does testify to the fact that the first or more direct impact of the several applications of technology falls upon one group rather than another, and that the interests of the several groups are not always in harmony. It may also serve to draw attention to the nature of the conflict involved and to the necessity of resolving it in the common interest.

TECHNOLOGY AND THE CONSUMER

The consumer's interest in technology is treated under: (1) The trend in productivity-the degree in which technology makes for a more economical use of labor and capital in the creation of a given aggregate of goods and services; (2) the trend in production-whether the volume of goods and services actually produced corresponds with the volume that might reasonably be expected from existing productive efficiency; (3) the trend in prices-the degree in which a lower cost of production attributable to technology is reflected in lower charges to the consumer; and (4) the degree in which lowered prices made possible by technology benefit the various income classes.

Productivity as Labor-saving.

A number of methods of measuring change in productivity have been distinguished. Of these volume of physical output per wage earner and volume of output per man-hour have been used most frequently. Of the two the second is more exact because the validity of this measure is not affected by changes in hours worked or changes in prices. Labor is regarded simply as the number of hours worked.

Comparable data are available in man-hour output for the years 1909 through 1939 in manufacturing, bituminous coal mining, and anthracite mining, and for the years 1914-39 in steam railroads, as shown in chart XII, table 7. In these four important segments of the economy labor productivity has made striking advances, reaching an all-time high in 1939. It has been relatively unaffected by the major cyclical downturns and, except for a few brief interruptions, has steadily increased. In three of the fields the rate of advance has greatly accelerated in the last decade.

A more explicit indication of increasing productivity in these four fields is shown in table 8, where the percentage change in production and in man-hour output for the period 1923-29 is compared with that of 1929-39. In the earlier period an increase of 31.9 percent in labor productivity in manufacturing was matched by a rise of 30.1 percent in production. In bituminous coal mining labor productivity remained fairly stable, increasing only 8.1 percent, while production decreased 5.3 percent. Labor productivity in anthracite mining actually declined 3.6 percent, while production went down 20.9 percent. In steam railroads an increase of 18.2 percent in labor productivity was accompanied by a rise of 3.3 percent in production.

These are considered in Temporary National Economic Committee Monograph No. 22, Part I, and in Part II, appendix A. For a discussion of the concept, man-hour productivity, see Spurgeon Bell, Productivity, Wages, and National Income, Brookings Institution, 1940, p. 200 ff.

CHART I

TABLE 7.—Indexes of production and productivity, 1909–39

Source: Witt Bowden, "Wages, Hours, and Productivity of Industrial Labor, 1909-39," U. S. Bureau of Labor Statistics, Monthly Labor Review, September 1940. Production figures computed by Witt Bowden in connection with output per man-hour indexes. Original data for manufacturing from the National Bureau of Economic Research, Federal Reserve Board, and the U. S. Bureau of Labor Statistics; for steam railroads from the Interstate Commerce Commission; and for bituminous and anthracite mining from the U. S. Bureau of Mines and the U. S Bureau of Labor Statistics.

TABLE 8.-Percent change in production and labor productivity 1923-29 and

But during 1929-39 the pattern was entirely changed. Declines in production were coupled with remarkable advances in labor productivity. In manufacturing, productivity advanced 32.3 percent while production went down 0.5 percent. In bituminous coal, labor productivity increased 31.5 percent, but production declined 27 percent. In anthracite mining a similar decline in production (31.2 percent) was overbalanced by an increase in labor productivity of 79 percent. In steam railroads, labor productivity went up 31.0 percent, while production declined 25.8 percent.

Labor productivity increased much more rapidly during 1929–39 than during 1923-29 in steam railroads, bituminous coal mining, and anthracite mining, as the comparison of the two figures in the righthand column of the table under each of these heads clearly indicates. Only in manufacturing was the increase in 1923-29 at all comparable with that of 1929-39. This long-term increase in labor productivity is remarkable because increases in output per man-hour occurring between 1929 and 1939 were achieved despite a lower level of output in the latter year.

Of equal interest is the extent of the changes in labor productivity in specific manufacturing industries. In table 9, indexes are shown of output per man-hour in 40 of the 59 industries reported by the National Research Project for which man-hour data were available.® TABLE 9.-Indexes of output per man-hour, 1929, 1936, 1939; 40 manufacturing industries

Source: Works Progress Administration, National Research Project, Production, Employment, and Productivity in 59 Manufacturing Industries, 1919-36, pt. II. The 1939 figures were projected by the National Research Project staff and transmitted by letter to the Temporary National Economic Committee. For the 15 industries with 1939 figures the 1936 figures are revised.

Changes are indicated from the base year 1923, to 1929 and 1936 for each of the industries. It was also possible to project the series forward to 1939 for 15 of the industries.

6 Wherever possible. data were secured relating to specific industries rather than to industry groups. In the case of leather, in order not to overweight the table by the inclusion of five specific leather industries, the entire leather industry is utilized.

Productivity increased in each of these industries over the base year in both 1929 and 1936. It likewise increased between 1929 and 1936 in most of the industries. In contrast, production in 1936 was below the 1929 level in two-thirds of the 40 industries as reported by the National Research Project. Despite this generally lower level of production, output per man-hour in 34 industries was higher in 1936 than in 1929, strikingly indicating the intensity and rapidity with which technological improvements were introduced during that 7year period.

Indexes are available for man-hour productivity in mining including petroleum and natural gas, and for the electric light and power industry. The former shows a rapid and fairly steady overall increase from 1919 to 1938 amounting to 130 percent, associated with a peak production increase in 1929 of 20 percent, which was not exceeded in 1937. A similar and still more striking over-all increase in productivity occurred in the electric light and power industry from 1920 to 1938, amounting to over 120 percent, associated with an increase in output reaching 170 percent, which embraced a decline of some 16 percent only for the depression years 1931-33. The unlike trends in these two industries show a striking difference in the relation of production to productivity. In the one, production failed to keep abreast of productivity after 1929. In the other, the depression reduction was only a temporary decline in a rapidly mounting output.

A National Research Project study indicates that during the period 1921–37, as a whole, productivity measured in terms of output per worker showed about the same general gains in agriculture and manufacturing. But from another study using the same measures, it appears that the statement needs some qualification. This indicates that while agriculture made little or no gains from 1900 to 1910, manufacturing output per worker increased 17 percent. From 1910 to 1920 the situation was somewhat altered. Agriculture gained 19 percent, manufacturing 12 percent, and mining 34 percent. The over-all gain for the first 30 years of the century was 41 percent in agriculture, 63 percent in manufacturing, 47 percent in mining. It is to be recalled in this connection, however, that output per worker is not a precise measure of productivity.

Farmers have difficulty in retaining their productivity gains. This is due to the large number of farmers who individually have no way of influencing prices, and to the tendency of production to outrun the consumption of farm products. Increased production, therefore, tends to depress prices below corresponding price levels in industry, where controlled prices are not infrequent. Since current technological developments increase the farmer's dependence upon industrial products this problem is not a diminishing one.s

The data canvassed relate to representative sections of manufacturing, to bituminous coal mining, anthracite mining, the steam railroad industry, mining (including petroleum and natural-gas production), the electric light and power industry, and agriculture. A substantial segment of the total economy is thus represented. In all

8

Spurgeon Bell, op. cit., pp. 67, 74, 274, 277.

U. S. Department of Agriculture, Technology on the Farm, August 1940, pp. 72-73. 300282-41-9