My problem with the “making everyone more productive” is that it’s a feel-good propaganda for the individual. Most capitalist see people as an expensive cost to be eliminated. Thus all the company shares going up when they announce layoffs.
The market can only absorb so much new products, so if productivity increase, companies will reduce headcount as much as possible to increase margin for the same income, not grow their product or production to make use of their staff.
(See any wage/productivity graph)
Government will also likely follow the same path of reducing headcount instead of producing better / faster outcome for their citizens (except the internal surveillance apparatus. The one never shrinks).
The market can only absorb so much new products, so if productivity increase, companies will reduce headcount as much as possible to increase margin for the same income, not grow their product or production to make use of their staff.
(See any wage/productivity graph)
Government will also likely follow the same path of reducing headcount instead of producing better / faster outcome for their citizens (except the internal surveillance apparatus. The one never shrinks).