The central problem of our economy for more than a generation has been that, although our productivity has grown more slowly than that of our competitors, we have seen annual wage increases of the same order as theirs. So our inflation has risen faster than in other countries and we have been able to maintain price competitiveness and full employment only by a series of devaluations which have further added to inflation and increased the pressure for excessive wage increases. In the era of North Sea oil it will be more difficult to devalue our currency to maintain price competitiveness. So unless we can keep wage increases close to the level of productivity increase we shall face rising unemployment and a further erosion of our industrial base.
Denis HealeyRelated topics
able annual base central close currency economy employment era erosion face faster full generation increase industrial inflation level north oil order pressure price problem productivity rising rise sea seen series wage competitiveness unemploymentRelated quotes
How could such industries as software, semiconductors, and computers have been so innovative despite historically weak patent protection? We argue that if innovation is both sequential and complementary-as it certainly has been in those industries-competition can increase firms' future profits thus offsetting short-term dissipation of rents. A simple model also shows that in such a dynamic industry, patent protection may reduce overall innovation and social welfare. The natural experiment that occurred when patent protection was extended to software in the 1980's provides a test of this model. Standard arguments would predict that R&D intensity and productivity should have increased among patenting firms.
Eric Maskin
Einstein is the only figure in the physical sciences with a stature that can be compared with Newton. Newton is reported to have said "If I have seen further than other men, it is because I stood on the shoulders of giants." This remark is even more true of Einstein who stood on the shoulders of Newton. Both Newton and Einstein put forward a theory of mechanics and a theory of gravity but Einstein was able to base General Relativity on the mathematical theory of curved spaces that had been constructed by Riemann while Newton had to develop his own mathematical machinery. It is therefore appropriate to acclaim Newton as the greatest figure in mathematical physics and the Principia is his greatest achievement.
Stephen Hawking
This sensitivity to the phenomena of recession and inflation is a symptom of an increased public awareness of both the need for and the attainability of economic progress. It is precisely because so much of current industrial and governmental practice can be better in the future that our meetings this year are focused on the broad problem of improving the performance of the American economy. However, as we go about the task of appraisal and criticism, it will be well to discipline our impatience for reform. In the measure that we avoid exaggerating our nation's failures or understating its successes, we shall make it easier for ourselves as well as for economists in other countries to see current needs and developments in a just perspective.
Arthur F. Burns
The right hon. Gentleman should be aware that, two weeks ago, I had an interesting meeting with an environmental campaigning group from the Soviet Union who openly admitted that the industrial policies followed in the past by the Soviet Union and many countries in central and eastern Europe had done a great deal of environmental damage. The difference is that those people felt that they had the power to change the policies to stop the destruction of their own environment. The policies of free-market economies which the right hon. Gentleman propounds have led to the pollution of the North sea and the Irish sea, the destruction of the rain forests in Brazil and Malaysia and long-term serious environmental damage by multinational companies all over the southern countries of this planet.
Jeremy Corbyn
I find it amazing now that my first economics class, taught by Alan Sweezy, used John Maynard Keynes's General Theory of Income and Employment as the textbook. Although this book is one of the most influential works of the twentieth century, it makes a really lousy textbook. Moreover, since I now regard Keynes's analysis as seriously flawed, it is surprising that I enjoyed the course so much. As a student, I appreciated the simple way that the Keynesian model explained the workings and failings of the overall economy. Especially appealing were the clever policy remedies, such as increased government spending and tax cuts, that Keynes recommended to combat unemployment. Too bad that I discovered later that the model was theoretically and empirically deficient!
Robert Barro
