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only a small net "fiscal dividend" by 1976-it will be hard enough to fina~ce the wars on poverty, dis- cnmmation, and pollution even with vigorous economic growth, Consider the problem in a no-growth setting: to wrench resources away from one use to transplant them in another, to wrest incomes from one group for transfer to another, to redeploy fed- eral revenues from current to new channels (even assuming that we could pry loose a substantial part of the $70 billion devoted annually to military expenditures )-and to do all this on a sufficient scale to meet the urgent social problems that face us-might well involve us in un- bearable social and political ten- sions, In this context, one rightly views growth as a necessary condi- tion for social advance, for improv- ing the quality of the total environ- ment. Apm from the tangible bounties that growth can bestow, we should keep in mind some of its intangible dividends. Change, innovation, and risk thrive in an atmosphere of growth, It fosters a social mobility and opens up options that no sta- tionary state can provide, This is not to deny that a no-growth econ- omy, with its large rations of leisure, would appeal to those in the up- coming generation who lay less store by the work ethic and material goods than their forebears, But if they as- sociate this with tranquility-in the face of the intensified struggle for shares of a fixed income on the part of their more numerOus and more competitive contemporaries-I be- lieve they are mistaken, Walter W. Heller, Regellts' Professor of Economics at the University of Minnesota. ~ THE STATIONARY STATE The space enterprise has, if any- thing, accentuated the smallness of the earth and the loneliness of man, This beautilul blue and white ball is clearly the only decent piece of real estate in a very long way and we are stuck with it. We have had a period of enormous expansion in the last 200 years, in which, for instance, the growth of human knowledge has almost certainly in- creased natural resources much 2 laster than man has used them up, Nevertheless, there is now a brood- ing sense that this cannot go on forever, or indeed for very long as historical time is counted, and that within, say, 100 years, or at most 500 years, a very radical change has to be made in man's technology and in all probability in his social system, his culture, and in his image 01 himself as he makes the transition into the small. tight, closed, crowded, limited spaceship earth, which will almost certainly have to rely on in- puts of solar energy for its power and will have to recycle virtually all materials for its goods. We are mov- ing toward the end of the linear economy that goes from mines and wells to dumps and pollution, The circle must be made complete, All the excreta of man's activities must be translormed, and this by inputs 01 solar power, illto goods again, This image of the future has a grim air of physical necessity about it. We are living in just so big a house and there arc only so many things that can be done with it. The psychological impact of this shift has barely begun to be felt, I think many of what look like pathological aspects of the current youth culture may be a symptom of further changes to come, Young people, after all, are more sensitive to the future than oldsters, simply because they are going to live in it longer. Closely connected with this vision of a spaceship earth is a slowly gathering realization that perhaps the 'feally great age of change is now over, that economic growth, or at least its technical basis, is slowing down and is likely to slow down even further. I have been teasing audiences by saying that I thought the great age of change was my grandfather's life, When I look back on my childhood in 1920, the world does not seem terribly different; there were automobiles, electricity, the beginnings of the radio, tele- phone, the movies, and with one or two exceptions. like television. plas- tics. and antibiotics. what I have seen in my lifetime is more of the same, By contrast, my grandfather, looking back in \920 on his child- hood in 1860, looked back on a wholly different world-without elec- tricity, without automobiles, without airplanes, without movies, without telephones, without anything that we think of as constituting modern life, and his life as a boy was certainly 2700 not very much different from that of his grandfather or his grandfather or his grandfather. In the United States since 1967 we have seen a very sharp decline in the rate of increase of gross produc- tivity, that is, GNP in real tenus divided by the total employed labor force, including the armed services. We have had periods like this in the past so that it is hard to tell whether this is a temporary phe- nomenon or the beginnings of a long-run trend, but it certainly sug- gests why we managed to have both unemployment and inflation in \970, with the economy geared to in- creases in money income to take advantage of expected increases in productivity that did not materialize, Even over the last lorty years eco- nomic growth in the United States has not been spectacular, It took thirty years to increase real per capita disposable income by 50 per- cent, This might underestimate wel- fare somewhat, since it does not take account of public goods, but even on the most optimistic assump- tions, we are certainly not much more than twice as rich as our grandfathers, Furthermore, many oE the faclors that have permitted increasing in- comes in the last thirty years are not repeatable, One 01 these is the re- markable release of manpower from the increase in productivity of agri- culture, which has now brought agriculture down to 6 percent of the labor lorce so that even if agricul- tural productivity doubles in the next generation only 3 percent 01 the labor force would be released for other things, As productivity in particular occupations increases. the proportion of the economy in in- dustries that are improving declines, and the proportion in produetivity- stagnant industries, such as educa- tion, government. medicine, and so on, increases, It seems highly prob- able, therelore, that there will be a substantial decline in the rate of in- crease in gross productivity in the next few decades. A sharp decline in the rate of population growth is also very much in the works for the United States and indeed for the whole temperate zone, Fertility in the United States has declined so dramatically lrom 1961 that a little lurther decline wiH bring Americ<lns to a net re- productive ratio of I. It seems. there- lore, that the United States is much