1914. from one man in one factory in michigan came a global revolution. the revolution todayity is in communications,o but when space-age tecology comes down to eah, es it realri econsare numbered,sof our ew thatoon therwon't beenoughasic . are the propts ofoom coect? is has been america's century. giant steps of economic growth have taken us om theuto age to thepace age. our real gross national product has increased tenfold.

our real income r peon has tripled. can we keep up the pace? our wi the help of ast richard gill we'll examine at question

othe improvement in our standard ofiving can ie our economic growth since 1900. average woers enjoythree times . alofs because of a continuing increase in productivity, the engine of growth. a productivity revolutionto. in the auto industry, how did it begin? why was it successful? turn of the century autos were playthings of t rich. their purpose was not wholly clear.peaps . certainly, auto industry growth was static. doze of models designed and produced diffently-- the culminationof9tceur. with buyers like astors, vanderbis, the culminationof9tceur. whitneys, and winthrops

setting the fashion, $5,000 a car-- $50,000 in today's dollars-- seemed nothing extraordinary. in a michigan machine shop, there was another idea. could you get a car for under $1,000? in905, most of these cars we around $2,000. henry forda nior partner, in90oposed less expensive we arounmodel n.. his senior partners argued for the more expensive model k. alexander malcolmson and friends lost when ford bought them out with borrowed money. thereafter, the ford would bese, wi hen ford in conol. rst,e signed e right car, theodel t. ma for farmers, ey'durch through mud, ford, plow through the snow.

there were still only 200,000 cars in a country of 89 million people. if ford could get the ice wn to $600, he could tap that vast market. but how? how to improve productivi? auto industry historian stephen meyer. he could tap that vast market. labor turnover approached 370%. the quit rate was 370% of the woorce. he's whee gee y-- 54,000orkers year.000, nearly doubling the unskilled workers' wages to provide the financial incentive for the worker to produce at a much faster rate and much faster pace. ford got a grip on labor by doubling s workers' wag, but he had to cut costs radically elsewhere.

no longewould cars be builtr in one place from bottom up. the product and its parts would ve to be sndardized. no lfordaid he wanted builtr in oto make automobilesm up. come through the facry all alike, just like a n the model t ford was a compcad product. when it comes om the pinactory. it had about 5,000 parts. you could produce that part in large numbers very cheaply if those parts never changed. onceof a standard molrinciple of automobile along with large runs of that automobile, then you can sit down anday, "i'm going to build my factory to produce parts over and over again." this is important for machine tools and equient.

by 1914, ford d completes plant.ghla parkn with an additional investment of 3 million equient and tools. the movingssembly line was the ultimate revolution. the line needed conveyor belts withverhead drive shafts movingaterials sttationary workers. chains and orhead cranes moved the chassis. and r nal assembly, ere were gravity slides an. today it might look chaotic,errybuil they discovered enormous increases ere buwhat wasty slides an. e odby ford managenwas cafud throughout the entire plant. for example, the time to produce the chassis-- ere buwhat wasty slides an. e odby ford managenwas cafud the mainssembly line--

decreased from about 12 1/2 hours to 1 1/2 urs. the time forngine assembly also decreased from about 8 1/2 hours down to approximately 2 urs. there were increases of 200% up to 80 in t productivity at the ford highland park plant. each worker had more equipment aunhim. thoughages doubled, output ireased more. in two years,mol t production rose from 78,000 to 500,000, and the price came down $6, then in 1916 to $360 a car. here, indeed, was more than the farmer's car-- e ford revolution uly d massive impactman. beyond the model t. what happens is, e ford metho veryapidly diffuse through detroit. beyond the model t. then they move from industry to industry.

veryapidly diffuse through detroit. in fact,n inrnational, movement. beyond the model t. teverybody is trying to copyion. fo's system of production. this tinize might ok much, t its meaning extended beyond detroit this tinize mighand the auto age. it will not be forgotten. [honk] this tinize mighand the auto age. henry ford supplied more than the model tten. he gave us aodelof economict richard gi to discuss factors that contribute incased productivity. he gave us aodelof economict richard gi we have are slogan,"tre's a for" there was a prominent fo in our past.henry rd o

on the factors he showed us that atn many indusiesbigger cae of the rapidly growingamerit to exploit what economistsall economies of scale. as he increased oduction, his average costs per car fell, enabling him to lower the price and expand pduction. secondly, he incased laboproductivity by expanding e amount of machinery, plant, and equipmenteach la. this was an increase inhe capital/labor ratio it was exemplified by those cras,chaiand dris that his workers used. thirdly, he did everything in new ways. ansigned a different product. introced a novemeodof pcti-

e assembine. he was, accoing the greatt jose schumper, an entrepreneur e asand an iovator. it has been said thatankee know-how made america great. henry ford was one yankee who did know how. 3...2...1... space. the race to reach beyond the limits of this planet captured the country's imagination in the 1960s. for decades americans have supported a mar investment in the space program anits accomplishments, ke commucations satellites t wi these satellites far-out technologyhow does s come down to simpledollars and ? early is cenry, tecommunicatio went where wires went. fiiraculously, across the street, teomity cit tecommunicatio went where wires went. then wire went under the ocean, 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 than was economic demand. within three years, 100 transatlantic circuits weren use. by 1980, 20,000 circuits connecd american business to all parts of the globe. leasing a circuit droppeto 1/7 . today, t private sector is having its own satellites deployed, what can this for productivity on earth?stems. through o conferencing top coorate management what can this for productivity on earth?stems.

through o conferencing can now get a round ble with counterpas and customersi. participants a in awe of tew opportunities. that the camera sees a is often forgotten. sometimes it's safest to stick to old questions. how's your weather? it has brightened up. american banking is thoroughly at home with global technology, servicing american companies instantly, wherever ty may support on l is described by chase manhattananker michael urkowitz. is described without the instantaneous availabi oinformatio that corporation might have had idle funds is described without the instantaneous availabi oinformatio sitting in its accou in fra, while at the same time sitting with possibly an overdraft on which it woulpay subsn.

with this technogy, in around the worldoysubsn. cits financiaresources technology comesown to earth when it afcts your own pocket. lsatellite communication has an impact on the availabilityof perso. just as i can usemyisa card et cash inhe united states, i cause my visa card while traveling overseas, again get cash. t those activiesequire which alws theankor merchant and technology network to validate that that's a good car with sufficient creditinebehind. and technology network so in busiss to validate that that's a good car management efficiency, in banking for both coorations and individuals,

how important is the fieldng producviof communications to natiol economic growth? albert halprin of the fcc. of information transfer, is aitalentral part whicis a largeand growing po oft major companies ve to to operate. day, virtually 50%growing po of our gross natiol product is involctly oinrectly with iormation use and transfer ades in communicationschlogy with iormation use provide huge oortunities r grow inanagement oductivi. perhaps unwittingly, rhaps politically, american business was launched into a new era by those early satellites rhapsof the sixties. futuristic space technology

has rebounded to earth to spur . it has increased totentialtof bs relying on communicaons.ndustry. inonsideringheenefits of is communicaons revolution, has rebounded to earth to spur . weeesatellite circui,beoptics,bs relying w technogy--ons.ndustry. gitadata, is this typical new techlogies?h?doest alwal we asked ricrd gill comment new technologies seem to be is this typical new techlogies?h?doest alwal anmporta factor in economic growth, nojustchnologies seem to be is this typical in satellite technology,buq. one american economist who has studied this question is edwardenison. and then weighted emrowing gnp their relative importance. r e riod 1929 tough 1969, he came to t following conclusions.

fit, he found that u. gnp had growover that 40ears at aaverage analate of 3.3% peyear. about 1.3% of ts growth denison attributed the simple expansionwth of population and labor. anothe.5%le he attribute ton increase that theuaity expandingute labor force d to work wi-- capiltheuaity accumution.e labor force these two items represen the growth of inputs-- and doot cessarily represent any new way of doinghings. noticeheig remaining item near half e growth rate, which represents increased output per unit ofnput. this is really where technocical progress comes into play. where herewe areealing with new technologies,

adncesn knowlee, e increased education and skills of the lar force. it's responsible for nearly hao, adncesn knowlee, and on a per capita basis, perhaps 75% or 80% of ourrowth. so t case of satellite commucations is not really exceptional. ever since the steam engine, new technology has been systematically revolutionizing our lives. growth. inany parts of the wor growth means growth of population, growth in poverty, growth in the scarcity of resources. today in america, weake economic growth and oustandard of living for grante what iraw marials ruout? whatf pulation anpollutioget out of hand? in972, aroupf experts known as the cluofome

issued a reporcalled the limits to growth. what did they predic and could ey be righ whaton population... ifurrent growth rascontinu, wod populationildouble whatonby t yea2000.. when our grandchildrenare ol e polation will have ubled agai conseque pressure on land and foodupies would be tremendous. widespad famine and malnutrition would be all-pervasive. on industry... the port concluded that if mineralsnd metals we consumed global supplies would be exhaustein few decades.e they were caed the club orome 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, and there's another limit. the forces are like an onion. ultimaly, there will be a combination of forces that make it impossible for the high growth rate ofndustrializaon and the highrowtpossible of population to continue through the ne century. population jay forrester recounts their dire prediction on forces which will hal popution growth. those forces can be social rception that smaller families are necessary to long-term gh quali of life. or it will come about byhe sheer pressures gh quof starvation or the social instabilities that will precipitatean ato. i thought there was a large scare element int.

while a professor at yale, henry wallicbegan to confront the doomsayers. some years ago, i guess 10 years ago there werojections up to 30 billion people. i think they've gradually come down because population growth has diminished and yielded to the effect of higher standards of living. with higher standards of living and government persuasion, population growth can level off. disaster need 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, mirals and oil. shorges were imminent, said the growth-busters.

in the early seventies, eyot a boost fotheir cause. one of the striking things for the club of rome was, shorges were imminent, said the growth-busters. in the early seventies, eyot after the book came out, a boost fotheir 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 future. is going down. the cartel is breaking apart. surely oil will run out in a few decades. the cartel is breaking apart. not so, say oilmen. 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 thsurfac

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 ars 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 macan 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 newechnologies 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 shortage of some resource. its price goes up, 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. there must be technology and investment in it,

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. why shouldn't the government