Abstract

Yet this is precisely what I intend to do. As a way of conferring some initial legitimacy Perhaps the most fundamental axiom of upon this enterprise, I would like to start out modern economic science is that there simply by appealing to the “no free lunch” is no such thing as a free lunch. It is principle. To adopt productivity growth as a this axiom that gives us the concept of opporsocial priority is to set aside other objectives tunity cost, an idea that has led to enormous that we might like to pursue. Therefore, one gains in the clarity of our understanding of cannot maintain rational adherence to a proindividual and societal choice. But while congram of increased productivity without a clear tinuing to endorse this fundamental axiom, sense of what the benefits of such a program many economists have also been extremely are likely to be, compared to the other things attracted by the appeal of increased economic that we might choose to do. The bulk of this efficiency. Efficiency gains are often treated, paper consists of an attempt to evaluate the if not exactly as a free lunch, certainly about size and scope of these benefits. More controas close to a free lunch as one can get in this versially, I will try to show that these benesublunar realm. As a result, economists often fits are often exaggerated. react with a certain incredulity when some- The conclusion that I draw on the basis one questions the need for such gains. It is of this survey will strike many as complacent. tempting to suppose that the critic simply But it is a principled complacency. I argue misunderstands the relevant concepts, or else that we have good reason, as a society, to strive fails to grasp the full set of constraints under for productivity gains, but that there is nothwhich economic activity occurs. ing urgent about this objective. Furthermore, Productivity growth is widely regarded we should not strive to maximize productivity as a subset of the efficiency gains that can be gains, nor should we be overly concerned realized in our economy.