Book Reviews

"Cybernation" is a coined word for what happens when machines take over both communication and control in automatic industries. George Terborgh does not deny that "cybernation" is here to stay. He does not deny that the com puter can take over many func tions of human beings and per form them at incredible speeds. But he insists that the alarmists, who see millions of jobs disappear ing as a Frankenstein monster moves into our shops and banks, are guilty of blurring the time factor in a most unrealistic way. Moreover, it is a mistake to as sume that more than a small per centage of industrial processes can ever be organized on a continuous flow or a mass basis.

1965 THE BOGEY OF AUTOMATION 57 Mr. Terborgh's breakdown of the nature of our economy is at the heart of his critique of the "automation hysteria." Some proc esses are admirably adapted to automation; the flow of liquids, the dispatch of paper work in offices and banks, the movement of cars along a Detroit production line, come immediately to mind. But Mr. Terborgh wonders how "cybernation" can really take over in agriculture. "The geographical dispersion of operations, and their seasonal character," he says, "pre vent alike the concentration and continuity of work required for computer control." The Limits of Automation Automation can do wonders to keep the railroads in business; the New York Central, for instance, can verify the whereabouts of any freight car at a moment's notice; and the loading and unloading of bulk commodities are now pretty much push-button affairs. But Mr. Terborgh notes that it will be a long time before trains, buses, ships, and aircraft move without direct human control. The con struction industry can make use of factory-assembled walls, floors, and ceilings, but men must still truck the stuff to the building site and help put the elements of a house together. As for the service industries, Mr. Terborgh says that "merchandizing, restaurants, re pair shops, recreation, entertain ment, education, health, personal services, and what have you" will continue to present "an intractable area for computer control because of dispersion and the small size of individual operations .... "

Even in manufacturing there are limits to the achievement of "fully integrated, self-regulating flow production." Most companies produce "such a multiplicity of prod ucts - types, sizes, models, etc. - that they cannot effectively use mass-production layouts and techniques." Mr. Terborgh quotes John Diebold, who, with Del Harder of the Ford Motor Com pany, was a co-inventor of the word "automation," to show that 80 per cent of American industry "produces in lots of twenty-five or fewer individual pieces." It is a slow business, says Mr. Terborgh, to apply "systems engineering ... with or without computers" to job shops that engage in what is es sentially batch production. Since manufacturing employs only a fourth of the total labor force, and since a great part of our manufac turing technology is "discontinu ous" in its very nature, the march of the Frankenstein monsters is bound to be far less precipitate than the Ad Hoc Committee on the Triple Revolution supposes.

Mr. Terborgh finds it difficult 58 THE FREEMAN December to separate the automation scare from the general fears about mechanization. Practically every generation has had its Luddite Nervous Nellies. Walter Hunt, the man who anticipated Elias Howe in inventing the sewing machine, allowed his daughter to persuade him that he would only be putting good seamstresses out of work if he were to patent his secret, so he dropped it and turned to other in ventions. But this did not keep automation from coming to the needle trades - and today the In ternational Ladies Garment Work ers Union and the Amalgamated Clothing Workers are powers in the land. Mechanization has al ways created more employment than it has destroyed, and, to the extent that it can be used, "cyber nation" will hardly change things. New Jobs Displace Old Undoubtedly the computer can be. spectacular in its "job destruc tion" within narrow confines. But history, so Mr. Terborgh notes, has always been a "boneyard" of lost jobs. The displacement of clerks from shops and banks is hardly different from the displace ment of canal boys, coachmen, elec tric railway motormen, gas lamp lighters, silk hosiery workers, pick-and-shovel coal miners, bug gy whip factory workers, and so on. The fact is that nobody knows what either product innovation or process innovation will do to affect job displacement and replacement in the future. But if history is any guide, the displaced clerk will be come a motel keeper, a librarian, or a first grade teacher before too much time has passed.

If our automated "progress" is indeed to blame for our 3 to 4 per cent unemployment rate, then how does one explain some of the sta tistical tables that are printed in Mr. Terborgh's book? The gain in "output per man hour" in the "total private economy" of the United States picks up in recovery phases of the business cycle, but over the years it averages about the same. If anything, we were do ing better in the first half of the postwar period than we have been doing recently. So mechanization, including cybernation, is taking no dramatic leaps. In Germany, the increase in output per worker in the 1952-62 period has been at 50 per cent as compared to 21 per cent for the United States. Yet Germany today has over-full em ployment, and the United States still has a marginal unemployment problem. If it were true that mechanization creates net unem ployment, wouldn't things be the other way around in the two coun tries?

Mr. Terborgh addresses himself to one final fear, that cybernation 1965 THE BOGEY OF AUTOMATION 59 and automation create a need for a higher order of worker intelli gence. The high school dropout, it is said, just can't keep up with what is demanded of a person in modern industries. But if it is easier to punch an adding machine than it is to add up a column of figures on paper, how can it be said that the former act takes more intelligence than the latter? It may be entirely true that the average dropout can't look for ward to getting a job with a big corporation. But this is one of those "self-fulfilling" prophecies. The dropout can't get a job for one reason: nobody will hire him. This doesn't mean that he neces sarily lacks the ability to work and learn on the job; it could merely mean that our large corporations are following stupid hiring prac tices. I would guess that the aver age job makes less of a demand on the brain than it did in my grand father's time. Yet many a man in my grandfather's day rose to be the head of a corporation without even so much as a high school diploma to back him.

If we would lower the minimum wage for boys and girls in the apprentice stage of life and let up on our insistence on high school and college diplomas as a job re quirement, we, too, might have a full-employment economy. And the "automation hysteria" would not need a George Terborgh to kill it. ~ Reprints Available of Recent Articles Let's First Mend Tommy's Trousers . . W. A. PATON 3¢ Is the U.N. Really Necessary? . . WILLIAM H. CHAMBERLIN lO¢ The Mobility of Labor . . . . . . • DEAN RUSSELL 2¢ "The Government Is All of Us". . . • LEONARD E. READ 2¢ Forty-Eight Thousand Dollars! . PAUL L. POIROT 2¢ The Individual and the State . .. WILLIAM H. PETERSON 2¢ Winner Take All . . . •. .. E. A. OPITZ lO¢ The State. . . . . . . .. . FREDERIC BASTIAT lO¢ No Special Privilege for Anyone. . . . LEONARD E. READ 2q~ The Gold Problem. . . . .. . LUDWIG VON MISES 3~· A Hole in the Dike . . . . . . • . DONALD L. REPP 2<"Every Employee Is Entitled to a Fair Wage" . . . . . . . . . . G. W. ANDERSON 2¢ Back to Gold? . . . . . . . HENRY HAZLITT 1O~!Can Wage and Price Controls Cure Inflation? . . . . . . . . . F. A. HARPER lO¢ For the Birds? . . . . . . . W. M. CURTISS 3<"Under Public Ownership, We, the People, Own It". . . . . . . . . LEONARD E. READ 2¢ THE FREEMAN, Volume 15, January-December1965 Prepared by VERNELIA A. CRAWFORD of the Foundation staff' NOTE: In page references, the number preceding the colon designates the month; the number following the colon refers to pages.