Efficiency over effectiveness

July 10, 2026

As Ross points out in our managerialist culture using the singular and obsessive focus of modern economics we have interprted “productivity” as simply producing more with less. It is a culture that focuses almost wholly around reducing costs for a given level of output. It can be summarised by the word “efficiency” in the narrow economists use of the word.

The problem with that is it has led western economies to their current ability to produce the wrong things as cheaply as possible. To lift our heads above the simplistic goals of Neo-liberal economics we must distinguish between efficiency and effectiveness. Efficiency can be summarised as “doing things right”, whilst effectiveness can be summarised as “doing the right thing”. In the west the economics professions narrow focus of efficiency has allowed China, with a far more strategic focus, to focus on both. That is why China, and other global south countries have achieved growth rates and increases in standards of living the West can only dream of.

We have become extremely efficient at doing the wrong things. We reduced costs dramatically in the short-run by outsourcing manufacturing to guess where? We are now paying the price for our short-sightedness!!