The Problem in Canada and the USA

Abstract

The public sector has expanded rapidly in most Western economies and many have experienced problems similar to Britain’s. In this chapter the effects of a growing non-market sector in two countries, Canada and the USA, which publish statistics which can be compared with Britain’s are set out. Like Britain, Canada and the USA have had slow rates of growth of productivity in their market sectors, 2.4 per cent annum in Canada and 1.7 per cent in the USA in 1955–74 against 2.7 per cent in Britain in 1956–74.¹ Like Britain also, their non-market spending has risen very rapidly. The result has been that all three countries have diverted a high fraction of the extra resources resulting from economic growth to their non-market sectors, leaving relatively little for their market sectors where all marketed output is produced.