The most technologically progressive decade of the 20th century

Can you guess?  According to economic historian Alexander Field, it is (controversially) the 1930s. Opening paragraph:

Because of the Depression’s place in both the popular and academic imagination, and the repeated and justifiable emphasis on output that was not produced, income that was not earned, and expenditure that did not take place, it will seem startling to propose the following hypothesis: the years 1929–1941 were, in the aggregate, the most technologically progressive of any comparable period in U.S. economic history.  The hypothesis entails two primary claims: that during this period businesses and government contractors implemented or adopted on a more widespread basis a wide range of new technologies and practices, resulting in the highest rate of measured peacetime peak-to-peak multifactor productivity growth in the century, and secondly, that the Depression years produced advances that replenished and expanded the larder of unexploited or only partially exploited techniques, thus providing the basis for much of the labor and multifactor productivity improvement of the 1950’s and 1960’s.

More concretely, we have this:

Within manufacturing, advance took place across a variety of fronts (Michael Bernstein, 1987, especially Ch. 4). There were, to be sure, older industries such as textiles, leather goods, and apparel, where productivity growth was slow or nonexistent. But there were also a remarkable  number of dynamic sectors, generating new process and product innovations, with varying levels of commercial exploitation before the war. Petrochemicals is an obvious example. At companies such as Dupont, advances in chemical engineering generated a host of new products, including Lucite (sold as Plexiglas by a rival manufacturer), Teflon, and Nylon (Peter H. Spitz, 1988; Stephen Fenichel, 1996). Even in an older industry such as automobiles, innovation and product quality improvement during the decade proceeded at a rapid rate. Indeed, Daniel M. G. Raff and Manuel Trajtenberg (1997) view the decade as the last one in which there were truly revolutionary improvements in internal combustion engine powered vehicles. But progress was not limited to manufacturing: communications services, electric utilities, and transportation were also standouts. TFP [total factor productivity] growth in the telephone industry accelerated significantly after 1929 before falling precipitously during the war years. In electric utilities, MFP [multi factor productivity[ growth more than doubled comparing 1929–1941 with 1919–1929; in contrast to the telephone case, high rates persisted after 1941…

Labor productivity in railroads — still one fourth of the U.S, capital stock at the time — grew as well.  Using steel with concrete also became far more productive.

I found the link to this well-known article in a very interesting post on economic recovery from the Depression.

Comments

Long wave theory is not respectable, partly because it has
never been widely accepted that there are sufficient endogenous
mechanisms to make it operate. But those who push the idea,
and in its most widespread form tying it to large-scale
technological innovations, have long argued for such innovations
to soar during deep downturns, giving this endogenous mechanism
a way of operating. So, call yourself, Tyler Kondratieff.

I think I'd feel more comfortable with his conclusion if we selected an interval that didn't overlap with WWII. By 1941 the US was already benefiting from the flurry of innovation coming out of a war-torn Great Britain. That’s a fairly big lurking variable.

So does the story change if we select say, 1936, as our endpoint? He might be right, but I’d want to see the data to support it.

look at what is going on now with wireles and smart tech stuff getting smaller and more interconnected. even if we have a long way to go before getting back to expansion the innovation between now and then will be tremendous.

we already have a decade of no gains in the stock market but most people had crummy dial-up internet, a pager and no i-pod at best 10 yrs ago. no flat screen monitors or tv's ect...

How interesting!

Oddly enough, this is in line with the implications of Gregory Clark's article from last month about the failure of modern economic theory. My conclusion was that physics, mathematics, (maybe) computing science and (if you believe Clark) economics all had their last major paradigm developments in the 1930s.

http://www.knowingandmaking.com/2009/02/reshaping-economics.html for more.

Daniel M. G. Raff and Manuel Trajtenberg (1997) view the decade as the last one in which there were truly revolutionary improvements in internal combustion engine powered vehicles.

This is true. The Model T was last made in '27, then you've got the Model A after that. The Model A has all the basic features of a modern automobile, where the T had more in common with a horse drawn wagon.

In fact, in some ways it is shocking how much a Chevy Tahoe or other SUV has in common with, say, a 1932 Ford. Front engine, rear wheel drive, full frame, V8 engine, etc. etc. etc.

All that has happened since then is refinement.

The lesson: Necessity is the mother of invention.

How would this show up in aggregate TFP? How would it show up in the Cole and Ohanian study who argued that aggregate TFP grew quite quite quickly during the great depression---or at least returned to trend---but that the allocation of labor was not 'optimal' during the 1930s. ie, not enough hours worked given the TFP growth.

On the face of it, the evidence seems roughly consistent with their study. I am sure someone will correct me...

I came to roughly the same hunch awhile ago, perhaps from reading a lot of sci-fi from the late 1930s and 1940s.

"Tommy Flowers, John Baird, Alan Turing, Robert Watson-Watt and more generally the good people at Marconi. "

I wonder how many of those people would have been known outside of a very limited field, if it weren't for the war. The war provided a stage for heros-in-lab-coats like no other time, and the dramatic background may make innovations and their inventors look more important then the same innovations would have in other periods.

“I wonder how many of those people would have been known outside of a very limited field, if it weren't for the war.†

Agreed.

Neither Baird nor Turing needed the war to become famous. Baird invented TV. Turing, especially, did jaw-dropping work in several different ways, especially math, most notably founding computer theory, but also in math-related gadgets like a thing called the computer, which you may've heard of.

Turing did create the first real computer during the war, but I can't make myself believe he wouldn't've done it even without the war; it just would've taken longer because he would've had to scare up a grant and would've had less help.

Lest you think we can't do that sort of thing today, remember, nanotech is getting its start in these years, with no shortage of attached brainpower.

We have been advancing technologically a lot lately, but the paradox in all of this "evolution" is that the human kind has lost a lot of good things along... We don't have that much health, we are starting to become computer addicted, our kids don't read books anymore etc etc. And let's not forget that we live in capitalism and only rich people afford the real advancements of technology. calling cards

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