Incentives and Growth: An Appraisal

The papers at this conference have covered a wide span. The most common element, though, is clear. Large distortions of prices from those that would prevail in an unregulated market will usually reduce economic efficiency and so retard the growth of national income. It is of course recognized that economic efficiency is not the only possible goal of an economy, so that some trade-offs are possible, for example to relieve poverty or to increase the stability of income over the business cycle or over a worker’s lifetime. But ultimately all economic goods, including relief of poverty and the stabilization of income, are charges on the national income, so that a higher level and a more rapid growth of income is desirable and important for the achievement of all aims.