Growing Prosperity: The Battle for Growth with Equity in the 21st Century

To many observers, the strong performance of the U.S. economy in recent years may seem mysterious. Most mainstream economists credit the Wall Street-Pennsylvania Avenue Accord, ""based on balanced federal budgets, free trade, flexible labor markets, and a firm monetary policy,"" for our economic success. While acknowledging the benefits of these factors, Bluestone, a professor of political economy at Northeastern University, and Harrison, who until his death last January was a professor at Harvard's Kennedy School of Government (coauthors of The Deindustrialization of America, etc.), find the source of our growth elsewhere, in increased productivity. They begin by examining a perplexing period in American economic life, between 1973 and 1995, in which productivity growth was a mere 1.2%. The conundrum is how to explain the rise in productivity growth to 2.0% since 1996. Bluestone and Harrison claim that the increase and resulting gains in GDP have occurred as a result of improvements in information technology. As in their previous writings, the authors challenge conventional thinking. Unrepentant Keynesians, Bluestone and Harrison argue persuasively for replacing the Wall Street model with pro-Main Street policies, contending that renewed government investment in research and development and infrastructure, the promotion of liberalized trade with environmental and worker protections, rising wages and greater employment security can advance social justice and economic growth simultaneously. (Jan.)