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The power of productivity

Martin Wolf in today's Financial Times:

Free and fair competition sounds simple to achieve. Nothing is further from the truth: competition upsets intellectuals who glory in the notion of state benevolence, bureaucrats who administer government programmes, businesses that receive state favours and, in short, all those who gain, directly or indirectly, from distortions. Competition benefits often-despised outsiders against those who are well-connected and entrenched. It also requires the courts and government to work honestly. The surprise may rather be that some countries became rich than that so many are poor.

He is commenting on William Lewis's book, The Power of Productivity. Lewis has some great graphs - you might also want to check out the summary of his book at McKinsey Quarterly (thanks to MQ for guest access, registration still required).


Submitted by R-Squared on
Do we have any examples to show that this is the fact? The growth of four tigers was mostly driven by capital deepening, not by productivity growth. Yeh, they had crisis. But crisis didn't send them back to poverty, did it? Things that work perfectly well in theory may not work in practice.

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