This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Resource and Output Trends in the United States Since 1870 Volume Author/Editor: Moses Abramovitz Volume Publisher: NBER Volume ISBN: 0-87014-366-2 Volume URL: http://www.nber.org/books/abra56-1 Publication Date: 1956 Chapter Title: Resource and Output Trends in the United States Since 1870 Chapter Author: Moses Abramovitz Chapter URL: http://www.nber.org/chapters/c5650 Chapter pages in book: (p. 1 - 23) Resource and Output Trends in the United States since 1870 MOSES ABRAMOVITZ OCCASIONAL PAPER 52 NATIONAL BUREAU OF ECONOMIC RESEARCH, INC. 1956 Reprinted from the American Economic Review Library of Congress catalog card number: 56-9226. PRICE $.50 NATIONAL BUREAU OF ECONOMIC RESEARCH 1956 OFFICERS Harry Scherman, Chairman Gottfried Haberler, President George B. Roberts, Vice-President and Treasurer W. J. Carson, Executive Director DIRECTORS AT LARGE Wallace J. Campbell, Director, Cooperative League of the USA Solomon Fabricant, New York University Albert J. Hettinger, Jr., Lazard Frères and Company Oswald W. Xnauth, Beauf ort, South Carolina H. W. Laidler, Executive Director, League for Industrial Democracy Shepard Morgan, Norfolk, Connecticut George B. Roberts, Vice-President, The First National City Bank of New York Beardsley Rumi, New York City Harry Scherman, Chairman, Book-of-the-Month Club George Soule, Bennington College N. I. Stone, Consulting Economist J. Raymond Walsh, New York City Joseph H. Willits, Director, Educational ,Survey, University of Pennsylvania Leo Wolman, Columbia University Donald B. Woodward, Vick Chemical Company Theodore 0. Yntema, Vice-Presidenl--.-Finance, Ford Motor Company DIRECTORS BY UNIVERSITY APPOINTMENT E. Wight Bakke, Yale Gottfried Haberler, Harvard Arthur F. Burns, Columbia Clarence fleer, North Carolina Melvin G. de Chazeau, Cornell R. L. Kozelka, Minnesota G. A. Elliott, Toronto C. Arthur Kuip, Pennsylvania Frank W. Fetter, Northwestern T. W. Schultz, Chicago H. M. Groves, Wiscon.sin Jacob Viner, Princeton DIRECTORS APPOINTED BY OTHER ORGANIZATIONS Percival F. Brundage, American of Accountants Harold G. Haicrow, American Farm Economic Association S. H. Ruttenberg, Congress of Industrial Organizations Murray Shields, American Management Association Boris Shishkin, American Federation of Labor W. Allen Wallis, American Statistical Association John H. Williams, American Economic Association Harold F. Williamson, Economic History Association RESEARCH STAFF Solomon Fabricant, Director of Research Geoffrey H. Moore, Associate Director of Research Moses Abramovitz John W. Kendrick Morris A. Copeland Simon Kuznets David Durand Clarence D. Long Milton Friedman Ruth P. Mack Raymond W. Goldsmith use Mintz Millard Hastay G. Warren Nutter W. Braddock Hickman Lawrence H. Seltzer Daniel M. Holland George J. Stigler Thor Hultgren Leo Wolman Herbert B. Woolley RELATION OF THE DIRECTORS TO THE WORK AND PUBLICATiONS OF THE NATIONAL BUREAU OF RESEARCH 1. The object of the National Bureau of Economic Research is to ascertain and to present to the public important economic facts and their interpretation in a scientific and impartial manner. The Board of Directors is charged with the responsibility of ensuring that the work of the National Bureau is carried on in strict conformity with this object. 2. To this end the Board of Directors shall appoint one or more Directors of Research. 3. The Director or Directors of Research shall submit to the members of the Board, or to its Executive Committee, for their formal adoption, all specific pro- posals concerning researches to be instituted. 4. 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It shall be the duty of each member of the committee to read the manuscript. If each member of the special committee signifies his approval within thirty days, the manuscript may be published. If each member of the special committee has not signified his approval within thirty days of the transmittal of the report and manuscript, the Director of Research shall then notify each member of the Board, requesting approval or disapproval of publication, and thirty additional days shall be granted for this purpose. The manuscript shall then not be published unless at least a majority of the entire Board and a two-thirds majority of those members of the Board who shall have voted on the proposal within the time fixed for the receipt of votes on the publica- tion proposed shall have approved. 6. No manuscrip(; may be published, though approved by each member of the special committee, until forty-five days have elapsed from the transmittal of the summary and report. The interval is allowed for the receipt of any memorandum of dissent or reservation, together with a brief statement of his reasons, that any member may wish to express; and such memorandum of dissent or reservation shall be published with the manuscript if he so desires. Publication does not, however, imply that each member of the Board has read the manuscript, or that either members of the Board in general, or of the special committee, have passed upon its validity in every detail. 7. A copy of this resolution shall, unless otherwise determined by the Board, be printed in each copy of every National Bureau book. (Resolution adopted October 25, 1926 and revised February 6, 1933 and February 24, 1941) RESOURCE AND OUTPUT TRENDS IN THE UNITED STATES SINCE 1870* By MOSES ABRAMOVITZ Stanford University I. Introduction This paper is a very brief treatment of three questions relating to the history of our economic growth since the Civil War: (1) How large has been the net increase of aggregate output per capita, and to what extent has this increase been obtained as a result of greater labor or capital input on the one hand and of a rise in productivity on the other? (2) Is there evidence of retardation, or conceivably acceleration, in the growth of per capita output? (3) Have there been fluctuations in the rate of growth of output, apart from the short-term fluctuations of business cycles, and, if so, what is the significance of these swings? The answers to these three questions, to the extent that they can be given, represent, of course, only a tiny fraction of the historical ex- perience relevant to the problems of growth. Even so, anyone ac- quainted with their complexity will realize that no one of them, much less all three, can be treated satisfactorily in a short space. I shall have to pronounce upon them somewhat arbitrarily. My ability to deal with them at all is a reflection of one of the more important, though one of the less obvious, of the many aspects of our growing wealth; namely, the accumulation of historical statistics in this country during the last generation. For the most part, the figures which I present or which underlie my qualitative statements are taken directly from tables of estimates of national product, labor force, productivity, and the like compiled by others. In a few cases I have ventured to compute ratios or extend the tables forward or backward by combining estimates. But no original estimates depending on the compilation or reworking of primary data are included. *should like to thank Professor Simon Kuznets and Mr. J. W. Kendrick who made available to me certain unpublished estimates of national product, productivity, capita) stock, and hours of work. Their contributions are further described in the notes to Table 1.I am grateful to Richard A. Easterlin, Solomon Fabricant, J. W. Kendrick, and G. H. Moore for their critical review of the manuscript and to Mrs. Charlotte Boschan for assisting in its preparation. This paper has been approved for publication as a report of the National Bureau of Eco- nomic Research by the Director of Research and the Board of Directors of the National Bureau, in accordance with the resolution of the Board governing National Bureau reports (see the 35th Annual Report of the National Bureau of Economic Research, May, 1955). It is to be reprinted as No. 32 in the National Bureau's series of "Occasional Papers." 5 6 AMERICAN ECONOMIC ASSOCIATION The period since 1870 has an important unifying characteristic in that throughout these eighty years the economy has been growing in response to the complex of cumulative forces which we generally call industrialization. It is quite clear, however, that 1870 was not the be- ginning of the process of industrialization in this country. The propor- tion of gainful workers in agriculture fell from 71 per cent in 1820 to 64 per cent in 1850. It fell another 10 percentage points by 1870. Steam transport by water and rail was already common when the period begins. The proportion of the gainfully employed engaged in manufacturing and construction rose from 12 to 21 per cent between 1820 and 1870. Real per capita output rose significantly during the 1850's. It was set back by the Civil War, but aggregate output well- nigh doubled from 1850 to 1870.' The data before 1870—and still more before 1850—are highly dubious, but it seems clear that the period since 1870 does not include the entire era of industrialization and rapid income rise in this country.