28. A Burst in Productivity

0:00A Burst in Productivity By some measures, the 1880s was the most productive decade in our history. In their A Monetary History of the United States, 1867-1960, Professors Friedman and Schwartz quote R.W. Goldsmith on the subject, The highest decadal rate of growth of real reproducible, tangible wealth per head from 1805 to 1950, for periods of about 10 years, was apparently reached in the 80s with approximately 3.8%. The statistics give proof to this outpouring of new wealth. The average gross national product per capita in 1958 prices rose from $531 for the decade of 1869 to 1878 to $774 for the decade of 1879 to 1888 to $795 for the decade of 1889 to 1898.

0:57This dollar growth was occurring, remember, in the face of general price declines. The average gross domestic product in 1929 prices rose from $11.6 billion per year for the decade of 1869 to 1878 to $21.2 billion per year for the decade of 1879 to 1888. Gross domestic product almost doubled from the decade before, a far larger percentage jump decade on decade than any time since. Labor productivity increased as manufacturing output per man hour rose from 14.7 in 1869 to 16.2 in 1879 to 20.5 in 1889.

1:42The 26.5% increase here ranks among the best in our history. Labor productivity reflects increased capital investment.