March 18, 2023
“The most important, and indeed the truly unique, contribution of management in the 20th century was the fifty-fold increase in the productivity of the manual worker in manufacturing.” — Peter Drucker
It wasn’t supposed to be like this. The “Great Boom” was supposed to last.
From 1870-1970, there was an incredible 50x increase in the productivity of the average manual worker. Let me break that down so it really lands for you like it did for me:
- 50x Increase: Imagine getting 50 hours of work done in one hour. Or imagine doing the work of 50 people by yourself.
- On Average: We’re not just talking about a 50x increase for the most ambitious, smartest manual workers. We’re talking about all manual workers.
To put the profundity in context, the “Great Boom” is one of the most amazing and under-appreciated events in economic history. The chart below captures its magnitude and uniqueness:
To more deeply appreciate this shift, consider the following:
- This is a unique event in all of history. “Modern humans first emerged about 100,000 years ago. For the next 99,800 years or so, nothing happened…Then — just a couple of hundred years ago — people started getting richer. And richer and richer still,” states Economist Steven Landsburg.
- Before it happened, the average American lived on about a dollar a day (in today’s dollars). “Before 1750, almost nowhere in the world were living standards something that we would call anything but miserable and poor,” according to economic historian Joel Mokyr. Economist Steven Landsburg adds, “Almost everyone lived on the modern equivalent of $400 to $600 a year, just above the subsistence level.”
- Before it happened, day-to-day life was brutal. “In 1870, farm and urban working-class family members [in the United States] bathed in a large tub in the kitchen, often the only heated room in the home, after carrying cold water in pails from the outside and warming it over the open-hearth fireplace,” according to economic historian Robert Gordon.
Bottom line: The people alive between 1870–1970 experienced unprecedented change. Now, imagine being an adult in 1970. Think about how you’d see the world…
(o resto é reservado aos assinantes do Medium)
Recomendo o livro do Roberto Gordon, The Rise and Fall of American Growth, 1870-2014, mas apenas para o passado, pois seu pessimismo quanto ao presente e o futuro é muito conjuntural.