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C00002 00002	TECHNOLOGY FOR IMPROVING PRODUCTIVITY
C00008 00003	OPPORTUNITIES TO INCREASE PRODUCTIVITY
C00015 00004	ADMINISTRATION
C00021 00005	PERSONAL SERVICES
C00022 00006	DOMESTIC
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TECHNOLOGY FOR IMPROVING PRODUCTIVITY


Why increase productivity?

	America is the richest  country in the world today,  but from
the  standpoint  of  100  years in  the  future,  it  is  a poor  and
underdeveloped country.  Here are  some of the ways in which  America
is underdeveloped:

	1. Many people work very long hours for low wages.

	2. Vacations are  much too short.  A person  ought to be able
to do  the work  required to  suppport himself  and his  family in  a
small fraction of his life and use the rest to do what he likes.

	3. Many of the ideas proposed in the rest of this book are
quite expensive.  This includes the development of automatic delivery
systems and automatically driven cars and flying machines.  If people
are to be able to afford them, they need more pay, and this means
more productivity.

	4. We  cannot afford  to rebuild  obsolete housing.   Perhaps
100  years from now it will be normal  for a family to buy a location
and scrap the house that happens to be located there  and build a new
one that suits its needs.

	What about unemployment and people not knowing what to do with
their leisure?

	Each  increase in productivity since  early in the nineteenth
century  has  given   rise  to   worries  of  permanently   increased
unemployment.   However,  there  seems to  be  an economic feedback
 mechanism  in
society  that adjusts  employment to a  level slightly  less than the
size of the  labor force.  This  mechanism works better than  it used
to, perhaps with increased  understanding of  how the  government  can affect
employment, but  it still  doesn't  work well  enough.  Nevertheless,
fluctuations in unemployment as a whole  are uncorrelated with
increases  in  productivity,  although  technology  often does  force
people in particular occupations to find other jobs.  Moreover, there
is probably a negative correlation between productivity and unemployment
across countries; i.e. it's the countries with low productivity that
have high unemployment.

	In my  opinion, a  number of  social changes  might ease  the
problem. In the first place, tinkering  with the money supply and the
interest  rate does not allow enough  control over employment without
other  adverse effects  such  as  inflation.   Here  are  some  other
mechanisms that might be used.

	a. Government  purchases and sales of  commodities other than
agricultural.   Hopefully, the  commodities chosen  would be  durable
and non-obsolescing.   It should be organized  in such a way  that no
industry would depend permanently on a government support program.  

	b.  Every job should have  a definite price  depending on the
industry, length  of  service, and  time  till  retirement.   When  a
worker  takes a  job,  he will  know  that his  employer  is free  to
eliminate  the job  at  the given  price. An  industry that  does not
expect to  change  will set  a high  price for  the  job and  workers
interested in security will concentrate there.


OPPORTUNITIES FOR INCREASE IN PRODUCTIVITY

	A hundred years  ago,  more than  half  the population  was
engaged in agriculture, and now the percentage is about five.  
This increase in productivity has permitted most of the population
to switch to other activities.
OPPORTUNITIES TO INCREASE PRODUCTIVITY


	In order to afford new inventions like those in this book, in
order  to have more  leisure, and in  order to bring  the standard of
living of the  whole country  up to  the level of  the present  upper
middle  class,  productivity  has  to   be  increased.    It  must  be
immediately faced that an increase in productivity is genuine only if
it allows the same thing to be done with less human labor.  This will
dismay someone who  believes that there is a fixed  amount of work to
be done and that an increase in production per worker will result  in
an  increase in  unemployment  rather than  an  increase in  leisure.
Fortunately  this fear can be  laid to rest by  the observations that
the large increases  in productivity that have  occurred so far  have
not led  to permanent  unemployment.  Economic  theory also  tells us
that  the  level of  unemployment  can  be controlled  by  fiscal and
monetary  policy.   Therefore,  we  shall  assume  that  increase  in
productivity  is   an  unalloyed  good,  but   after  discussing  the
opportunities for increasing  it, we shall  devote some attention  to
the temporary dislocations particular improvements  may cause and how
to mitigate their undesirable effects. 

	Some areas  of human activity experience regular increases in
productivity and others  do not.   Which  do and which  don't is  not
determined by a law of nature but depends on the state of technology,
on social  organization, and on whether there is a desire to increase
productivity. 

MANUFACTURING

	Manufacturing  is   the  classical   area  for   productivity
improvement.  Its productivity  has both a technological and a social
component.   The differences  among manufacturing  productivities  in
different countries stem from both causes.  Thus there are many cases
in which a country like the Soviet Union uses an identical technology
to the U.S. (for example when  the plant is purchased from the  U.S.)
but obtains a  much lower productivity from the technology.   A first
approximation to quantifying this phenomenon might be to say that the
productivity is the  product of a  technological productivity with  a
social efficiency and that the social efficiency is characteristic of
the country and  sometimes of the  industry within the  country.   We
will guess that  the social efficiency of  the U.S. and Japan  is .8,
Britain is .6, and the Soviet Union is .4.  In this section, we shall
be mainly concerned with the technological component of productivity. 

	In general,  the productivity  of manufacturing  in the  U.S.
follows  the possibilities  admitted by  technology rather  well, but
there are some remarks worth making:

	a.  The technology of manufacturing productivity (as distinct
from peripheral topics like quality control  and operations analysis)
is  not   developed  as  an   academic  discipline.     There  are  no
experimental production lines and almost no professors of  production
technology.  Most  likely, there is a  substantial missed opportunity
here.  (The situation has improved considerably since the above was
first written.  Several universities have recently started programs
of systematic research and teaching in productivity).

	b.  The area  of fastest productivity  improvement is  in the
manufacture of electronics.  Unfortunately, this is a  consequence of
a technological situation, the possibility of integrated circuits and
the  possibility of printed wiring that  cannot be transferred to the
manufacture of mechanical devices. 

	c. Much  of the  increase in  manufacturing productivity  has
been achieved by  economies of scale in making  very large numbers of
identical objects.  This has substantial costs in the quality of jobs
and in  rigidity of product  design.   Computers provide a  potential
means of getting the economy of mass production with individuality of
design.  Numerical control and computer control of machine tools is a
first step in this direction  and the automatic assembly machine will
be  another.   Because  of special  opportunities, the  manufacturer of
electronic  devices  can do  this  easier  than  the  manufacturer  of
mechanical devices. 

RETAIL TRADE

	1. The robot store

ADMINISTRATION

	1. Not doing it. 

	2. Making computers talk to each other
	
	3. Wiping out the brokers and other parasites. 

	Everyone complains about government inefficiency, but it is
important to realize that the social forces making for administrative
inefficiency exist everywhere.  They are prominent in the private
sector and where effective competition doesn't exist impose even
higher costs.  For example, at Stanford University where I teach,
the ratio of administrative expenses to direct academic expenses
has steadily increased and by the early 1970s Stanford was spending
1.6 dollars on administration for every dollar spent on direct
academic salaries.  A rather dramatic example is afforded by the
cost of mailing a letter.  As we know the cost of a stamp since the
end of World War II has gone from 3 cents to 22 cents.  In the early
1970s, Stanford increased the cost to its departments for affixing
postage from 10 percent to 15 percent of the cost of postage.  Thus
we see that the University has become inefficient 50 percent faster
than the U.S. Postal Service.

	The social forces increasing inefficiency are really beyond
the scope of this book.  Here are some of the phenomena without
estimates of their relative importance.  Parkinson
points to the tendency of an executive to download some of his
functions onto assistants as he grows older.  Opportunities to do
this are greater than in other parts of an organization, because
the executives are closer to the source of authority.  As an organization
gets older, each crisis or scandal causes an attempt to remove
decisions from the individual executive and embody them in regulations.
Each new regulation requires manpower for its enforcement and manpower
to evade its letter when this proves inconvenient to individuals or
even harmful to the goals of the organization.


IMPROVING ADMINISTRATIVE PRODUCTIVITY

	Many administrative and clerical workers act primarily
 as intermediaries between people who want to do something
and a system with regulations.

Here are some examples:

	The purchasing department in an organization processes purchase
requests and issues purchase orders to suppliers.  In doing so it makes
sure that the policies of the organization regarding purchases are
carried out.  Its work is almost always considered slow and error-prone
by its users.  However, the organization has a purchasing department
because the people who need what is to be purchased to do their jobs
don't know the purchasing policies and their changes.

	Much bureaucratic work is concerned with people getting
benefits to which they are entitled.  The bureaucrats know the rules
and are responsible for preparing and issuing documents that will
cause the exact benefits to be conferred.

	Stockbrokers know how to execute their clients' orders to buy
and sell stock.

	Besides those who facilitate transactions between an individual
and a system, there are those who facilitate transactions between
systems.

	A major way of improving administrative productivity is to
eliminate these intermediaries using computers.  If the purchase
rules are embodied in an interactive computer program, the person who needs
the purchase can generate the purchase order himself.  The person
entitled to social benefits can interact directly with the system
through his home terminal.  The investor can do his own trading.
Programs belonging to one business can deal directly with programs
belonging to other businesses.
PERSONAL SERVICES

	1. Law and medicine - better access to information. 

	2. automated design and diagnosis. 

	3. Teaching

DOMESTIC

	1. Delivery

	2. Cleaning and putting away. 

	3. Child care. 

	4. Food preparation. 

	5. Maintenance and repair.