1. We have so far confined ourselves to the case where the Worker, the sole consumer in the economy, maximizes his 'instantaneous utility function' in each period subject to the condition that all his income is spent, without any time-lag, on current consumption of goods. He is a momentalist and does not see his demands for goods in various periods in their proper perspective. He has no dynamic utility function setting goods at different points of time against one another. The budget equation is satisfied period-wise with savings identically zero.
It is evident that if he were paid as well as ordinary workers in civilized countries are, he would more or less be able to abstain from current consumption of goods for their future use. He could calculate enjoyments and sacrifices at different times and find a consumption plan that gives the maximum satisfaction over time. The optimum schedule has to be balanced in the sense that the present (or capitalized) value of the stream of the Worker's expected incomes equals the present value of the stream of his expected expenditures; 1 but he is no longer required to arrange for income and consumption to be equal in each period. He would take full advantage of being allowed to making transient borrowing and lending. In fact, if preferable, he would lend some of his income to someone (say an entrepreneur) in some period on the understanding that it is returned in a later period.
Evidently, the possibility of saving and dissaving provides the consumer with a wider range of options; the best choice from this range will be an improvement on his previous choice when he is forced to live on his current income in each period. Although the DOSSO path may be recommended to the dictator or the Chairman of the economy as he is only interested in the scale of production in the 'final' period, it would not give an optimum path. The DOSSO programme is not designed to maximize the utilities of the citizens during the course en route to the final state; the unhappiest woman (I dare to use the superlative) would be the wife of a man who stakes his whole life on happiness and glory in his last moments.
2. In order to find an optimum growth programme we thus require a dynamic utility function which can serve as a criterion for judging welfare