While I was doing research on the tourist economy of Jackson Hole, Wyoming,
Richard Douthwaite posted a message with the above title, among other
things saying:
Herman Daly > looked at the extent to which technology had already
increased factor productivity and found the results disappointing. He cites
a study by D.W. Jorgenson and Z. Grilliches (The Explanation of
Productivity Change, Review of Economic Studies, July 1967, pp 249-283)
which indicates that 96.7% of the increase in output between 1945 and 1965
had been due to simply increasing the use of labour, capital and/or energy.
Only the residual, 3.3% was possibly the result of technological advance or
a switch to quality. <
It's been ages since I read that article (if I really did: my memory is
going away). But I think the point is that such studies ("growth
accounting") are extremely iffy, being based on not only neoclassical
economics but some unreasonable auxillary assumptions such as that
"factors" are hired in competitive markets (and thus paid according to
their marginal products). Crucially, one's results depends on one's biases
("priors"). At that time, Jorgenson assumed that all growth could be
accounted for by factor input (i.e., zero residual), so it's no surprise
that his residual approximated zero. At a UC-Berkeley seminar, he was asked
why there were no nuclear power plants in the 19th century and answered:
the factor prices were wrong. In other words, nuclear power arose not
because of science but because prices changed, creating profits for those
interested in creating nukes. So I don't think one can trust that research
very much.
I really couldn't read all of what others on pen-l contributed, but here
are my two centavos: Is capitalism sustainable? I think the problem is the
bias in technical change, which under capitalism leans toward internalizing
external benefits (grabbing public resources for private hands) and
externalizing internal costs (dumping costs on society & nature). That's
what's profitable. Absent sufficient pressure from the people, it leads to
environmental disaster.
Concerning interaction with the other "big contradiction" of capitalism,
class relations, an environmental crisis -- like more "normal" economic
crises -- creates opportunities which might cause working-class
mobilization, reforming and/or abolishing the system. But such results are
far from automatic.
(BTW, our society has other contradictions, just as our society is more
than just capitalism. In addition, we see sexism, racism, etc.)
in pen-l solidarity,
Jim Devine [EMAIL PROTECTED]
http://clawww.lmu.edu/fall%201997/ECON/jdevine.html
Econ. Dept., Loyola Marymount Univ.
7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"Segui il tuo corso, e lascia dir le genti." (Go your own way
and let people talk.) -- K. Marx, paraphrasing Dante A.
