B - A look forward

Summary

The effectiveness of an economy's behavior and organization is often described and evaluated by the terms product and productivity. These terms have been the more welcome to economists since they appear superficially but delightfully to yield themselves to scientific measurement – and not only to aggregative measurement, but also to partitioning and an attribution of the relative contributions of various elements to the whole, statically and over time. So they have, despite pious denials, appeared to be suggestive of causation, prediction, and operational significance. In the ambitious phases of their careers, even thoughtful economic historians have embraced these concepts. An earlier generation constructed the income and product series and discovered thence much new knowledge of features in the operation and growth of national economies. Now a second or third generation has pushed bushels of the fathers' painfully garnered historical statistics into the hungry furnaces of aggregate production functions and extracted therefrom light, heat, and ashes, assessed at various levels of significance.

Yet to many of the older and even of the intermediate generation, aging now and relieved of excessive pressures to publish (or even to be respectable), philosophical doubt creeps in. This paper reflects on the mysteries of productivity growth as revealed through the formulations and measurements of the identities of national income accounting.