, the primary methodological guide globally, identifies as both implausible and empirically falsified. Other Post-Keynesian criticisms are also briefly mentioned. MFP is also shown to comprise what in neoclassical terminology is ‘disembodied’ technical change; the main constituents of which are logically incompatible with the assumptions for MFP to be true. Despite dominating orthodox economic analysis and policy of productivity the main constituent elements of MFP imply it is, ironically, not subject to influence by policy. The talk concludes with a brief account of the main post-Keynesian alternative to MFP- the demand-side approach to productivity analysis.

Author: Adam David Morton

Adam David Morton is Professor of Political Economy at the University of Sydney. He is author of Unravelling Gramsci: Hegemony and Passive Revolution in the Global Political Economy (2007); Revolution and State in Modern Mexico: The Political Economy of Uneven Development (2011), recipient of the 2012 Book Prize of the British International Studies Association (BISA) International Political Economy Group (IPEG); and co-author of Global Capitalism, Global War, Global Crisis (2018) with Andreas Bieler. The volume Henri Lefebvre, On the Rural: Economy, Sociology, Geography was published in 2022 with University of Minnesota Press, co-edited with Stuart Elden.