Welfare Quandaries and Productivity Concerns

The development of the Mixed Economy is at a very difficult juncture. An examination is made of the pronounced and worrisome retardation of productivity growth. Productivity growth is a useful focus of discussion in relation to the current problems and the accompanying reappraisal of the mixed economy for 2 reasons: 1. Productivity, viewed as a source of private earnings, exists in a state of tension with the other welfare objectives, which are pursued largely through the government; the more income that is diverted to social uses, the less of any given aggregate remains under the private control of income earners for their own personal use. 2. The amount of the diversion and the way it is made and used affects the level of output and productivity, present and future. Further pursuit of social welfare goals will have to be paid for out of smaller increments of output and income. So, there will be a more difficult problem of choice even if the growth rate itself were not affected by what is chosen. The impact choices on the measured growth rate itself becomes a more pressing concern and may go far to determine whether the projections now entertained are, indeed, ratified by history or belied. Appendices.