Growth in productivity isn’t everything, but as an economic barometer, over the long-run, it is far more important than the more-attention-getting short-term fluctuations in unemployment and inflation. Getting more goods and services to meet people’s needs and wants out of a given set of resources is vital to an economy. That is exactly what “improved productivity” is.
And if society’s consumption levels are high enough, productivity growth also reduces the natural resources and labor needed for current levels of living.
Productivity gains can stem from more tools or machines per worker, better technology, or better organization of existing technology and machines. In the real world, rising productivity usually stems from a combination of all three. Improved productivity is evident in our daily lives in many ways, but we often fail to recognize what is right in front of us.
Consider food. Minnesota farmers are experiencing the most delayed planting season in 40 years. Yet no one worries about food shortages or rising prices, as might have been the case through most of human history. This may not be a year of record crop yields. But they still will likely be five or more times what they were when my grandfather came to Minnesota and double when I quit raising crops myself in 1977. At most, the unfavorable weather will cause a minor blip in world commodity prices and nothing for consumers at the checkout counter because of high and rising productivity in agriculture.
Growth in farm production per acre, animal or farmer occurs in varied ways.
Successfully hybridizing corn was a major step in boosting yields. This resulted from government-funded research at land-grant colleges, but also from the speedy implementation of the new technology by family-owned seed companies, now absorbed into major corporations.
Synthetic fertilizers were known before hybrid corn. The U.S. government had built a large nitrate plant at Mussel Shoals, Ala., for munitions use in World War I that was converted to plant food manufacture. But use of such fertilizers and their custom blending to match soil tests in specific fields did not become common until the 1950s. Herbicides and insecticides contributed to yields, although their residues and those of fertilizer pose serious environmental problems. Tillage operations have been much reduced and soil erosion is much lower than 80 years ago.
With differential GPS technology, seeding rates and quantities of specific nutrients can be calibrated to specific areas within fields, reducing chemical use and boosting production. The GPS part came from tens of billions of dollars in defense spending, with no thought toward such “precision farming” or finding one’s way to the nearest garage sale. The “differential” part is run by MNDOT because the signal that turns each row of a 24-row planter off individually at a slanting field end also will guide a snowplow.
Combine sensors allow harvesting at faster rates with lower losses. The original technology came out of sonar hardware and software for detecting Soviet subs, just as did much of the 3-D seismic imaging that facilitates getting oil from formations in North Dakota.
I saw new evidence of ongoing adaption of technology to farming a week ago in Murray County. A friend had scouted the many fields that make up the nearly three square miles of land that he and an uncle crop. Some seemed dry enough to till and plant, but when he flew their drone over their far reaches, the camera showed there were still wet spots. Drones can also sense crop conditions.
Corn hybridization alone, largely adopted by my birth in 1950, increased yields by a third. Per acre corn yields have quadrupled since then and Minnesota production has quintupled.
Artificial insemination was as important for dairying as hybrid seed was for corn. Insemination itself was adapted from research in humans and other species. But diluting and freezing the semen, so that one bull with superior genetics could sire tens of thousands of high-milking daughters took research, largely at land grants. Once perfected, farmer coops rapidly sprang up to bring the technology to farms.
A key institutional component of this is often ignored. To identify superior bulls, you need to measure production of their offspring. The Dairy Herd Improvement Associations set up by the federal-state-county extension service measured and tabulated production of thousands of individual cows. If this data had not been available to compare by sires, AI would have had little effect. And little of this would have happened if not for legislation in 1862, 1887 and 1914 that established the land grant schools, experiment stations and extension service.
Another sector with enormous productivity gains is sea transportation. Falling costs and increasing speed have done more to create current global patterns of production and consumption than much-faulted trade deals.
British travel writer Eric Newby’s classic “The Last Grain Race” describes the last gasp of sailing technology. In 1939, 18-year old Newby sailed with the steel-hull-and-masted windjammer Moshulu, out to Australia and then back laden with wheat. Now a restaurant in Philadelphia, this ship represented the high point of three millennia of sailing technology. A crew of 26 men brought 4,800 long tons of wheat from south Australia to Ireland, 13,700 nautical miles, in 93 days with no fossil fuel.
A World War II Liberty ship, already obsolescent steam technology when built, but cheap and easy, could carry 10,000 tons the same distance in 48 days with a crew of 45 or more, stopping to refuel at least once. A modern bulk carrier can carry 160,000 tons at about the same speed as the Liberty ship, but with the crew of the Moshulu.
The slow-speed marine diesel in the bulk carrier has 20,000 horsepower versus 2,500 for the reciprocating steam engine in the Liberty ship. That is eight times the horsepower but 16 times the cargo moved. And because the diesel is more than twice as efficient as the steam plant, the amount of oil to move a ton of wheat is a fifth of what it was as recently as the 1960s.
Put this all together, and one crew-member-day on the windjammer moved 27,000 ton-miles of wheat. On the Liberty ship, that was 65,000 ton miles and on the modern bulker, 1.7 million. That 65-fold increase in labor productivity is a major reason why Minnesota corn and soybeans can be sold competitively on all continents.
The cargo of the windjammer, moved at such peril and human effort around Cape Horn in winter, would fit in 54 of the grain hopper rail cars one sees all over or about half of one of the unit trains loaded daily at myriad elevators across Minnesota. It would fill less than four of the barges tied up in St Paul. One train nearly would fill the Liberty ship as would seven barges. The bulker would take 17 such trains. It would take 3,800 trains to carry off all the corn produced in our state in 2017.
Moving merchandise rather than grain, iron ore or oil has seen even greater efficiency increases. The biggest factor has been containerization. Traditional freighters like Liberty ships took as much time at each end loading and unloading as they did in crossing the Atlantic. Pilferage and damage were high and the costs of stevedore labor significant. Containers changed a job of days or weeks into one of hours or a day or two.
Early containers were only 20-feet long and so ships are rated in “twenty-foot-equivalent-units” or TEUs. The containers we see on trains and city streets are twice as large. Even 15 years ago, a 6,000-TEU container ship was large. Now 12,000 TEU ships are midsize, and about the same size as the 160,000 ton bulker for grain. The biggest ships that can ply between China and the U.S. West Coast exceed 21,000 TEUs. That is 10,500 semi-trucks or 50 of the double-stack trains rolling through town. Yet the crew typically is the same as for the windjammer Moshulu in 1939, about 26 people, even though it carries 50 times as much cargo. The container ship moves four times as fast and turns around in ports in a tenth of the time.
Shipping costs thus are a fraction of what they were 60 years ago. But that is a small factor compared to speed, mostly achieved in ports. Modern merchandising and just-in-time manufacturing would not be viable without the predictability of containers.
One could go on and on, in manufacturing, construction and services. Modern life may not be easy, but we can have more needs and wants satisfied with less labor and use of fuel and other resources than our parents or grandparents. That is nothing to sneeze at.