U.S. Riches in a Poor World The Costs of Progress
KUHN, JAMES W.
U. S. Riches in a Poor World Two Articles The Costs of Progress By James W. Kuhn The future of America is going to be wonderful. Progress guarantees it. Atomic electric power will be unmetered....
...Though America has only a little more than 9 per cent of the free world's population and 8 per cent of its area, she consumes about half of its materials...
...Bricklayers, carpenters and electricians would be thrown out of work: refrigerators, stoves and carpets would pile up in warehouses: production of presses, metal lathes and stamping machines would be cut...
...The growing industrial productivity in which we glory is a necessary contributor to our progress, but it also draws tighter the economic and political tensions of the free world and particularly of our Western allies...
...The growing discrepancy in the amount of wealth available to Americans and to other peoples feeds smoldering national resentments, inciting invidious comparisons abroad and encouraging smugness and self-righteousness at home...
...These workers and factories turn out the building supplies, the pig iron and the machine tools that are invested in new production facilities which in turn will provide the kitchen sinks, automobiles and TV sets that will make up our higher living standard in the coming years...
...American industry makes wide use of college graduates and trained technologists, and has been willing to accept new ideas thrown out by the universities...
...Foreign sources meet a large and growing share of our petroleum and iron-ore needs...
...Professor Joseph Spengler of Duke University estimates that, if total world production grows at an annual rate of 3 to 4 per cent, global output by the year 2000 will be between 4.4 and 7.1 times as great as in 1950...
...Gross private domestic investment in 1954 amounted to about $47 billion, which means that we used over 13 per cent of our total output to enlarge and replace the national stock of houses, machinery, tools and factories in expectation of a larger future demand...
...Productivity that is, the industrial efficiency which supplies extra goods from the same amount of resources has probably been increasing faster in the U.S...
...Progress exacts a price for the national well-being it provides...
...depend on its own continental resources for sufficient supplies of many essential ores, fuels and metals...
...We will need more steel, more houses, more utilities and more goods of every kind to provide the growing population with our present standard of living...
...Progress is desirable, not just for the bountiful life it promises but as a guarantee against misery of the sort Americans suffered in the Thirties...
...The new factories and the new city workers' jobs will require additional raw materials, and Indian competition for the world's scarce resources will increase...
...Concentrating and refining these basic materials for production use requires considerable expenditure of other resources and numerous subsidiary additives, often scarce themselves...
...If future demand is not larger than today's, millions of workers and thousands of factories will become useless...
...Direct private investment abroad amounted to $13.5 billion in 1950, of which $6 billion was in materials development...
...In the past fifty years, the average compound rate of annual increase in productivity, measured in output per man-hour, has been something like 2.6 per cent in the U.S., while in Britain it has been about 1.6 per cent...
...Our progress has excited an invidious, emulative production drive that is compounding the demands made on the world's resources...
...The faster we use our reserves of natural resources, the smaller those reserves become, both absolutely and relatively...
...Increased productivity, i.e., more efficient use of available resources, in the underdeveloped, agricultural lands does not push back the limit of scarce resources very far and, in fact, will probably increase international competition for raw materials...
...General American educational standards may leave something to be desired when compared with the best in Europe, but the U.S...
...We secure our imports usually not through some passive arm's-length trade, but through invasion by investment and industrial techniques...
...The vast subcontinents of India and China, for example, are in a portentous race toward our standards of production and consumption...
...than in any other industrial nation, with the possible exception of the Soviet Union...
...has long made a greater total investment in education, particularly technical training, than most European countries...
...Increasingly, the European nations have little to offer us...
...We may expect this to cause a larger and larger discrepancy between the cost of our output and that of the rest of the free world...
...It is a paradox that the maintenance of internal strength and domestic tranquility in the United States helps to breed instability and revolution in other parts of the world...
...A year's supply of petroleum or iron ore ten years ago, for example, is no longer a year's supply today, and we have not been able to meet the gigantic demand from our own diminishing stores of resources...
...The development and wide use of a ubiquitous substitute like the plastics may have relieved the pressure on some of our scarce metal ores, but they have imposed an additional and growing drain on another scarce resource, petroleum, from which the basic chemicals come...
...Progress offers no vistas of unmixed blessings...
...Our industry will continue to enjoy the world's largest domestic market, which, through its wider opportunity for inter-industry competition, encourages technological development and efficient standardization...
...And well they might...
...The peoples of the underdeveloped areas are moving toward industrialization...
...This is the lingering, ever-present "dollar shortage" problem...
...Our per-capita consumption of raw materials other than food is roughly ten times as high as the rest of the free world...
...If production docs not increase at least as fast as the population...
...That turbulence, instead of subsiding, may built up into a storm the like of which we have never known...
...The same or larger differences probably apply between the U.S...
...Unless production is continually expanded and new jobs created, unemployment figures will mount as they did in 1954...
...Since World War II, our population has increased at an average rate of over 1.5 per cent per year...
...If the automobile producers did not believe that still more cars could be sold next year, they would not expand their plants...
...Our expanding production propels us toward a materially richer life, but it also creates turbulence in the world stream of economic and social activity...
...One gathers from current bemused speculations on our rapturous future that Americans have accepted Progress...
...We may even have safety devices commensurate with the power and speed of the cars...
...Though our natural resources are declining in quality and quantity, we are relatively richer than almost any other free nation and better located than most European countries to take advantage of foreign resources...
...The new nationalism finds expression in forms ranging from expropriation to war and threatens the very sources of supply that we have helped to create...
...The training and attitudes of our work force also favor our high rate of growth in productivity...
...The industrial machine that turns out ever greater quantities of finished goods demands ever greater amounts of raw materials and pushes Americans into every corner of the earth...
...American labor has confidence in technological change and seldom blocks advances in productivity...
...Since World War I, according to the Paley Commission, the U.S...
...Our engineers and businessmen establish new communities where before there was only jungle or desert...
...With no growth of national output, we would be faced with the job of clearing city slums, easing rural poverty, extending health care, and mitigating extreme inequalities of income by the hitter, divisive process of a political redistribution of income...
...Automatic factories will turn out prefabricated plastic houses and durable temperature-regulating clothes...
...Furthermore, even the plentiful supplies of sea water and air are not free...
...They raise up new classes of workers, new positions of status, new knowledge, and new views...
...Rebellion against the old order follows in the wake of our industrial development...
...It makes demands that must be met at the same time it supplies benefits that may be enjoyed...
...The requirements of American progress have unsettled many of the underdeveloped nations, and we can expect even more difficulties, more clashes of interest, intransigent demands and bitter rivalries...
...James W. Kuhn is an Assistant Professor of Industrial Relations at Columbia's Craduate School of Business...
...alone has used more of almost every mineral fuel and metal than the whole world used in all preceding history...
...Substitutes may also be more expensive than the original goods...
...In just one of the investment industries, construction, we had over 2.5 million workers whose wages were about 8610 million...
...As national output leveled off in that year and some 800.000 new workers entered the labor force, unemployment rose from a little over 1.5 million to more than 3 million...
...Since World War II, private investment in mining and refining facilities has averaged $50 million a year, and the investment will have to be even greater in the next decades...
...By 1975, the Census Bureau estimates, we will have a population of 207 to 229 million...
...They helped build nearly $28 billion worth of new factories, homes and stores...
...We can produce machinery, gadgets and tools more cheaply than other countries with our modern, scientifically-designed and -operated factories and our efficiency-conscious workers...
...Each year, we graduate three times as many people from universities per capita as does the United Kingdom, and our universities spend seven times as much on scientific research...
...there will be fewer goods, which will mean lower real incomes, for an increasing number of people...
...We are net importers of lumber and, surprisingly, even of agricultural products...
...and other European countries...
...The nation will be spiderwebbed with superhighways, and we may even have a few better city streets...
...The rest of the free world has become increasingly dependent upon the U.S., and its demand for our goods outruns its ability to pay for them...
...Britain can sell us scotch, bicycles, MGs and an occasional electric generator, but these will hardly pay for the latest American machinery that she wants or the weapons that she needs...
...The Paley Commission estimated that American industry would have to invest $100 million annually in foreign copper development alone...
...These requirements create in a new form problems as dangerous as those that our progress helps to solve...
...When we invest abroad, we build roads, erect refineries, construct railroads, and put up shops and factories...
...Since 1939, American production facilities have had to provide from 600,000 to a million new jobs every year, and in the coming years even more new workers will be entering the job market...
...The larger, more easily secured food supply will free workers for factory jobs and perhaps be sufficient to trade for investment goods from abroad...
...The share of imports from Europe has been declining for over fifty years, and the war accentuated the shift...
...Our hydraulically-driven automobiles will require only a mastery of push buttons...
...The weather will be tamed so that rain or sunshine can be delivered as reliably as homogenized or chocolate milk...
...They inject a new culture and a new economy into the foreign nations which upset old traditions and sever the bonds that previously may have maintained stability even in poverty and oppression...
...If any funds are left over, we may be able to afford additional school buildings...
...A rising standard of living, which is American progress, requires continuous growth of production facilities, an expanding supply of raw materials, and increasing efficiency in the use of both...
...We may be able to develop substitute goods made from more plentiful resources like sea water, air and limestone, but there is good reason to doubt that substitute products lead to an overall conservation of resources...
...The support to prosperity lent by these large investment expenditures is vital...
...This would mean the use of some 22 to 36 billion tons of raw materials each year, compared with 5 billion tons in 1950...
...During and since the war, we have given Britain many of the goods she could not buy for lack of dollars, but the gifts have hurt the sensibilities of both American taxpayers and British citizens...
...If Europe, with its rich natural resources, has constantly warred over the distribution of supplies, we can hardly expect less trouble from the rising nations as they transform themselves into industrial centers...
...We are the world's largest importer of copper, lead and zinc, and dependent upon foreign suppliers, at least in part, for all but two metals...
...By 1950, we were pouring 2.5 billion tons of raw materials, 18 tons per capita, into our factories every year...
...More workers would be laid off elsewhere, and the spiral into deep depression could begin...
...More efficient agricultural practices in India may increase food supplies by a greater amount than they use up investment goods, but we can expect the pressure on raw materials in another area to increase...
...Given our population growth and large commitment of workers and factories to the production of capital goods, only Progress can keep our economy from being pitted with the social corrosion of mass unemployment...
...No longer can the U.S...
...We bring with us the radio, truck, airplane, school, hospital and water system, as well as the American concept of wages and working efficiency...
...If the large populations of Asia and Africa achieve but a fraction of our material consumption, the drain on world resources will be extremely rapid...
...There is little reason to think that the relative magnitude of our growth in productivity will not continue...
...The disturbing influence of American progress spreads out with heightening impact over far wider areas of the world than Europe...
...We must continue our economic progress not only because of population pressures, but also because so large a portion of our industrial plant produces for tomorrow's use...
...A rising material output allows all groups to better themselves and mutes the class conflict so evident in the stagnant economies of France and Italy...
...Should contractors believe that consumers might stop buying new houses next year or put off repairing old ones, they would cease to build or slow down the rate of construction...
Vol. 39 • June 1956 • No. 23
