All Commentary
Sunday, May 1, 1955

More Machines Mean More Jobs

Nearly three centuries ago, an inventor in Danzig built a loom that could weave six webs at once, and the authorities promptly suppressed it in order to protect the poor. But the “poor” were not appeased. They wanted no more such machines. So they seized the hapless inventor and drowned him in a nearby creek.

Then at the outset of the so-called industrial revolution in England, mobs of angry workers broke into the mills and tried to destroy the new automatic machinery which they feared would leave them jobless. And in those days, of course, such fears were entirely understandable. Since a machine did the work of many men, it was only natural to suppose that it would destroy the livelihood of an equal number of men. But it didn’t, as we know.

Today, from our vantage point in history, we can look back upon those early times and read the truth: That it was the machine alone which enabled England to support her rapidly growing population and provide it with a rising standard of living. In countries like India and China, where mechanization did not occur, the standard of living fell far below subsistence levels, and the population was decimated by starvation and disease.

So machines and tools have proved, beyond doubt, to be the greatest single source of man’s material welfare; but his fear of them has persisted, right down to the present day, and some of you will recall that about twenty-five or thirty years ago such fears were widely prevalent here in the United States.

In those days, one of the popular plays on Broadway was a thing called “R. U. R.,” and it brought the word robot into our language. That word frightened us for quite awhile. Technological unemployment became the subject of national debate—both in and out of Washington. An economic school of thought, known as Technocracy, enjoyed widespread publicity. And later on, a gentleman who is still a member of the United States Senate publicly declared that “Science and invention are to blame for the present unemployment in America!”

But the American people refused to accept this fatal philosophy of fear; and this was fortunate indeed, because most military experts now agree, I believe, that the decisive battles of World War II were fought and won on the production lines of American industry. They were won because American investors continued courageously to pour their savings into the best available tools of production; and because American labor had the wisdom and the skill to use those facilities to the greatest possible advantage.

Yet today, the same old blind, unreasoning fear of machines is reappearing among us; and the most curious thing about this new campaign of propaganda is that we are being frightened—not by the advance of technology itself—but once again by a strange new word that few of us understand. This time the word is automation instead of robot, but it means just about the same thing.

Among the engineers who coined it, the word automation is merely a term which conveniently describes certain mechanical controls and processes. There is nothing frightening about it, nor is there anything basically new about the mechanical principles to which it applies.

But to thousands of our people who do not understand its meaning, it suggests a brand new class of machines—different from any which we have ever had before and so superior to man himself that, ultimately, they may rise, like Frankenstein’s monster, to destroy us all. Thus the word alone is enough to conjure up visions of a wholly-automatic factory where machines with super-brains will grind out products, 168 hours a week, without any human payroll whatever.

And these fears, of course, are just plain silly. There are no such factories and no such machines; nor Will there ever be, either in my time or yours! But propaganda is a powerful thing; and it is growing louder.

A recent headline in a New York newspaper says: “Automation Putting Humans in Outfield.” And statements from some of our labor leaders are even more alarming. They demand that the government set up a vast welfare program to relieve the suffering that they think automation will bring. They also declare that automation must be offset by a guaranteed annual wage, which would presumably impose heavy penalties on the installation of labor-saving devices and thus retard all technological progress in America.

So automation has become a menacing word—a kind of modern bogey-man with which to frighten our people. And as I say, it is proving effective. A few months ago, the Public Opinion Index took a poll among more than a thousand factory workers, and asked them two questions: First, did they favor the use of more new and improved machines. They did, by about three to one. Then they were asked how they felt about more automation. But they opposed that, three to two!

Yet the two things, of course, are really identical. There is nothing new about automation except the word itself. The facts of automation—and the mechanics of it are older than our own American Republic.

Back in 1784, before our Constitutional government was established, a man named Oliver Evans went out to the banks of Red Clay Creek near Philadelphia, and built a flour mill that was just about as automatic as any mill can be. A system of conveyors, run by water power, picked up the grain, carried it through all the grinding operations, and delivered the finished flour. But when an auto manufacturer in Detroit builds a plant which handles engine blocks in exactly the same manner, we think it’s something new, and it worries us.

Nowadays, too, we marvel at the modern business machine which writes checks and keeps records through the use of punch-cards. And on our production lines are other wonderful machines which are automatically controlled by a punched paper tape. But is this really new? Oh, not at all.

More than 150 years ago, a Frenchman named Jacquard built an automatic loom which wove all kinds of complicated patterns in accordance with instructions that were also punched in paper. And that invention was not suppressed by the authorities. Eleven thousand such looms were set up in France alone!

Then there is still another form of automation which is described in the jargon of my fellow engineers by such mystifying words as servo-mechanisms and the feedback principle. But we’ve had all those alarming things right in our own homes ever since we first installed a thermostat to regulate the furnace! We’ve even had automated music in the form of the player-piano; and as George Gobel would say: “You can’t hardly find them no more, these days!”

So let’s face it: This thing called automation is simply evolution—not revolution. It is only another little step in the slow and plodding progress of man towards a richer, fuller life, and a better, freer world.

Over the centuries man has accomplished an amazing industrial miracle. He has surrounded himself with luxuries, and greatly lengthened his hours of leisure; but no machine that he ever devised has made us humans obsolete.

Suppose we think for a moment of the three outstanding examples of automation that we have seen in our lifetime:

The first one that comes to mind, probably, is the dial telephone. We would naturally assume that it must have thrown thousands of telephone operators out of work; and some of the current propaganda on the subject would seem to confirm that assumption completely. But what are the facts?

Well, the latest federal census, taken in 1950, shows that the number of telephone operators in this country increased by 159,000, or 79 per cent, in the previous ten years. And still the Telephone Company keeps on advertising for more!

Then next we come to business machines and these fabulous new electronic brains that we’ve seen on television. Surely we don’t need accountants any more. But still the census shows that the number of accountants and auditors increased 71 per cent in this same ten-year period.

And how about these so-called automatic factories in Detroit, where the word automation was thought up? Are the automobile workers losing out? Well, not by a long shot. Their number doubled in fourteen years. Automobile mechanics and repairmen have increased 75 per cent. And for every new job in the auto industry it is estimated that five new jobs are created in allied fields which supply the raw materials and components that go into the manufacture and equipment of new cars.

But this, of course, is not always the case in every industry and every occupation. Dislocations do occur in some instances, and men do have to change from one job to another. That has been true in farming for nearly 40 years. With the falling demand for coal, employment in the mines has also dropped off substantially, and there is recent evidence of a mild decline in oil refining, for example.

Now where are these men to go? Has automation made it tougher for them than it used to be? Let’s look at the picture as a whole and see for ourselves just what really has happened in the last fifteen years or so—say from 1939 through 1953. Well, here are the facts:

During this period the population of the United States has increased 22 per cent. But the total number of jobs has grown by 35 per cent—or more than half again as much. And in the field of manufacturing itself—where automation has advanced most rapidly A employment has gone up 73 per cent, or more than three times as fast as the population.

The record clearly shows moreover, that this rapid increase in employment has occurred chiefly because of mechanization—not in spite of it! The building of machines themselves—plus their installation, maintenance and the construction of new factories to house them—has opened up thousands of job opportunities that never existed before.

Employment in the field of electrical machinery, for example, has more than trebled during this period. In other machinery it has increased by 150 per cent. And in the specialized field of automation itself, the mere manufacture of the necessary instruments of measurement and control has mushroomed into a three-billion-dollar business which already employs as many men as the auto industry did in the middle 1930′s.

But that is only the beginning. As mechanization has enlarged the output and the purchasing power of our people, it has also multiplied enormously their demand for services. So they, in their turn, employ more doctors and dentists, more engineers and scientists, and more teachers and clergymen. They send out more of their laundry, and they eat more often in restaurants. Even the fact that they have more leisure time has created more jobs for others. Employment in tourist courts and camps has more than tripled. Theaters, movies, amusement parks and similar establishments provide 75 per cent more jobs than formerly. The purchase of books has doubled, and expenditures for home music have trebled. And so it goes. Employment in the service industrie.

The same thing has happened, too, in the general field of trade. As the volume of production has increased, it has taken more workers to sell and to handle these goods. And thus, six million new jobs have been opened up by the growing employment demands of department stores, shops, offices, builders, bankers, utilities, bus lines, trucking companies, and others in this category.

And finally, of course, our advance in technology has created whole new industries, and vast new fields of opportunity, in television, antibiotics, air conditioning, many new branches of electronics, and now, in atomic energy—just to mention a few. So with each passing year, and with every new invention, our people have a wider choice of jobs; and today, it is reported that there are more than forty thousand different ways whereby Americans can earn a living!

But suppose, for example, that all technological progress in the auto industry had stopped back in 1908, and that we were to try to build a 1955 car, at today’s wages, with the tools and machines we used then. Such a ear, if it could be produced at all, would cost well in excess of $65,000! How many cars would there be on the road? And how many roads would we have? How many jobs would there be in Detroit, and in the oil fields, and in the tire-making industry or even in our steel mills for that matter? Why, millions of our workers would be idle, and America would rank among the so-called backward nations of the world provided, of course, that we had been able to survive at all as a free and independent people.

So the time has come, I think, to nail this vicious propaganda for the miserable fraud that it is. The facts show that only through the widest possible use of new and better machines can we hope to achieve the fullest measure of employment and a higher standard of living.

And while we are at this business of nailing, let’s tackle another dangerous deception that the busy propagandists are perpetrating these days: That is the charge that the greedy owners of industry have grabbed the lion’s share of the fruits of technology, while the workers have been robbed of the rightful rewards of their mounting, mechanized production.

Now fortunately, the true facts of this matter are readily available in a study which was made by Allen W. Rucker, and published by the Eddy-Rucker-Nickels Company of Cambridge, Massachusetts. This study covers the 33-year period from 1914 to 1947—a whole generation during which the two great wars of this century were fought, and when American industry was undoubtedly making some of the most important and fundamental technological progress in its history. Moreover, Mr. Rucker’s analysis is based entirely on the United States Census of Manufactures and other official government reports; so I do not suppose that anyone will challenge the authenticity of the facts which he presents. And this is what they show:

They show that on a man-hour basis, over this entire period, the output of the men and machines in American manufacturing as a whole increased by 161 per cent; that the real wages of the workers, measured in terms of purchasing power, increased 157 per cent, and that the relative prices of manufactured products, measured in terms of hourly wages, declined 61 per cent.

In its findings, therefore, the report states that the real wages of the worker have advanced “at almost exactly the same rate as the improvement in productivity.” It adds that under the American system of manufacturing, the advance in such wages “depends wholly upon advances in productivity.” And it declares, in conclusion, that the manufacturing industry on the whole has passed on to its customers and employees “virtually all the ‘savings’ from increased productivity”—that rarely, and only temporarily, have the owners retained any gains whatever from this source.

And in further support of Mr. Rucker’s statements, I should like to call your attention to one additional fact which is not contained in his report: That back in 1914, the share of the national income which went to the owners of business in the form of dividends was about six per cent; but in 1947, their share amounted only to about three per cent. So over this 33-year period, the owners who put up the money for all the machines that made increased production possible, found that their slice of our total economic pie had been cut approximately in half.

It may well be asked, of course, why industry continues to spend billions of dollars upon the development and purchase of improved machines if its owners receive no direct gains from these expenditures. And the answer to that, as we know, is all bound up in one simple and compelling word: competition.

When any business in America fails to keep its plants modern, and thus allows its more efficient competitors to undersell its products in the market place, then that business is on the way out. Unless it can recover its lost ground quickly, it is through. The money that its owners have invested in it will be largely wiped out—and so, of course, will the jobs of all of its employees.

So in a very important sense, technological improvement is simply the process by which we protect, not only the investment of the owners, but also the job security of every industrial worker.

Benjamin F. Fairless is Chairman of the Board of United States Steel Corporation. This article is extracted from an address titled “Our One Indispensable Weapon,” February 11, 1955.