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Published online by Cambridge University Press: 07 November 2014
An interesting analysis of productivity in Canada from 1931 to 1949 has recently been published by Mr. A. Maddison in the Economic Journal. Mr. Maddison admits, however, that his choice of dates, which was limited by the lack of official estimates of the employed labour force prior to 1931, is unfortunate in that a strong cyclical influence colours the results. To overcome this difficulty calculations have been made of the employed labour force prior to 1931 (see Table III), thus extending the period that can be covered back to 1926. In addition this paper makes use of revised and more complete data published by the Dominion Bureau of Statistics. No attempt is made to duplicate Maddison's excellent summary of the diverse factors contributing to productivity, or his brief look at inter-industry shifts, except for the very important shift of labour from agricultural to non-agricultural employment. But more emphasis is placed on aggregate movements during particular periods and on the comparison of productivity in Canada with that in the United States. In brief, the two papers are complementary, and should be so considered.
Productivity is, of course, an elusive concept when applied to operations of more than one industry, or even to more than one line of production. Is an automobile, for example, really worth 1,000 bushels of wheat in terms of economic value, and is the productivity of a farmer low because he can produce only 2,600 bushels of wheat in a year on 100 acres, whereas the average automobile worker turns out perhaps 10 cars a year, worth 10,000 bushels of wheat or more? Yet the only way in which products can be compared is through the exchange values attached to them in the market. Any attempt to evaluate productivity on a national scale must therefore involve the weighting of goods produced according to the prices at which they were sold. The most that can be done to place production figures on a real basis is to attempt to eliminate variation in prices; and thus determine the extent to which the total volume of production of all goods in the economy, weighted according to their price relationships at some specific point of time, has grown over a period of years. In the discussion that follows, therefore, the gross national product in 1935–9 dollars is used as output. It would perhaps be better to use national income, but this is difficult to deflate in view of the inclusion of indirect taxes in price indices.
1 Maddison, A., “Productivity in an Expanding Economy,” Economic Journal, LXII, no. 247, 09, 1952.Google Scholar [A note by Mr. Maddison on productivity changes in certain industries appears elsewhere in this issue. Managing Editor.]
2 The proportion of the working force employed in agriculture was 21.1 per cent at June 1, 1950, and 17.7 per cent at June 1, 1952; see Bank of Canada, Statistical Summary, 08, 1951 Google Scholar and Sept., 1952. Figures in the Aug., 1951 issue cover an estimate of employment in Manitoba in 1950, which has not been included in official surveys issued by the Dominion Bureau of Statistics because of the disruption to normal activity caused by the flood of that year.
3 Delivered to the Fourth Annual Conference of the Industrial Relations Centre, McGill University, April 21, 1952.
4 Queensland Bureau of Industry, Review of Economic Progress (Brisbane), 04, 1949.Google Scholar
5 Ibid., March, 1951.
6 A. Maddison, “Productivity in an Expanding Economy.”
7 Wall Street Journal (New York), 10 17, 1952 Google Scholar and, for Canada, D.B.S., 1951 Census Bulletin, 6–3, vol. IV, Table 24 (Ottawa, 1952).Google Scholar
8 Evans, W. D. and Hoffenberg, M., “The Interindustry Relations Study for 1947,” Review of Economics and Statistics, XXXIV, no. 2, 05, 1952, 97–142.CrossRefGoogle Scholar
9 The industries have been arbitrarily classified so as to emphasize the structural differences between the two economies. In some cases the decisions made as to classification may be hotly challenged. “Petroleum and coal products,” for example, is treated as a secondary industry even though it includes the value of coal and oil “mined,” since the major proportion of the gross value of production of this industry arises from petroleum refining. Similarly “Non-ferrous metals, mining and refining” may not be considered by some to be a primary industry entirely.
10 Bauer, P. T. and Yamey, B. S., “Economic Progress and Occupational Distribution,” Economic Journal, LXI, no. 244, 12, 1951.Google Scholar
11 By applying 1939 output per man in agricultural and non-agricultural employment to 1950 employment figures, the over-all output per man-year that would have resulted without any increase in productivity in the individual sectors can be ascertained. Taking the resulting Canadian figure as a percentage of the American, the degree of improvement chat would have occurred from the relative shift of employment may be compared with that which actually took place.