Friday, December 31, 2004

More Machines = Less Workers?

I'm looking over the “Report on Industrial Depressions”, published in 1886 by the Commissioner of Labor of the United States. The Commissioner of Labor, according to the introduction, was appointed by the President to head the Bureau of Labor, which was then a part of the Department of Interior. The Commissioner of Labor’s job was “to collect information upon the subject of labor, its relation to capital, the hours of labor, and the earnings of laboring men and women, and the means of promoting their material, social, and moral prosperity…”

It looks like it has many gems worthy of note. Here the Commissioner takes on the issue of labor being displaced by productivity. He makes a great case for machines. First, he gives us an idea of the tremendous productivity gains that were brought by the technological advances of the 19th century.

“The oil industry in Pennsylvania has been affected a good deal by inventions. In the early days of petroleum every barrel of the liquid had to be hauled from the wells to the railroads, sometimes a distance of ten or fifteen miles. The railroads then carried it to distant parts of the country…the cost of all this transportation being from $1 to $3 per barrel. All this work is now done by the National Transit Company, controlled by the Standard Oil Company. When a well is competed, the pipe line’s agent connects the well in a few minutes with the main line’s tanks. The producer or the owner of the well pays nothing for having his oil transported through the pipe lines, but pays 50 cents per day storage for every 1000 barrels…the pipe lines displace 5,700 teams of horses and double the number of men in handling the oil, the production of the country being placed at 57,000 barrels per day.”

“The mechanical industries of the United States are carried on by steam and water power representing, in round numbers, 3,500,000 horsepower…if men were employed to funish the power to carry on the industries of this country, it would require 21,000,000 men, and 21,000,000 men represent a population…of 105,000,000. The industries are now carried by 4,000,000 persons…representing a population of 20,000,000 only…The present cost of operating the railroads of the country with steam power is…$502,600,000 per annum; but to carry on the same amount of work with men and horses would cost the country $11,308,500. These illustrations, of course, show the extreme straits to which a country would be brought if it undertook to perform its work in the old way”

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