Milford chronicle., 1954-08-13
OUR MIRACLE OF PRODUCTIVITY

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sour Miracle of Productivity" is the title
of an information bulletin ISSUED by the
Chamber of Commerce of the United States.
It's purpose is to briefly describe what our
achievements in this field have been in half
a century or so, and why they were possible
The bulletin begins with statement of
belief, in which this is said Americas
steady increase in productivity, constantly
raising the standards of living is far more
able to improve the well-being of the nation
than any kind of redistribution of existing
wealth or income. Our productivity has in-
creased primarily because of incentives pOss-
.ible only in a free economy"
The bulletin defines productivity as "the
rate at which we convert work and raw ma
terlals into useful goods and services" and
emphasizes that it is not the same thing as
production. If a man turns out more goods
by working longer, he has increased his pro-
ductiOn obviously enough, but not his pro-
ductivity. The latter is increased only when
q larger output results from the same or
lesser amount of effort
Today man can account for about three
times as much output, with no more effort
than was possible in 1900. All manner of
forces, the bulletin points out, enter into
that galn-natural resources, science, inVen-
ton, competition, managerial talent So do
better machines and tools and processes. So
does more highly skilled labor. So does the
American genius for selling Still another
very potent force, it observes, ''is the profit
mOtiVe-a powerful ecOnOmiZer as well as
stlmulant. The profit motive gives every
body incentive to make resources 90 further.
That is its great social significance" Then.
a little later, it says Underlying all of these
forces OF productivity is human liberty. Lib
erty TO invent, to compete, to profit and to
grow. We say this combination of forces is
unique in America because of this last fac
tOr-human liberty"
The concrete results of American prOduc-
tivlty are found in shorter working weeks
combined with higher living standards. End
less examples Of progress could be cited. The
bulletin uses as an example a commodity
winch almost every family uSeS-the auto
mobile tire. In 1908 tire worker earned 40
cents an hour and the cost of a tire which
had life Of 1000 miles was S35. So an
hours labor would only pay for % miles
OF use Of one tire-a prOhibitive figure. In
1852, the tire worker earned 50 an hour the
tires cost had dropped to S20.35, and it's life
had increased to some 10000 miles. This
meant that an hours work would pay for
1850 miles Of use of a tire-a 128-fold gain.
How can we continue to increase pro-
ductivity? The bulletin answers that in this
fashion: by maintaining incentive - the
nope OF reward. The miracle of productivity
in this country has sprung from certain basic
institutions. These include privacy of prop
erty which allows a man to keep, sell, or give
away what he has produced whether it be a
bushel Of apples or a new idea; freedom of
markets from government control or from
monopoly so that private initiative can de-
teTm1ne how much of what is to be produced
where and when it shall be sold, and at what
price; and, finally, sanctity of contract"