“If freedom were not so economically efficient it certainly wouldn’t stand a chance.” — Milton Friedman
There is one great plot that has propelled the human race forward in its quest to live better and longer — efficiency. This is human efficiency, not the engineer’s efficiency that defines how many miles a car runs on a gallon of gas, or the BTUs per ton of coal. The efficiency that transformed human welfare is the increased comfort, health and creativity drawn from each hour of labor expended.
This increased efficiency manifests itself in numerous ways, but one of the most dramatic is production of America’s superabundance of food. Holland Thompson, in a book about inventions, said, “There is still, and always will be, a good deal of hard labor on the farm. But invention has reduced the labor and has made possible the carrying on of this vast industry by a relatively small number of hands.” That summary was in 1921, when 30 percent of Americans lived on the farm; today about 2 percent do.
Thanks to agricultural efficiency, the average American today spends less than 10 percent of his or her disposable income on food. And today’s farmer in an air-conditioned tractor cab is as far removed from the animal-drawn plow as today’s heart surgeon is from the blood-letting that was meant to save George Washington’s life.
Despite lamentations over the migration from the land to crowded cities, freedom from agricultural drudgery has produced more intellectual and material advancement than we can imagine. Dramatic improvements in travel, communications and medicine are some of the practical results.
Human efficiency is not restricted to any continent, race or climate; only ingenuity and ambition are required. It prospers most in those parts of the world where tradition and custom encourage industry and economic freedom. No better example exists than Benjamin Franklin, son of a soap maker, drifting due to circumstances and a restless spirit into the printing trade. With less than two years of formal education, his observations, ingenuity and government service contributed mightily to human efficiency.
Walmart, often maligned for its amalgamated approach to buying in quantity and selling cheap, is a lesson in efficiency. But it is not unique or new. Montgomery Ward and Sears-Roebuck devised a similar innovation over a century ago with their mail-order business. They were aided by the U.S. Postal Service, which could deliver much of their wares anywhere in the country. Small-town merchants and local manufacturers despised the large mail-order companies, and opposed the “Parcels Post” law that allowed mail carriers to deliver packages.
“These big catalog companies invade every hamlet and crossroads in the country with enticing, mendacious descriptions of goods quoted at low prices,” the Georgia president of the Retail Merchants Association wrote to the Atlanta Constitution in 1907. People of these hamlets and crossroads loved the availability of such a variety of goods and the convenience of purchase and delivery. This efficiency in business has been copied numerous times.
Changing efficiency is exemplified in the Internet phenomenon of instantaneous communication. The agency that 100 years ago facilitated mail-order companies is now being overtaken by the Internet, UPS and FedEx. In a March news release, the Postmaster General remarked, “The crisis we’re facing gives us an historic opportunity to make changes.” The Postal Service requires lots of changes.
Bills paid by mail decreased from 80 percent in 2001 to 56 percent in 2008. Electronic payment of bills jumped from 13 percent to 38 percent. Even as mail volume drops, retirement liability has doubled since 1996, from $7 billion to $14 billion. Its projected budget deficit grows to $238 billion by 2020.
Government can stall efficiency in the name of protecting workers, stabilizing commerce or a hundred other purposes, but efficiency eventually wins. Efficiency tolerates no government subsidies. The government subsidizes passengers on Amtrak a half-century after the people have chosen other modes of transportation. Amtrak, established by Congress in 1972 as a “for profit corporation,” has never made a profit and has received taxpayer subsidies every year, including $1.3 billion in 2008. By the end of the 20th century, trains accounted for only 1 percent of the nation’s commercial intercity passenger traffic.
Railways were a revolution in transportation, but like nearly all innovations in efficiency, they are eventually superseded by others that save humans more time, trouble and money. Trucks today can haul lettuce from California fields to supermarkets in New York cheaper than New York can grow it. Airplanes and ships haul grapes from Chile and citrus from Spain to compete with U.S. growers.
Endless agendas compete for our time and money. Many of them seek to solve social and governmental problems, local, national and worldwide. Whatever their cost and effectiveness, those that deserve attention will give humans more wealth, health and happiness for each hour of work invested. This efficiency is the lesson of the history of human progress. It has not gone out of style.
University of Georgia Professor Brown is an adjunct scholar with the Georgia Public Policy Foundation and author of “The Greening of Georgia: The Improvement of the Environment in the Twentieth Century.” The Foundation is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians.