Book contents
- Frontmatter
- 1 American Macroeconomic Growth in the Era of Knowledge-Based Progress: The Long-Run Perspective
- 2 Structural Changes: Regional and Urban
- 3 Twentieth-Century Canadian Economic History
- 4 The Twentieth-Century Record of Inequality and Poverty in the United States
- 5 The Great Depression
- 6 War and the American Economy in the Twentieth Century
- 7 U.S. Foreign Trade and Trade Policy in the Twentieth Century
- 8 U.S. Foreign Financial Relations in the Twentieth Century
- 9 Twentieth-Century American Population Growth
- 10 Labor Markets in the Twentieth Century
- 11 Labor Law
- 12 The Transformation of Northern Agriculture, 1910–1990
- 13 Banking and Finance in the Twentieth Century
- 14 Twentieth-Century Technological Change
- 15 The U.S. Corporate Economy in the Twentieth Century
- 16 Government Regulation of Business
- 17 The Public Sector
- Bibliographic Essays
- Index
- References
17 - The Public Sector
Published online by Cambridge University Press: 28 March 2008
- Frontmatter
- 1 American Macroeconomic Growth in the Era of Knowledge-Based Progress: The Long-Run Perspective
- 2 Structural Changes: Regional and Urban
- 3 Twentieth-Century Canadian Economic History
- 4 The Twentieth-Century Record of Inequality and Poverty in the United States
- 5 The Great Depression
- 6 War and the American Economy in the Twentieth Century
- 7 U.S. Foreign Trade and Trade Policy in the Twentieth Century
- 8 U.S. Foreign Financial Relations in the Twentieth Century
- 9 Twentieth-Century American Population Growth
- 10 Labor Markets in the Twentieth Century
- 11 Labor Law
- 12 The Transformation of Northern Agriculture, 1910–1990
- 13 Banking and Finance in the Twentieth Century
- 14 Twentieth-Century Technological Change
- 15 The U.S. Corporate Economy in the Twentieth Century
- 16 Government Regulation of Business
- 17 The Public Sector
- Bibliographic Essays
- Index
- References
Summary
The growth of the public sector — that portion of the economy controlled by government — represents one of the most remarkable features of the economic history of the twentieth century. Growth has been relative as well as absolute. Despite the swift expansion of the American economy during nearly all of the century, the public sector has tended to grow more rapidly. This trend of public sector growth emerges regardless of the measure of government activity employed, and it holds for all levels of government.
Illustrative of the great shift in economic structure is the trend of all government expenditures —the sum of purchases of goods and services and transfer payments — at all levels of government. Prior to World War I, the government spent at a level approximately 7 percent to 8 percent of gross national product (GNP); by the 1970s government spending had reached nearly 40 percent of GNP.
The stunning increase took place in a largely discontinuous fashion; it was primarily the cumulative result of several rather discrete transitions (see Table 17.1). Each transition accompanied a major emergency in national life — a great war (including the Cold War) and/or severe economic depression. The emergencies appear to have had an “upward ratchet” effect, in that after the crisis, government spending stabilized at levels substantially higher than those that prevailed before the crisis. World War I was the first such crisis of the twentieth century, and it produced a sharp increase in the relative level of government spending, which held after the conclusion of hostilities.
- Type
- Chapter
- Information
- The Cambridge Economic History of the United States , pp. 1013 - 1060Publisher: Cambridge University PressPrint publication year: 2000
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