1914. from one man in one factory in michigan came a global revolution. the revotion todayivity is icommunications,? but when sce-age tecology comes down to earth, es it real dri econsare numbered,aysof ourh

thatoon therwot beenoughasic ra. are e opts ofoom coect? this has been america's century. thatoon therwot beenoughasic ra. giant stepspts of economic growth ha taken usom the auto e thatoon therwot beenoughasic ra. our real gross nationaproduct ohas increasetenfold. our al income r rson has tripled. can we keep up the pace? wi the help of anast richard gill we'lexamine that questio

othe improvement in our standard of living caie oueconomic growth since 1900. average woers enjoy the times as many goods. alofs because of a continuing increase in productivity, e engine of growth 70 years agoin theuto i. how did it begin? why was it successful? turn of the century autos their purposengs was not wholly clear. peaps they were stin static pos.

certainly, auto industry growth was static. doze omodels designed and produced diffently-- e culmination of9tceury craftsmap. with buyers likestors, vanderbilts, e culmination of9tcwhitneys, and winthrops setting the fashion, $5,000 a car-- $50,000 in today's dollars-- seemed nothi extraordinary. in aichigan machine shop, there was another idea. could you gea car for under $1,000? in905, most of these cars therwere around $2,000. hey forda junior partner, in90oposed less expensive therwere aromodel n.00. his seor partners argued for the more expensive model k. alexander malcolmson and friends lost when ford bought them out with borrowed money. thereafter, the fordould be self-financing, wi hen ford inontrol.

first,e signed e right ca theodel t. ma for farmers, they'd lurchhrough mud, ford streams, plow through the snow. there were still only 200,000 cars in a country of 89 million people. if ford could get the price wn to $600, he could tap that vast market. but how? how to improve productivi? autondustry historian stephen meyer. he could tap that vast market. bor turnover approached 370%. the quit rate was 37 of the woorce nearly doubling the unskilled workers' wages

to provide the financial incentive for the worker to produce at a much faster rate and a much faster pace. ford got a grip on labor by doubling s workers' wages, longewould cars be builtsts in one place from bottom u the product and its parts would ve to be sndardized. fordaid he wanted to make automobiles come through theacry all alike, the model t fo was a compcated product. when it comes om the pinactory.n it had about 5,000 parts. you could produce that part in largeumbersery cheaply if those parts never changed. onceof standard mol principle in lof automobile cheaply

along with large runs ofhat automobile, then you can sit down anday, "i'm going to build my factory to produce parts over a over again." this is important for machine tools and equipment. by 191 ford to produce parts over a over again." had completes plant. highland park costalmost $4 miln withn additional investment of 3 million highland park costalmost $4 miln the movingssembly linewas t. equipment and tools. the lineeede conveyor belts wiverhead drive shafts movingaterials st stationary workers. chains and orhead cranesmov. and r final assembly, ere were gravity sdes and . today itightook chaotic, jerrybuil

they discovered enormous increases ere but what was sdes and . e prby ford manage anwas cad throughout the entire plant. r example, the time to produce the chassis-- the main assembly line-- decreased from about 12 1/2 hou to 1 1/2 urs. the timeorngine assembly also decased ombout 8 1/2 houom about down to approximately 2 urs. there were increases of 200% up to 80 in t pductivity at the foeach worker hadk ant. more equipme aunhim. thoughages doubled, output ireased more. in t pductivity at tinwo years,mol t production more equipme aunhim. rose from 78,000 to 500,000, ane price came dow600 a ca then in 1916 to $360 a car. here, indeed, was more than t farmer's car--

the ford revolution trulhad massive impactman. whatappens is,e ford meo beyond t model t. veryapidly difse through deoit. in fact, an inrnationa from industrmovemendustry. eeverybody is ting opyovieunion. ford's system of production. t its meaning extended beyond detroit itill not be forgotten. [honk] henry ford supplied more than the model en. he gave usodelof economic gt chard gi

to discuss factors that contribute he gave usodelof economic gt to incased pctivity. we have arthe slogan,"tre's a f" there was a prominent fo inur past.hey ford gao on t factors of the rapidly growingamerit thatathat in many indusiesgger e to exploit what economists call economies of scale. as he increased oduction, his average costs per car fell, enablingim to lower the price and expand pduction. secondly, he incased labor productivity by expanding the amount of machinery, plant, and equipmenteach la. this was an increase inhe capital/laboratio it was exemplified

this wby tse cras,chai, and dris inhe capital/laboratio that his workers used. thirdly, he did everytng in new ways. and designed a different producmod. introced a novemeodof pcti- e assembine. he was, according e greatt joseph schumper, an entrepreneur e asand an iovator.it has bd thatankee know-how mademeca great. nry ford was one yankee who did know how. space. the race to reach beyond the limits of this planet captfor decadestry's americans haveupported0s. a mar investment in thece program anits accomplishments, ke communications satellites

wi these sateltescame question,s far-out technology come down to simpledoars and ce? early is century, telecommunicatiowent where . fiiraculously, across the street, teomity cit telecommunicatiowent where . then wire went under the ocean, and europe was on our doorstep. by t late fties, inational communications was busy. telstar, 1962. russian pre-eminence in space was more of a boost to telstar than was economic demand. wiinhree years, 100 transatlantic circuits were in use. by 1980, 200circuits connecd american business to all parts of the globe. leasing a circuidroppeto 1/7 oi. today, trivate secto is having its own satellites deployed,

what can this doelte bu. for productivity on earth? through o conferencing top coorate manageme what can this doelte bu. for productivity on earth? through o conferencing can now get a round ble with couerpas and customers inurope or asia. paicipants a in awe of tew opportunities. that the camera sees allis n sometimes it's safest to stick to old questions. how's your weather? it has brightened up how's your weather? american banking is thoroughly at home with global technology, servicing american compaes instany, for an american multinationalrty is described by chase manhattananker michaeurkowitz is described bwithouthe techlogy,ker

without e instantaneous availabili oinformation, that corration might have had ie funds is described bwithouthe techlogy,ker sitting in its accou in ffurt, while at theame time sitting with possibly an overdraft with this technology, subst. in effect, ful deploy cits financial resources around the world technology comesown toarth when it affects your own pocket. lsatellite communication has anmpact on the availability of personal credit just as i can usemy visa cad toet cash inhe unistates just as i can usemy visa cad i cause my visa card while traveling overseas,ag. t those actiesequire a tecommunications and techlogy network

which alws theankor the mert to validate that thas a good card with sufficient creditinebehind. so in business to validate that thas a good card management efficiency, in banking for both coorations and inviduals, so in business to validate how important is the fieldng producviof communications, to natiol economic growth? albert halprin of the fcc. telecommunications is a vitalenal part of informationransfer, which is a largeangrowing ro ofmajor companies haveo to operate. day, virtually 50%growing ro of our gross natiol product is invol ctlyinrectly with iormationse and transfer ades icommunicationstechgy with iormationse provide huge oortunities r grow inanagement oducvi.

perhaps unwittingly, rhaps potically, american business was launched inanageminto a new era by those earlyatellites rhapsof the sixties. futuristic space technology s rebounded to earth to spur pr. it has ireased totential ofusins relying on commucaons. iustry. inonsidengheenefits of weeep comicross the phrase isommucw technogy--n, s rebounded to earth to spur pr. it hsatellite ciui,ntial ofusins relybeopbytes, megabytes.stry. is this typical new techlogies?h?esalways ie wesked ricrd gill omment new technologies seem to be is this typical new techlogies?h?esalways ie an importa factor in economic growth, nojustchnologies seem to be is this typical in satelliteecology,lways ie buquite generally. in economic growth, one american economist who has studiethis question

is edwardeniso and en weighteemur growinghisto, their relative importance.r e , he came to t following conclusions. fi he found that u. gnp had at aaverage of 3.3%ars peyear. about 1.3% of ts growth denison atibuted t simple% expansionwth of population and labo another .5% he aributeth ton increase inhe quaity of macnes that t expanding lar force d to workty with--nes capilt accumution. lar force these two items presennes e growth of inputs-- and doot necessarily represent any w way

noticehe bigs. remaining item near half the grow rate, which represents increased output per unit ofnput. this is really where technolocical ogress comes into play. where rewe areealing with new technologies, adnces in knowledge, e increased education and skills of the lar foe. it's responsible for nearly hao, adnces in knowledge, and on a per capita sis, perhaps 75% or 80% of our growth. so t case of satellite commucations is not really exceptional. ever since the sam engine, new technology has been systematically revolutionizing our lives. growth inany pas of the world growth means growth of population, growthn poverty, growthn the scarcity of resources.

today in america, we take economicrowth and oustandard of living for granted. what iraw marials run out? whatpulation anpollution get out of hand? in97 issued a reporcalledas t ce the limitso growth. what did they predict, and could they be righ in97 issued a reporcalledas t ce the limitso growth. on population... ifurrent gwth rascontinue, wod populationill double by t year 2000 when our grandchildrenare ol ifurrent gwth rascontinue, e potionwill have ubled again. wod populationill double by t year 2000 conseque pressureon land and ods would be tremendous. widespad famine and malnutrition would be all-pervasive. that if minelsnd metalshe port d

weonsumed exhaustein few decades.e,globale they were called the clubrome cause they methere. they were called the writers of the limits of growth came from m.i. jay forrester, a group consultant, summarized their conclusions. the forces are like an oon. peel off one layer, and there's another limit. the forces are like an oon. uthat make it impossiee a combination of forces r the gh growth rate ofndustrialization and the highrowtof populatin r thto continue rate thugh the ne century. pulation. jay forrester recounts their dire prediction on forces which willalt popution gwth. those forces can be social perception that smaller families are necessary long-termrces gh quali of life.ception

or it wi come about by the sheerressures gh quof starvationeption or the social instabilities that will precipitatean atoa i thought there was a large scare element in it. while a professor at yale, henry wallicbegan to confront the doomsayers. some years ago, i guess 10 years ago, i think they'vetions gradually come downople. because population growth has diminished and yielded to 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 consume. another major subject in the limits-to-growth thesis invoes basic resources, minerand oil. shorges were imminent, in tsaid the growth-busters.is in the early seventieseyot a boost for their cause. one of thetriking things for e club of rome was, shorges were imminent, in tsaid the growth-busters.is in the early seventieseyot after the book came out, 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 bepretty . 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. 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 thsurfe. 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 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 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 get added supply. it becomes advisable to use as lile 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 growth and pollution, 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

annenberg media ♪ for information about this and other annenberg media programs call 1-800-learner and visit us at www.learner.org. i'll get that one. must be careful. well, that's a nice picture. come on, anna. ok.

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