Productivity and American Leadership

Productivity and American Leadership brings together the earlier writings of Baumol, Blackman and Wolff (BBW) on productivity growth and applies their central ideas to the question of long-run economic growth in the U.S. and the challenge the country may now be facing. Although at one time the authors were very gloomy about U.S. prospects, the present book marks a change. They now believe that U.S. prospects are reasonably good, and although they emphasise that the retention of U.S. leadership will not be automatic or easy, they are guardedly optimistic about the future. The U.S. faces a serious challenge, but it is still the world's leader in many areas, and with a determined effort it can retain this traditional position. This is the central message of the book. This book is a tour de force, both in the sweep of its ideas and in the depth of its analysis. It makes a vigorous defence of the benefits of economic growth and describes and analyses a century of productivity growth in the U.S. and other countries. It explores the dynamics of service sector employment and the rise of the so-called information economy. In addition, it has chapters on such diverse topics as education and economic development, natural resources and the measurement of productivity. These items are all treated in a careful and professional way, but to make the book accessible to the non-specialist much of the technical detail is wisely relegated to appendices, which occupy over a hundred pages. It is impossible within the space of a single article to do justice to the whole of this book, so I shall confine myself to three key areas: (1) unbalanced productivity growth and its implications for relative costs and the structure of employment; (2) the convergence hypothesis; (3) U.S. economic leadership.