Should Productivity Be a Social Priority?
In: The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity
AbstractIn this chapter, Joseph Heath argues that we tend to overestimate the contribution that further productivity growth will make to the welfare of Canadians. Traditionally, productivity growth was thought to contribute to increased leisure time, greater consumer satisfaction, the elimination of poverty and greater public support for redistributive efforts to narrow social inequality. While accepting that such benefits have flowed in the past, Heath argues that in the last 25 years, productivity growth has contributed less and less to the well-being of Canadians. The key puzzle for Heath is why further economic growth does not lead to greater happiness. In attempting to solve this puzzle, he canvasses three currents of thought in the literature. One possible explanation is that increased consumption does not generate lasting increments in welfare because the process of satisfying our desires generates new desires. A second explanation, which Heath describes contends that consumption not only satisfies needs but also communicates status, class, upbringing and tastes. A third possible explanation draws on the work of Fred Hirsch, who argued that the supply of some goods such as waterfront property, which he labels positional goods, is fixed.
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This item is provided by Centre for the Study of Living Standards & The Institutute for Research on Public Policy in its series The Review of Economic Performance and Social Progress with number v:2:y:2002:jh.
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Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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- Andrew Sharpe, 2004. "Exploring the Linkages between Productivity and Social Development in Market Economies," CSLS Research Reports 2004-02, Centre for the Study of Living Standards.
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