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This article is reprinted from Issue 7 of HOPE Magazine (September 1996). The entire series of HOPE magazines can be downloaded freely from this web site. Click the Articles tab in the top menu.

Recently I had the opportunity to read a fascinating article entitled “Obsolete Men” which was originally published in the December 1932 issue of Fortune Magazine. The piece explored the possibility that millions of American workers might become permanently redundant in the new machine age that was developing rapidly as the twentieth century began. It cautioned that “Technological Unemployment” was not merely a temporary pause in employment opportunities but a profound structural change in the very nature of the modern economy.

The article contained a wealth of historical information on the economic and employment statistics of the time, but what struck me the most was just how similar the problems that were occurring then are to the ones that are taking place today. The only thing that has really changed over the last sixty or seventy years is the nature of the technological advancements themselves. Artificial Intelligence and robotics are now drastically reducing the need for human workers.

At the beginning of the twentieth century, it was geometrical increases in mechanical power sources that were driving innovation and new technology. Today it is geometrical increases in computer power sources (and globalization) that are fuelling innovation and new technology. But even after all these years, we still have not adequately addressed the single most important factor causing the multitude of social problems which are associated with our rapid technological advancements, namely the antiquated monetary system that we use to distribute the benefits of our increased productivity.

Here are a few quotes from this remarkable article:

“in the whole spectrum of industry from one end to the other, fewer men are required to do a given unit of work, more and more automatic machines are continually being developed and installed, and the basic relation of human labor to industrial production in America is apparently undergoing a change as profound as that which, in the early days of the Industrial Revolution, threatened the security and even the food and the shelter of British labor.” (page 25)

“the possibility that the present depression may be the effect of a revolutionary and far-reaching change in industrialism, rather than a cyclical dislocation of the credit machinery, has never seriously been entertained… If that increasing process of mechanization which is the characteristic feature of modern industry means an increasing displacement of human labor and the rapid industrial obsolescence of a great part of the country’s population, then it is worse than idle to discuss farmers’ loans and the reform of the Anti-Trust laws as a remedy.” (page 26)

“Any assumption of the economist that a displacement of workers by mechanization in one industry will result in the creation of jobs for them in another leaves out of the account the fact that there is also an industry of engineering -of machine making and energy application- which operates over the whole industrial field at once, and that the worker forced out of automobile making into a hotel kitchen may find the hotel kitchen mechanized before he can get there.” (page 92)

“That unemployment did exist in the U.S. even at the height of the boom is of course well known. The New York State Commissioner for Labor complained in 1928 that the unemployment situation was as bad as in the depression of 1921, even though there had been no corresponding slump in factory production. And the average of unemployment among non-agricultural workers in the U.S. between 1922 and 1927 was 2,000,000 men usually employed and then unemployed and seeking work.”

"It is, of course, probable that a part of these belonged to that marginal group of less efficient or less energetic men who, in a more primitive economy, are taken up in farm work and the like. But this group, for which there is no place in a highly industrialized society, constitutes nevertheless a burden upon such a society. For they must be fed or destroyed.” (page 92)

“In either case the choice for an industrial community remains the same: given a surplus of man-hours over available jobs, shall that surplus be allocated to a part of the working population as a burden or divided by the entire working population as a blessing?” (page 92)

“The word “overproduction” has obscured the entire situation. There is obviously no overproduction in a country in which several millions of able-bodied workers are without adequate food and clothing. There is merely a breakdown of the social machine. We talk of starvation in the midst of plenty as if it were a paradox. There is nothing paradoxical about it. If one man in 1925 is equal to three men in 1914 as a producer of goods but equal only to one man in 1914 as a consumer of goods, then the chances are that there will be a surplus of goods which cannot be sold and a surplus of men who cannot buy. The two together add up to the familiar platitude of starvation in the midst of plenty. And only an increase in production equal to the sum of the increase in productivity and the increase in population can possibly alter the situation under existing conditions” (page 92)

“the present system of distribution originated in a society in which the labor of a human being was the unit of productive energy and the need of a human being was the unit of consumption demands. The two existed at the same level and were, in a sense, equivalent. That is, human labor was the measure of human consumption. Unless a man worked he could not eat; there would be nothing for him to eat. But industrialism has profoundly altered that situation. A man is no longer the unit of productive energy. As a source of primary power he has been almost totally eliminated by steam and electricity. Goods to satisfy his needs no longer depend upon his labor: it is said that 4,000 men with modern power appliances could sow the entire American wheat crop. And the consequence is, in fact, that the human unit is no longer the common measure of production and of consumption. And that a system of distribution which treats it as if it were -which permits a man to consume goods only if he labors in their production when, as a matter of fact, there is no such labor for him to do- is an anachronism.” (page 94)

“The sum and substance of the problem is this: from the purely productive point of view, a part of the human race is already obsolete and a further part is obsolescent. But from the consuming point of view, no human is obsolete: on the contrary, an ever increasing human consumption is not only desirable but necessary. These are the hard and pointed horns of the dilemma of our time.” (page 94)

Here are a few of the statistics cited in the article:

“machinery developed in the single decade between 1914 and 1925 enabled one man employed in industry in 1925 to take the place of three men employed in industry in 1914”

“six or eight men can today control and operate a turbine capable of producing as much energy in twentyfour hours as 9,000,000 men working on eight-hour shifts”

“one man operating a modern brick-making machine sends 710 brick makers into other jobs or out to the breadline... one man operating a modern glass-tube-making machine deprives 600 skilled hand workmen of their places... one man operating a new electric-light-bulb machine replaces 10,000 human electric-light-bulb makers... one man in 1930 could make as many needles in a day as 17,000 men in 1830”

“in one decade (1920-30) one manufacturer (General Electric) created new machinery capable of producing four times as much man power (160,000,000) as the total wage-earning population of the U.S.”

“a women's hand can sew fifty to seventy-five stitches a minute, a sewing machine can sew 1,800... one man with textile machinery can equal the production of 45,000 men at the time of the American Revolution”