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Should Productivity Be a Social Priority?

In: The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity

Author

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  • Joseph Heath

    (Canada Research Chair in Ethics and Political Economy, University of Montreal)

Abstract

In 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.

Suggested Citation

  • Joseph Heath, 2002. "Should Productivity Be a Social Priority?," The Review of Economic Performance and Social Progress, in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity, volume 2, Centre for the Study of Living Standards;The Institutute for Research on Public Policy.
  • Handle: RePEc:sls:repsls:v:2:y:2002:jh
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    File URL: http://www.csls.ca/repsp/2/josephheath.pdf
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    Citations

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    Cited by:

    1. 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.
    2. Andrew Sharpe, 2007. "Three Policies to Improve Productivity Growth in Canada," CSLS Research Reports 2007-05, Centre for the Study of Living Standards.

    More about this item

    Keywords

    Social Priority; Productivity; Social; Labour Productivity; Labor Productivity; Growth; Free Lunch; Redistribution; Poverty; Consumption; Happiness; Competitive Consumption; Positional Goods; Externalities; Leisure; Welfare; Satisfaction; Living Standards; Quality of Life; Public Goods; Wants; Needs;
    All these keywords.

    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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