Monday, April 2, 2012

"On Efficiency c. 1912"

From Division of Labor:

The March 21, 1912 NYT:
One of the questions frequently asked of efficiency engineers, particularly by employes (sic) and those interested in industrial or social problems, is "What becomes of the men who are rendered superfluous by increased productive efficiency?" This question was raised during the meetings of the newly organized Efficiency Society on Monday.

Increased efficiency should not stop with production. It should include sales as well, and that means increased volume of sales. Increased productive efficiency means decreased costs of production, possibly decreased selling price, and still more volume of sales, for every salesman knows that the lower his selling price the more goods he can sell, particularly if he is competing with others. The usual cry of a salesman is, "I could sell more if I could offer a lower price."

The broad answer to the question, then, is that the employes "rendered superfluous" by increased productive efficiency are required by the increased volume of production to meet the increase in sales, due to greater selling efficiency and lower prices. Sometimes this increase in volume of business is felt before the productive force has been decreased correspondingly, resulting in an actual increase of the productive force, while the cost per unit of production is less.
Another of the blogs we read and don't link to often enough.