Saturday, February 26, 2011

Part 7 - Impact of technology


Agriculture and mining produce commodity raw materials. In 1880 agriculture accounted for over 40% of US employment. By 1970 this had dropped to 4%. Despite this, agricultural production vastly increased.

Before 1880 steam powered railroads enabled commodities to be moved from regions of the country which could produce them cheaply to consuming areas. This boosted productivity.

After 1880 the internal combustion engine (ICE) had an enormous impact on these sectors. Farms were mechanized from the 1920s to 1970 by tractors and combine harvesters. Mechanization of agriculture changed the face of America as people moved from towns to cities.

Bulldozers and dump trucks have reduced the cost of moving earth and have tended to replace labor intensive underground mining with open cast operations. Meanwhile, oil drilling rigs are powered by internal combustion engines.

Chemical fertilizers, pesticides and plant breeding also played a role in improved agricultural productivity.

After 1970 agricultural and mining productivity continued to improve, but these industries are now a small part of GDP.


Before 1880 steam powered production machinery revolutionized the production of many items, especially textiles. After 1880 electric motors eventually replaced steam engines for driving machinery, with most US industry electrified by 1930. Electric motors are far more convenient than steam engines for factory organization, and they helped to increase productivity in many ways.

Perhaps the biggest improvements in productivity came from mass production ideas, which were perfected in Ford Motor Company's assembly line for the Model T automobile. This is reported to have boosted productivity by a factor of 8. This eliminated skilled labor in direct production. Anyone could do the work, and this provided jobs for the people displaced by the mechanization of agriculture.

From 1970 to the present, the technologies which enable globalization have devastated US manufacturing. Globalization might have been beneficial if trade had been balanced, with easy manufacturing tasks sent overseas being replaced by the move of more difficult tasks to the US. Unfortunately, the US political establishment has allowed foreign countries to use the system to grab jobs from the US. US manufacturing's share of GDP been cut in half, and the gap filled with imports.


All of this industry's output is from offices. Before 1880 the telegraph would have had some impact on the operation of this sector. That invention enabled global financial markets.

From 1880 to 1970 electric lighting and photocopiers would have helped productivity a little. However, this industry was much less affected by technology than other economic sectors.

That changed after 1970, as semiconductor based technologies created a new generation of office machines. Computers and spreadsheets automated calculations that once would have taken hours. ATMs changed the face of US banking. Productivity should have improved massively, and yet this industry doubled as a percentage of GDP instead of shrinking. This is probably because computers and spreadsheets enabled new financial products. Has this improved the standard of living?


Before 1880 little progress was made. Life expectancy at birth in 1870 was 44, which wasn't much improved over earlier eras. Many children died young from infections.

By 1970 life expectancy at birth improved to 71. This is due to the near eradication of infectious disease among children. Vaccines played a large role in this, although improved sanitation may also have helped. The development of antibiotics like penicillin further reduced the toll from infectious disease. These improvements came at modest cost. Little progress was made in treating the diseases of aging, like cancer and heart disease.

Since 1970 cost has exploded. This might be due to Medicare, which allows the elderly to pay for expensive treatments which they previously could not have afforded. Life expectancy has improved from 71 to 78.

CAT scanners, ultrasound and NMR machines eliminated the need for exploratory surgery. Effective treatments for AIDs were developed. Biotechnology helped diagnoses. Computer technology could have cut administration costs, if it had been properly applied. However, powerful providers have little interest in cost savings.


Prior to 1880, the combination of railroads and telegraphs enabled mass mobilization, which ultimately proved destabilizing.

After 1880, the ICE eventually mechanized the battlefield. By 1970, nuclear bombs mounted on ballistic missiles vastly multiplied the potential for destruction. However, some think that they deterred war between great powers by making it too costly.

After 1970 the deployment of satellites, electronics and sensors have multiplied the lethality of conventional weapons. Targets that would have required hundreds of bombs in WW2 can now be destroyed with a single weapon.

However, no attempts have been made to take advantage of the potential cost savings. Defense expenditures are only very distantly related to defense needs.


The paradigm of a teacher standing in front of a class while the students take handwritten notes is a 'technology' that goes all the way back to the Dark Ages. Due to powerful providers, few attempts to apply technology to increase productivity have been made. Education wins the award for the industry least changed by technology. Computers and the Internet might eventually transform this industry.


After 1880 electric light enabled large, windowless stores. Automobiles meant that stores no longer had to be within walking distance of their customers, which allowed for larger stores and economies of scale.

After 1970 bar code scanners and computers with database software automated the management of products on the shelves and in warehouses. Better communications helped to manage deliveries. Walmart exploited these technologies to enable its growth.

After 1995 the Internet changed the face of retailing, and reduced the need for physical stores.


This industry employs very few in relation to it's size in GDP numbers. The output is mostly office based, so computers, cell phones and the Internet ought to have improved productivity. Suburbanization in the 1950s gave Americans much larger and more comfortable homes.


Before 1880 transport was revolutionized by steam powered railroads.

After 1880, the mass produced, oil fueled ICE took over as automobiles, trucks and airplanes developed.

In the 1950s, the globalization technologies were developed, which eventually enabled global supply chains for manufacturing.

After 1995 the Internet enabled airlines to better fill their planes, increasing the percentage of seats filled.


ICEs power cranes, bulldozers and hydraulic diggers which have partly mechanized construction. The assembly line ideas of Ford were also applied to home building from the end of WW2. These new suburbs were far more spread out than older cities, because they were designed around the automobile.
In cities, electric motors provided a convenient way to power elevators, which helped to enable skyscrapers.

Electrically powered hand tools eased construction tasks. Reinforced concrete structures also cut labor costs relative to brick.

After 1970 environmental and zoning restrictions made construction harder and helped to increase housing costs in many parts of the country. Large civil projects became impossible to build, while legacy infrastructure becomes increasingly overburdened.


Obviously newspapers and books were produced before 1880 on steam powered printing presses.

From 1880 to 1970 cinema, radio, television created new industries. After 1970 the demand for computer software further expanded this sector. CGI opened new possibilities for filmmakers.This industry employs few people in relation to its share in GDP.

The Internet has had a huge impact on this sector, allowing content to be distributed at very low cost.


This industry employs large numbers in relation to its GDP.

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