The Conflation of Productivity and Efficiency in Economics and Economic History

The literature of comparative economics as well as economic history is replete with references to productivity differences as reflecting relative efficiency in production. In socialist economics, for example, the longevity of the relative-productivity/relative-efficiency theme is apparent from Abram Bergson's (1948) early survey where, commenting on a productivity debate that had already been going on for over twenty years, he identified “the only issue outstanding†as the question “which is more efficient, socialism or capitalism?†The issue has continued to be addressed vigorously since then, and it is still outstanding. Again, in European economic history, John Nye (1987) recently pointed out that relative efficiency as reflected in relative productivity has been part and parcel of the postwar debate on French industrialization: the view that less productive and, therefore, “inefficient†family firms led to French “backwardness†in production.