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Counting lines of code is so widely used as a productivity metric because it's one of the few easily-measurable aspects of software engineering.

Customers typically don't care about how your product works. When they meet with you to see what progress has been made, it's very hard to show that you've spent two weeks connecting a GUI with some back-end database connections. So the LOC metric is used to show progress in cases when it is impossible to show actual functionality.

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