I thank participants in the Organizations and Innovation session at the EHA meeting and seminars at Berkeley, Stanford, and the University of Michigan, Ann Arbor for their comments. Special thanks to Paul David for correcting an error in an earlier version of the paper. Responsibility for the argument is, of course, my own.Google Scholar

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⁵ See, for example, Robinson, Joan, “The Classification of Inventions,” Review of Economics and Statisics (February 1938), p. 140.Google Scholar A closely related example was still used by Samuelson, Paul in 1976: Economics (10th edn. New York, 1976).Google Scholar

⁶ William Lazonick has explored, in effect, the potential of modern business enterprise to raise utilization rates among production workers. See Lazonick, William, “Work Effort, Pay and Productivity: Theoretical Implications of some Historical Research,” (unpublished manuscript, 1984).Google Scholar

⁷ Labor-using, in the sense that managerial labor, like production labor, is a cost that the owners must pay.Google Scholar

⁸ Chandler, The Visible Hand, p. 229.Google Scholar

⁹ Nordstrom is an upscale specialty retailer, with salespeople trained to match customers quickly with merchandise they will wish to acquire. Price Club is a discount operation that manages to turn over its entire inventory once every two weeks on average (an annual rate of stockturn of 26).

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¹¹ Nordhaus, William, Invention, Growth, and Welfare (Cambridge, Mass., 1969), p. 11.Google Scholar

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¹⁷ David, Paul and van de Klundert, T., “Biased Efficiency Growth and Capital Labor Substitution in the U.S., 1899–1960,” American Economic Review, 55 (06 1965), pp. 357–94.Google Scholar I concentrate discussion here on research which utilizes data for the entire U.S. economy, including the service sector. Cain, Louis and Paterson, Donald have studied disaggregated manufacturing data in the U.S.: “Factor Biases and Technical Change in Manufacturing, The American System, 1850–1919,” this JOURNAL, 41 (06 1981), pp. 341–60.Google ScholarJames, John and Skinner, Jonathan have reexamined a related set of issues in the context of the Habakkuk debate: “The Resolution of the Labor Scarcity Paradox,” this JOURNAL, 45 (09 1985), pp. 513–40.Google Scholar

¹⁸ David and de Klundert, van, “Biased Efficiency Growth,” p. 360; Abramovitz and David, “Reinterpreting,” p. 434.Google Scholar This seems to imply that the economy voluntarily adopted procedures which negatively augmented capital input. For reference to identification problems associated with their econometric procedures, see Nerlove, Marc, “Recent Empirical Studies of the CES and Related Production Functions,” in Brown, Murray, ed., The Theory and Empirical Analysis of Production (New York, 1967), pp. 92, 98.Google Scholar

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