ABSTRACT
This chapter begins by making five points. The first is that the United States is not a declining economic power plagued by a secular
fall in productivity. This widely held view seems to be supported by the long-term downward trend of total US output figures (GNP) divided by the number employed. But figures for the manufacturing sector of the American economy tell a different story. While productivity in the US economy as a whole at the beginning of 1979 was little changed from its 1973 level, productivity in the manufacturing sector increased by over 10 per cent. This increase is important because the manufacturing sector is the producer of real wealth in modern industrial societies and because it is basically the only internationally competitive sector. And it directly challenges the currently popular belief that America is a declining world economic force and supports the view that in the 1980s American goods will become increasingly more competitive in international markets.
