Notes from What I've Been Reading
By Arnold Kling
As you know, it’s Inventing Ourselves Out of Jobs? America’s Debate over Technological Unemployment, 1929-1981., by Amy Sue Bix. It came out in 2000. I ordered it after seeing it referred to in A Great Leap Forward, the book I just reviewed.
One of my take-aways is that in many industries the productivity improvements were of an order of magnitude. Some excerpts are below the fold.
After 1940, the issue of technological unemployment was largely dropped. The second world war put a premium on productivity. The advent of the suburban middle class in the 1950s took the edge off of the labor vs. capital adversarial relationship that had permeated popular consciousness in the decades before the war.
Among economists, the Keynesian theory of aggregate demand crowded out interest in technological unemployment. I think it merits another look.p. 12:
Between 1895 and 1915…adoption of increasingly fast stone-planing machines, along with pneumatic tools and other new devices, had displaced about 50 percent of the nation’s stonecutters…one operator using the Owens bottle machine could reportedly equal the production of eighteen traditional glass-blowers.
The classical economists debated technological unemployment. p. 27:
French economist Jean-Baptiste Say’s 1803 Treatise on Political Economy declared that “industrious human agents” must “needs be thrown out of employ” whenever new devices appeared…Say quickly added that economic laws could “wonderfully reduce the mischiefs” of displacement…as output rose, prices of good would drop, stimulating an increase in consumption which could ultimately provide jobs for mroe peole than ever…
but the 1819 book New Principles of Political Economy challenged the belief that mechanization brought rising consumption and hence stimulated employment. Swiss economist Jean Charles Leonard de Sismondi [cautioned] that markets could easily become saturated with goods.
…[p. 28] A country might as well have only one inhabitant, its ruler, who “by constantly turning a crank, might produce, through automata, all the output of England.”
also on p. 28,
David Ricardo…eventually reversed his initial thinking…His 1817 version of The Principles of Political Economy endorsed an optimistic faith…Like Say, Ricardo felt that over the long run, growing demand should compensate for any “inconvenience” of temporary job loss due to installation of new technologies. In a revised edition five years later, Ricardo declared such assumptions “erroneous.” He had become convinced that mechanization indeed proved “often very injurious” to workers
The Bureau of Labor Statistics reported, for example, that ditch-digging machines with one operator and assistant could perform as much work as forty-four hand laborers.
A singel wheat farmer using the latest tractors could, in three hours, complete work that would have taken fifty-seven hours a century before.
One cotton planter who had purchased new tractors and cultivators subsequently eliminated 130 out of 160 sharecropping families…Between 1930 and 1935, the farm population of one Texas panhandle county had fallen 24 percent.
farm employment had dropped from 12.2 million to 10.6 million between 1909 and 1939, as the number of tractors grew from 10,000 to 1.3 million…By the most conservative estimates, each tractor eliminated 150 man-hours of labor a year.
Large cigar companies adopted rolling machinery…The resulting industry shake-up, combined with declining cigar consumption and the economic downturn, caused at least fifty-six thousand cigar-making jobs to vanish between 1921 and 1935.
locals expressed outrage at a public works contractor who brought in $75,000 worth of heavy machinery and finished a road job using just eight men, while a comparable site nearby employed forty men using shovels.
A less hysterical look at the evidence suggested that mechanization might account for 10 to 15 percent of total joblessness at most, [Meredith] Givens announced, and the remaining cases resulted from the problem of “idle machines rather than the busy machines.”
United Auto Workers president R.J. Thomas…[said that] Technical innovations in the industry had increased productivity by 134 percent [between 1923 and 1939] but surging consumer demand had stimulated a 212 percent leap in production which sent employment up 30 percent…even during the Depression years of 1929 to 1938, technological change in the industry resulted in a 17 percent gain in per capita productivity.
By 1940, rising concern about the international situation had started to affect the way Americans regarded mechanization…In the Depression, labor-saving machines seemed to present a threat; in a time of global crisis, they came to represent a virtue.