The Growth of Services in the Economy

Abstract

In the previous article we examined the proposition that the proportion of the labour force engaged in producing services (as opposed to goods) was steadily increasing. We found that for the United States this was incontrovertibly true. For the United Kingdom there appeared to be no marked difference in long-run employment trends between goods industries and service industries as a whole, but we suggested a number of ways in which true service employment was growing outside the service industries as such—both within the goods industries and outside the market sector altogether. We then suggested a number of reasons for believing that a relative growth in service employment—whether reflected in the statistics or not—is a stabilising influence in the economy. In this article we want to examine the view that it is also a brake on the growth of the economy as a whole, and an inflationary influence.

First published 1961.