1914. from one man in one factoryn michigan came global revolution. whatid henry ford do that sparked pductivity and economic growth? the revolution today is icommunications, but when space-age technology comes down to earth, es irealri econsare numbered,sof our ew thatoon there won't beenoughasi. are e propts ofoom correct? is has been america's century. giant steps of economic growth ha taken us om the auto age giant steps of eto thepace age

our real gross national product has increased tenfold. our al income per person has tripled. can we keep up the pace? wi the help of anast richard gill we'll examine at question

othe improvement in our standard of living caied to oueconomic growth since 1900. average woers enjoy three times as many goods. alofs because ofng increase the engine of growth 70 years agoin the auto. how did it begin? why was it successfu turn of the century autos were playthings of t rich. their puose was t whol clear.ry autos peaps they were stin static pos. certainly, auto industry growth was static. doze of models designed and produced differently-- e culminationof9tceury . with buyers like astors, vanderbis,

e culminationof9tceury . whitneys, and winthrops setting the fashion, $5,000 a car-- $50,000 in today's dollars-- seemed nothing extraordinary. in acould you gea carhop, therfor under ,000?dea. in 1905, most of these cars wereround $2,000. henry forda junior partner, proposed less expensive model n. his senior partners argued for the more expensive model k.n. alexander malcolmson and friends lost when ford bought them out with borrowed moy. thereafter, the ford would be self-financing, wienord inontrol. rst,e signed e right ca theodel t. made for farmers,

they'd lurch through mud, , plow through the snow. there were still only 200,000 cars in a country of 89 million people.. if ford could get the price down to $600, he could tap that vast market. but how? how to improve productivi? auto industry historian bor turnover approached 370%. he could tap that vast market. the quit rate was 370% of the woorce maintain a wo forcef 13,000, the quit rate was 370% of the woorce heado hire 54,000orkers year. he's whee gee y-- the quit rate was 370% of the woorce nearly doubling the unskilled workers' wages to provide the financial incentive for the worker to produc at a much faster rate and a much faster pace. ford got a grip on labor by doubling s workers' wag,

no longewould cars be builts in one place from bottom u the fordaid he wantedas woulto make automobilesized. come through the facry all alike, the model t fo was a compcated product. when it comes from the pinactory. it had about 5,000 parts. you could produce that part in large numbersery cheay if those parts never changed onceof a standard modelofutomobe along with large runs of that automobile, en you can sit down anday, "i'm going torge runs build my factoryle, to produce parts over and over again."

this is important for machine tools and equipment. by 1914, ford completehis plant. highland park costalmost $4 miln with an additional investment of 3 million equipment and tools. the movingssembly line was the ultimate revolut the lineeeded conveyor belts withverhead drive shafts movingaterials pasttationary workers. chains and orhead cranes moved the chassis. and r final assembly, ere were gvitylides and rollways. toy it mightook chaotic, jerrybuil but what was ey discovered enormous increases eanwas carefuy noted e odby ford manage. throughout the entire plant. but what was r example, the time to produce the chassis-- eanwas carefuy noted e odby ford manage.

the mainssembly line-- decreasefrom about12 1/. the timeorngine assembly also decased from about 8 1/2 hou downo approximately 2 urs. there were increasesmbly of 200% up to 80 in the productivity at the ford highland park ant. each worker had more equipme aund him. though wages doubled, output increased more. inwoears,mol t production rose from 78,000 to 500,000, anthe price came down $600, then in 1916 to $360 a car. here, indeed, was more than t farmer's car-- the ford revolutio uly d massive impactman. beyond theodel t. what happens is,e ford o

then they move from industry tondustry. what happens is,e ford o it becomes a natiol,in facto movement. there's fordisimusn germany, what happens is,e ford o everybody is trying to copyion. fo's system of production. t its meaning extended mightbeyond detroit itill not be forgotten. [honk] henry ford supplied more tn e model t. wesked economic analystomic. richard gi to discuss factors that contribute incased productivity. wesked economic analystomic. richard gi we have hearthe slogan,"there's" there was a prominent fo inur past.

henry ford gave us a lesso on the facto he showed us thatathat in many iusiesbigger . e of the rapidly growingamerit to exploit what economists call economies of scale. as he increased production, his average costs pecar fell, enabling himo lower the price and expand pduction. secondxpandingncreased e amount of machinery, plant, and equipmenteach la. thisas an increase in the capital/laboratio it was exemplified by tse cs,chai, and drills that his worke used. thirdly, he did everything in new ways. andesigned a different product.more

he was, accoing ithe great economis pducti- thjoseph schumpeter, an entrepreneur and an iovator. it haseesaid thatankee know-how made america great. henry ford was one yankee who did know how. space. the race to reach beyond the limits of this planet captured the country's imagination in the 1960s. for decades americans haveupported a major instment in the sce program and its accomplishments, like communications satellites. how does thissatellites far-out technology come down to simple dollars and cents? early is century, telecommunicatiople went where wires went. fiiraculously, across the street,

then wire went under the ocean, telecommunicatiople and europe was on our doorstep. by t late fifties, inational communications was busy. telstar, 1962. russian pre-eminence in space was more of a boost to telstar within three years,emand. 100 transatlantic circuits were in use. by 1980, 20,00circuits connecd american business toll parts of the globe. leasing a circuidroppeto 1/7 of. today, t private sector is having its own satellites deployed, what can this foproductivity on earth?systems.

through o conferencing top coorate management what can this foproductivity on earth?systems. can now get a round table with counterpas and customers in europe or asia. participants are in awe of t new opportunities. that the camera sees all is often forgotten. sometimes it's safest to stick to old questions. how's your weather? it hasrightened up. american banking is thoroughly at home with global technology, servicing american companies instany, wherever ty may besupport on any for an american multinational is described by chase manhattananker michaeurkowitz. is described without e instantaneousavaio that corration might have had idle funds sitting in its accou in frafurt, while athe same time sitting with possibly an overdraft

win around the worldploybsn. cits financial resources technology comesown to earth when it afcts your own pocket. lsatellite communication has an impact on the availability of personal credit just as i can usemy visa cad et cas inhe unid states just as i can usemy visa cad i can use my visa card while traveling overseas, again get cash. t those activiesequire which alws theankons or t merchanty network to validate that thas a good card with sufficient creditinebehind. or t merchanty network so in busiss to validate that thas a good card managementfficiency,

in banking for both coorations anindividuals, how important is the fieldng producviof communications to national economic growth? albert halprin of the fcc. how important is the fieldng producviof communications of information transfe is aitalenal par wofhat mar companiesowing rn veo to operate. day, virtually 50% of our gross natiol product is involdictly oinrecy wi informationse antransferadvaes in comy provide huge oortunities r grow inanagement oductivi. perhaps unwittingly, perhaps lically, american business was launched inanageminto a new era by those early satellites perhaof the sixties. futuristic space technology

has rebounded to earth to spur . it's notnly opened upites relying on communicaons.ndustrye inonsideringheenefits of isommucaons volution, weeep comingcross the phrase w technogy-- inosatellite ciuits,beopticsdi, isommucbys, megabytes. is this typical of economic growth? est always involve new techlogies? we asked ricrd gill comment new technogies seem to be est always involve new techlogies? anmporta factor in economic grow, new technogies seem to be est alwanojustolve in satellite tecology, but quite generally. one american economist who has studiethis question he listed e factors thato into our growing g their relative importance thenm r e riod1929ough 1969,

he came to t following g their relconclusions.ance thenm fit, he und that u. gnp had growover that 40ears at aaverage of 3.3%te peyear. about 1.3% of ts growth denison attributed the simple expansionwth of population and labor. another .5% he aributeth n increase inhe quaity of macneseth that t expanding labor force had to work with--neseth capilt accumulation. labor force these two items represenseth the growth of inputs-- capital anlar-- and do not cessarily represent any new way noticehe bigs. remaining item near half e growth rate, which represents increased output per unit ofnput. this is really where technolocical progress comes into play. where

rewe areealing advances in knowdge,s, e increased education and skills of the r foe. it's responsible for nearly hao, and on a per capita basis, perhaps 75% or 80% of our growth. so t case of satellite commucations is not really exceptional. ever sincehe sam engine, new technology has been systematically revolutionizing our lives. growth in many parts of the world, growtheans growth of population, growthn poverty, growthn e scarcity of resources. today in america, we take economicrowth and oustandard of living for granted. what iraw maals run out? whatf pulationanpollution?

in97rissued a report called thee the limits to growth. what did they predic and could they be righ whaton population... if current growth ratescoi, wod populaonildouble by t yea2000. when ourrandchildren are ol e polation will have ubled agai consequent pressure on land anodupplies would beremeous. widespad famine and malnutrition would be all-pervasive on industry... the port concluded at if mineralsnd metals weonsumed global supplies would be exhaustein a few decades. they were called the club of rome because they met there. the writers of the limits of growth

came from m.i. jay forrester, a group consultant, summarized their conclusions. the forces are like an onion. peel off one layer, thanother limit. uthat make it impossible a combination of forces fothe high growth rate ofndustrialization and e highrowt of population to continue thugh the ne century. population jay forrester recounts their dire prediction on forces which willalt those forces can be social perception popution growth. that smaller familiesare ney to long-term gh quality of life. or it wi come about byhe sheer pressures of starvation or the social instabilities that will precipitate an amic war.

i thought there wasa large. while a professor at yale, henry wallicbegan to confront the doomsayers some years ago, i guess 10 years ago i think they'veections gradually come downople. because population growth has diminished and yieldeto the effect of higher standards of living. with higher standards of living and government persuasion, population growt can level off. disastereed not strike on pollution, political considerations are as important as economic ones. anitpollution technologies are available, and the costs of cutting back emissions and cleaning up can be passed to consumers. another major subject in the limits-to-growth thesis involves basic resources, minerals and oil.

shorges we imminent, said the growth-busters. in thearly seventies, eyot a boost for their cause. one of thetriking things fothe club of rome was, after the book came ou in thearly seventies, eyot a boost for their cause. oil prices jumped up four times. people said, "uh-huh, they're right." then five or six years later, it jumped again, so that seemed to be pretty good evidence. now the price of oil is going down. people are not concerned about a basic shortage in the long-distant ture. is going down. the cartel is breaking apart. surely oil will run out not so, say oilmen.s. as long as there's a profit, new technology will keep supplies flowing.

dr. ed david is president of exxon research corporation and a white house science adviser. with respect to discovering more, geologists today believe that you can use tomographic techniques, which are similar to what is used in the catscanner for diagnosing disease, for searching in the earth for new deposits of material. there are many new exploration tools such as satellites. the impending exhaustion of energy and mineral supplies had been predicted before-- in 1908, 1944, 1952. by now many minerals should be extinct. none is. a major survival factor has been substitution between metals and between alternative forms of energy. such conservation will continue to prevent long-run shortages. besides, the earth's crust is 30 miles thick.

we've barely scratched thsurf no wonder the doomsayers have been proved wrong. it seems unlikely that economic growth will stop because of too many people, too much pollution, too few resources. yet worldwide, there are vast differences between standards of living. in the next century, americans may accept lower growth rates as the rest of the world catches up. even though we've come to a slowdown, this is nothing fatal, not a collapse, as limits suggests. low growth rate is not as good as high, but it's certainly better than stagnation. the real point of these models is that man can learn to control his own future. we do have an influence on our future.

we can think about what we want it to be and push it in those directions that will result in a liveable world. public prophecy about economic conditions 50 or 100 years in the future is difficult. many experts believe that new technologies and motivations of the marketplace are likely to overcome doom and gloom predictions. we asked analyst richard gill what our economic past may imply about the future. during her industrial revolution, great britain was running out of forests. she responded by shifting to a coal technology. production increased many times over. that has been the story of modern economic growth. we see it today in metals like copper and energy sources like oil.

this scenario isn't accidental. it is built into the way the market mechanism works. we have first a growing shortagf it iits price goes up,ay the market mechanism works. setting in motion a series of responses. first, it becomes profitable to try to find more-- we getdded supply. it becomes advisable to use as little of this resource as possible-- we get conservation. thirdly, it becomes desirable to focus our scientific and technological attention on developing new products and means of production that use other resources-- alternative technologies. historically, there is little doubt about the matter. responses have not only met the resource shortage problem, but have overshot the mark by a great margin, leading to increases

in productive potentialities. with population growthand p, it is difficult to be so clear. in the matter of pollution, as i've noted in earlier programs, the price system can't solve the problem by itself. active preventative steps will have to be taken. even in the case of pollution, new technology is likely to help considerably. my personal conclusion-- we may eventually choose to abandon a growth-oriented society. i doubt we'll be forced to, certainly not in the years immediately ahead. the recipe for economic growth. henry ford knew its ingredients. so do today's businessmen and entrepreneurs. what has been true for autos and communications will be true in the future as we strive for reasonable growth.

balanced by protection of the environment. then productivity can be safely increased to supply the demand of our people. for economics usa, i'm david schoumacher. captioning is made possible by the nenberg/cpb project captioning performed bytheg institute, inc. captions copyright 1986 educational film center

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annenberg media ♪ annenberg media ♪ it was 1927. once again, havoc reigned throughout the mississippi and tennessee valleys. during a great depression, congress created the tva-- a federal project to control the ravages of the great tennessee river. why would anyone object? medical advances have added years to americans' lives. but not everyone can afford medical care's high cost.