Productivity, Wages, and National Income

Excerpt

Some years ago the Brookings Institution began a comprehensive series of investigations of the relation of the distribution of income to economic progress. The primary purpose of these studies was not to find an explanation of the business cycle or a cure for depressions, but rather to determine whether there might perhaps be some deepseated maladjustment in the economic organism which was serving continuously to restrain or retard the rate of economic expansion. In short the task set was nothing less than a general re-examination, in the light of modern developments, of the operation of the capitalistic system of wealth production and distribution.

In the first two volumes we studied respectively the producing capacity of the American economic system and the consuming capacity of the American people. This was followed by an analysis of the bearing of the distribution of income upon the rate at which new capital is created. The final volume of the original series discussed in a general way the various alternative methods whereby currently produced national income might possibly be more widely diffused, and concluded that the most advantageous means of broadly distributing the benefits of technological progress was by reducing prices in line with increasing efficiency in production.

In a subsequent study entitled "Industrial Price Policies and Economic Progress" the potentialities of, and the practical difficulties involved in, the price reduction method of disseminating the benefits of increasing efficiency in the field of industry under present-day conditions was canvassed. The conclusion was reached that the method is in harmony with the system of private enterprise for . . .

Additional information

Contributors:
Includes content by:
  • Dwight F. Davis
  • Dean G. Acheson
  • Edwin G. Nourse
Publisher: Place of publication:
  • Washington, DC
Publication year:
  • 1940

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