Organization, Automation, and Society: The Scientific Revolution in Industry

PUBLICATIONS OF THE

INSTITUTE OF BUSINESS

AND ECONOMIC RESEARCH

Recent publications in this series:

THE THEORY OF FISCAL ECONOMICS

by Earl R. Rolph (2d printing, 1956)

THE ROLE OF REGIONAL SECURITY EXCHANGES

by James E. Walter (1957)

ECONOMIC DEVELOPMENT OF COMMUNIST CHINA

by Choh-Ming Li (1959)

INTRODUCTION TO THE THEORY OF INTEREST

by Joseph W. Conard (1959)

ANTITRUST IN THE MOTION PICTURE INDUSTRY

by Michael Conant (1960)

ECONOMIC DOCTRINES OF KNUT WICKSELL

by Carl G. Uhr (1960)

A THEORY OF ACCOUNTING TO INVESTORS

by George J. Staubus (1961)

ORGANIZATION, AUTOMATION, AND SOCIETY

Publications of the Institute of Business and Economic Research University of California

ORGANIZATION, AUTOMATION, AND SOCIETY

The Scientific Revolution in Industry

By ROBERT A. BRADY

UNIVERSITY OF CALIFORNIA PRESS 1963

BERKELEY AND LOS ANGELES

University of California Press

Berkeley and Los Angeles, California

Cambridge University Press

London, England

© 1961 by The Regents of the University of California

Second Printing, 1963

Library of Congress Catalog Number: 61-7535

Manufactured in the United States of America

Institute of Business and Economic Research

University of California, Berkeley

Chairman, David A. Alhadeff

George F. Break

Howard S. Ellis

Joseph W. Garbarino

Robert A. Gordon

Ewald T. Grether

William J. Vatter

Richard H. Holton, Director

The opinions expressed in this study are those of the author. The functions of the Institute of Business and Economic Research are confined to facilitating the prosecution of independent scholarly research by members of the faculty.

Preface

A host of new problems in organization is raised by the swift permeation of science throughout contemporary industrial societies, and conjointly by the cumulative momentum of industrialization throughout the shrunken space-time dimensions of the globe. Among these problems, one of critical importance for economic policy is the extent to which long-term and wide-range planning is required by both the structural layout and the operational conditions of the emerging technologies. To deal with this problem we shall require the development of an organization or systems theory which can cope adequately with the ever more complex issues of decision making in this transformed environment.

Policy and theory are here so closely interwoven that no one may tell where the one begins and the other ends. For both, the issue of centralization versus decentralization is being thrown directly to the forefront, and its importance is highlighted by the fact that two great contrasting ideological systems appear to divide the world. One champions (in theory at least) the highly decentralized American free enterprise system. The other promotes the highly centralized, omnipresent, and omnicompetent planning mechanism associated with the U.S.S.R. (where, however, there is a trend toward decentralization).

On the fringes of the titanic struggle over both policy and theory are the underdeveloped countries. Virtually without exception these countries are now launched on long-range plans for accelerated economic development and social change. To implement vitally important parts of their plans, these same countries are borrowing, ad libitum, from many different sources, and what they imitate they are adapting to their own resources and to their cultural and national habit-patterns.

In all the borrowing, adapting, and welter of interchange, two indispensable components, those of science and industrial technology, seem increasingly—and in some respects to everybody’s surprise—to rise above and beyond the sea of differences. As far as our evidence goes, to take the extreme case, it now seems clear that Soviet science in most fields is essentially like our own. In nearly all fields it is at grips with essentially the same fundamental problems; employs the same methodologies and techniques; combines postulation, deductive reasoning, and empirical verification in substantially the same ways; draws upon our research, our publications, and our discoveries and speculations as we in turn are learning to draw upon theirs. In each forward step, as scientists from different disciplines now testify, each body of workers evolves essentially the same types of naturalscience laws, and comes up with identical or complementary inferences, proofs, and discoveries.

That this is so should surprise nobody. Such has been the history of both science and industrial technology over the past two hundred years. The interchange, however, is never merely twoway; it is generally an interchange in all directions at once: from the United States to or from the Soviet Union perhaps; but also from either or both of these to or from Britain, France, Germany, Japan, India, and so forth. It goes on wherever men work in laboratories or libraries, in research or design divisions, in mathematics departments, or in construction engineering.

As far as our evidence goes, here is the true universalism of modern times; here are the real, living, world-wide common beliefs, hopes, dedications, disciplines, values; here is arising the lingua franca which all peoples and tongues may understand; here also is the common pool from which any may draw the knowledge and devise the technologies upon which the material fates and fortunes of all mankind, in some general and uncertain way, seem to center.

The growing interdependence of science and technology necessarily results in the permeation of industrial processes with like points of view, like disciplines, like reference to objectively valid criteria, and like modes of making judgments. The evidence of such permeation crowds in from all sides. It shows up in the construction and layout of industrial plants and in the weaving of power, transport, and communications networks; in the operation and control of processes; in the analysis of problems raised by innovations; in the training, preparation, and approaches of management. To an increasing extent it is showing up in administration, and even in the shaping of various lines of policy decisions.

In science, universality is based on evidence of law, order, regularity—patterns of interdependence in nature. In technology, it is based on scientifically verifiable best methods of turning knowledge of these laws to human account. In management, and in at least the lower echelons of administration, it tends to become less clear, for here both are compelled, willy-nilly, to bridge the gap between technology and the highly volatile, almost endlessly complex human factor and the even more volatile and complex social factor.

The trouble with both of these factors is that we still know so little about either, and that little which is, so to speak, scientifically cleared up, still leaves us almost wholly in the dark concerning the relationship between the two. How much is man a mere biological specimen? How much a creature of culture? Who knows? Who can be sure?

The state of our laws—if, indeed, there be any—of personality and cultural change are more wrapped in mystery than is the secret of life itself. But of one thing we can be sure; and that is the kaleidoscopic swiftness with which environmental changes are taking place in contemporary times—not in the United States alone, but everywhere. The influences that from the time of Francis Bacon to the French Illuminati, made European intellectuals furiously to think have become the commoner’s heritage today. Along with this have come more questionable yet also quite universal habits of furiously to act and furiously to change—to change attitudes, beliefs, hopes, wants, desires, institutions, social relations.

Part of this extraordinary and almost global cultural dynamism is traceable directly to the equally extraordinary dynamism of science and technology. Part of the dynamism of the latter is equally traceable to powerful stimuli coming from the former. They interact and react upon each other in an infinity of ways.

But also, paralleling this dynamism, it is everywhere evident that the need for more comprehensive and scientifically minded organization has arisen, prompted by the very nature of the phenomenal advances made by science and technology. How to preserve the cultural dynamism—or, at least, to recover what it may have to offer of value to human life, while effecting the necessary minimum degree of effective organization of scientific and technological resources—is probably the most difficult problem of history. It is rendered even more difficult by the built-in necessity of preserving the greatest possible capacity for change in science and technology themselves.

This need for flexibility in science and technology arises only in part from the nature of the driving forces which lend vitality to each. It is also, as may be shown, an indispensable condition to long-continued human life and culture on this planet.

The larger and more general problem was posed long ago by political theorists and historians. It is that of how to reconcile order and freedom; how to have the best and not the worst of both worlds. The growth of the new industrial technology has merely generalized the problem so as to encompass virtually all phases of life. It affects all aspects of contemporary civilized existence: politics and the state; education and the supply of public information; relations between rural and urban areas, and the organization of life in each; the comity of nations and the maintenance of peace. At all levels, the problem is how to combine coordination with individual initiative, organization with autonomy, effective interlacing of interdependent activities with flexibility and the need for change—irrespective of the source, whether from science, technological innovation, or cultural values.

This study is concentrated on industrial technology, with special attention to that level of development wherein the cleaning- up operations necessary to bring practice fully in line with scientific theory are already well along. It is essentially a sort of ground-clearing study. It stops short of any attempt to draw many conclusions. It seeks merely to answer one type of question, namely, what, in the light of certain well-accepted criteria, is the best way to organize the productive resources of an economy when decision makers are prepared to make full use of the potentialities opened up by advances in science and engineering.

It consists, so to speak, of a series of stills depicting the implications of what may, without exaggeration, be referred to as the scientific revolution in industry. No attempt to cope with the problems of organization now, or for a long time in the future, will get very far unless it begins by taking these stills— either in their present form, or as they may be altered by further innovations in science and technology—as given and irreducible components.

But so to accept them carries some rather far-reaching implications for the manner in which most problems of organization in both economic and noneconomic affairs are formulated. It is my belief, as indicated in both the first and last chapters of this study, that what is involved for the social sciences is no less revolutionary in scope and method than those developments in quantum theory, relativity, and the like which led to the revolution in physical theory of the 1930’s, and which were brought to the notice of a startled world by the explosion of the first atomic bomb.

As far as academic halls are concerned, the conventional divisions of subjects into political science, economics, sociology, business administration, and history—not to mention psychology, anthropology, and possibly even much of philosophy—may now well be as obsolete as the medieval division into the trivium and quadrivium after the Renaissance, and as cumbersome in coping with the problems which now crowd upon scholars for solution.

My debts for assistance in this study are too numerous, many of them of too long standing, and at many points too difficult to identify clearly, for full and adequate acknowledgments.

I am, however, under especially heavy obligations to several institutions and persons whose assistance it would be ungrateful not to acknowledge in full. First of these is the late President Keppel of the Carnegie Corporation, who made available from that organization funds to finance two years of field investigations in Europe studying industrial organization. Subsequent byproduct studies were made of emerging power configmations (Business as a System of Power, Columbia University Press, 1.943), and of the program of the first postwar Labom government in Britain (Crisis in Britain, University of California Press, 1950). Those studies were primarily concerned with the problems of bmeaucracy and power, and their implications for organization and decision making. Complete listing of further aid by assistants, colleagues, students, and critics within business and governmental circles would run into hundreds of names. For reading and criticisms of the entire manuscript at one stage or another I am especially grateful to Mr. Morris L. Cooke, of the Public Affairs Institute, Washington, D.C.; the late Professor Dickson Reck, School of Business, University of California, Berkeley; Professor Hugh Hansen, Department of Economics, University of Iowa; Professor Warren Gramm, Department of Economics, University of California at Davis; Mr. L. L. Howell, of the Harry Cooper Stores, Pasadena; and several dozen students at the University of California.

Especially valuable have been many of the additional—and at one point or another—detailed criticisms and suggestions by chapters. Amongst those to whom grateful acknowledgments should be made are:

For chapter i: Professor S. V. Ciriacy-Wantrup, of the Giannini Foundation, University of California; Mr. Leslie C. Edie, Port of New York Authority; Professor Corwin Edwards, School of Business Administration, University of Chicago; Professor Andreas Papandreou, Department of Economics, University of California; and Professor Paul Baran, Department of Economics, Stanford University.

For chapter ii: Professor Ciriacy-Wantrup; Professor Erich Zimmermann, University of Texas; and Professor Baran.

For chapter Ui: Professor Robert Brode, Department of Physics, University of California; Professor Tom S. Kuhn, Department of Philosophy, University of California; Mr. Lauriston Marshall, Director of Research, Link-Belt Company, Indianapolis; and Mr.

C. E. Sunderlin, Deputy Director, National Science Foundation, Washington, D.C.

For chapter iv: Admiral George F. Hussey, Jr. (retired), Secretary of the American Standards Association, New York; Mr. Willis McLeod, Chief, Standards Division, G.S.A., Washington, D.C.; Mr. Richard Bergmann, Vice-President and Chief Engineer, LinkBelt Company; Mr. Tom Davis, Link-Belt Company; and Mr. Marshall.

For chapter v: Professors Ravitz, Schaffer, and Somerton, all of the Department of Mineral Technology, University of California.

For chapter vi: Professors Varden Fuller and James J. Parsons, respectively of the Giannini Foundation and the Department of Geography, University of California; and Mr. Robert Enochian, of the Department of Agriculture, Washington, D.C.

For chapter vii: Mr. Marshall; Mr. Charles O’Connor, President of Reichhold Chemicals, Inc.; and Dr. Charles Thomas, Professor of Physics, University of Michigan.

For chapter viii: Professor Cyril Atkinson, Engineering Design, University of California; Mr. Marshall; and Professor Baran.

For chapter ix: Professor Harmer E. Davis, Mr. Richard Carli, and Mr. Richard M. Zettel, of the Institute of Transport Engineering, University of California; Mr. Arthur Grey, Department of Economics, University of Southern California; Mr. Edie; and Mr. R. S. Henry, Vice-President, Association of American Railroads.

For chapter x: Mr. Marshall, Professor Hansen, and Professor Gramm.

For chapter xi: Professor Theodore Hawkins, Department of Political Economy, Johns Hopkins University; and Professor David Revzan, School of Business, University of California.

For chapter xii: Mr. Edie; Professor Dallas Smythe, of the Institute of Communications, University of Illinois; Mr. M. H. Cook, of the Bell Telephone Company; and Mr. Robert Walsh, of the International Telephone and Telegraph Company.

For chapter xiii: Professor Papandreou, Mr. Edie, Professor Baran, and a dozen or so others.

For financial assistance I am further indebted to the Bureau of Business and Economic Research of the University of California, which supported the British study, and which has given continuous and generous support for research and clerical assistance since that time.

For research assistance I have an especially deep obligation to Professor Norman Bursler, now of the Law School, University of Chicago; to Dr. William Taylor, now of the International Monetary Fund, Washington, D.C.; to Professor John Dalton, now of the Department of Economics, University of Maryland; and to Mrs. Caroline Webber and Miss Ruth Rappaport, both of Berkeley, California.

Throughout all phases of this study my wife, Mildred Edie, has given invaluable advice and criticism—particularly pointed in chapter xi. Needless to add, errors of omission and commission must of necessity be mine alone.

Which latter comment, however, may deserve another few Unes. At all points the material has been sifted for the homeliest and most familiar illustrations possible. Every bit of superfluous data or process of reasoning has been cut away. The first effort throughout has been to achieve the maximum of communication in general clarification of what quickly becomes, even to the expert, almost infinitely complex.

Robert A. Brady

Robert A. Brady

Berkeley, California

Contents

Contents

I. Introduction: Characteristics of the Scientific Revolution in Industry

II The Handicap Race with Nature

III Science as the Key to Resource Innovation

IV The Delicate Moving Balance between Order and Innovation

V The Principles of Unitization in Mining

VI Determinants and Prospects of Industrialized Agriculture

VII The Chemical Revolution in the Materials Foundation of Industry

VIII The Permeation of Automation Processing

IX The Problem of Inter-Media Traffic Unification

X Evolution of the Universal

XI The Possible Impact on Goods Distribution

XII Integration of Telecommunications

XIII Recapitulation and the First Sum of Consequences

NOTES

INDEX

I.

Introduction: Characteristics of the Scientific Revolution in Industry

A REVOLUTION IN FOUR PARTS

Clearly the facts of the much-publicized scientific revolution in industry are of overwhelming interest in the commanding heights of polity throughout the world. Wherever we look, it is seen now to contain one of the indispensable keys to success in defense and war, to the realization of hopes of mass prosperity, and hence to the spread of democratic cultures. This is true whether we have in mind the multifarious, piecemeal, and day-by-day adaptations of older industrial countries such as the United States and Britain, or any of the vast areas just beginning efforts at accelerated economic development throughout the length and breadth of the world.

The new patterns of industrialization, like the spread of Christianity under the Caesars or of democracy after the Illuminati, are everywhere the order of the day. On all sides they are in the ascendant; with objections in the minor key duly allowed for, the new scientific-minded industrial technology is everywhere both generally sought after and, once begun, irreversible. On its account most developed and underdeveloped countries alike seem prepared to modify, alter, or, in extremis, sacrifice whatever stands in the way in the forms of law and custom, politics and religion, economics and standards of living.

By it most of life is bound to be altered in detail, when not wholly transformed. While the older industrial countries are constantly altering the life styles of their own peoples and institutions in keeping with the lines of force traced out by this continuing revolution, the newer are faced with the possibilities and the hazards of adaptation en masse at the latest levels of invention, technique, science, and know-how. In either environment, the new developments confront, or will soon confront, society with the ultimate problem: the rational organization of production on the most comprehensive and technically efficient basis possible.

That this ultimate problem should confront us now, with the stamp of urgent business on it, is due to two closely related sets of reasons. The first has to do with the new and sobering view of natural resources. Here the old cornucopian view is gone. The unlimited fullness of the earth is no longer with us. On every side modern industrial technology, like the older, starvation-level agricultural societies, is now faced with the ironclad necessity of becoming resource-conscious. Even the most lavishly endowed nations of the earth are being forced, as the monumental reports of the Paley Commission for the United States have made abundantly clear,¹ to consider prospects of numerous, and in some cases critical, materials shortages. The United States itself is swiftly becoming a major have-not nation. Most of the older industrial countries reached this stage a long while ago.²

The second set of reasons for the urgency of the problem of rational organization in production is found in the very nature of the scientific revolution in industry itself. Up to a certain point, the issues have little to do with ideologies or social programs. The inner logic of the newer technology sets certain broad limits on how it may be most efficiently managed and directed. Through its application, processes are being linked to processes, plants to plants, firms to firms, and even industries to industries in such a way, and under such ordering disciplines of integration and synchronization, that the relating plans and management procedures must keep in step on pain of crippling breakdowns, any one of which may threaten to ramify endlessly throughout the system.

The integrating plans must everywhere take cognizance of the strict limits imposed by the structure of limited natural resources, and at the same time manage so to guide and rationalize production processes that output may yet be expanded indefinitely. The two interact continually. The more severely limited the natural resources, the greater is the emphasis upon more rational, economical, and efficient industrial organization. At the same time, the more complete the resort to the newer industrial technologies, with their protean productive power and consequent mounting draft on resources, the greater is the concern over conservation.

Over half a century ago, Thorstein Veblen referred to this concatenation of processes by way of which the modern industrial system at large bears the character of a comprehensive, balanced mechanical process.³ Viewing the problem of the intricate technology of the future, when based on massive use of low-grade natural resources—long after high-grade deposits will have been exhausted everywhere—the California Institute of Technology finds that because of the huge increases required in energy resources simply to keep the whole process going, there might, following any major catastrophe, actually be a point of no return. ⁴ Once, that is to say, major breakdown occurred, the combination of intricate integration of the industrial system at large with the necessarily gigantic minimum requirement of energy to keep the system going might foredoom the possibility of any regeneration of the system at all.

Without regard to any such possible future denouement of so dramatic a character, the facts behind the speculation may be seen to render an understanding of the scientific revolution in industry one of the most important and pressing needs of contemporary times. It will quickly be apparent that the new order differs radically from that celebrated by the elder Arnold Toynbee in his famous pioneering study of the eighteenth- and nineteenth-century industrial revolution.®

To be sure, the new grew out of and is finked with the old. The line of inheritance is direct. Yet even a quick glance at its specific differentia will show how this revolution within a revolution has qualities and characteristics that set it off as something distinct and different in its own right.

It has four general aspects. Each is closely related to the others and is, in fact, heavily dependent upon them. First is the chemical revolution in the materials foundation of industry. Second is the standards and specifications revolution in the criteria for selecting the best methods, processes, products, and the like. Third is the electronics and automation revolution in the processing methods of industry. And fourth is the revolution (at the moment, primarily atomic) in the systems of energy supply.

The revolutionary impact of each of these lines of development is not confined to any single line of industry. Each in a different way affects, or promises eventually to affect, nearly every level of production from raw-materials extraction to final use by the ultimate consumer. They then promote, singly and in concert, reconstruction of transportation and communications networks, and they lay heavy emphasis upon fundamental reorganization of goods distribution.

As a further consequence, they encourage reexamination of a wide range of basic postulates in related fields of science. How far, may be appreciated by a brief summary of the leading aspects of the scientific revolution as indicated above.

THE CHEMICAL REVOLUTION

The physical-chemical revolution is slowly enveloping the rawmaterials base of the industrial system as a whole. It is of comparatively recent origin. Aside from metallurgy (technically a chemical process), chemical processing on an industrial basis is about loo years old. But permeation of chemical processing throughout the industrial system is far more recent still. For Germany, the great pioneer in this field, it dates back mostly to the turn of the century. For the United States it dates back to the First World War. It is built squarely on detailed, fundamental laboratory research.

The spread of physical-chemical analysis (or transmutation) of a widening range of complex raw materials has opened the way to extensive and flexible substitution of materials in field after field. One of the largest chemical companies in the United States estimates that more than half of its range of products and volume of output is in products which were unknown before World War II. Another estimates that more than half of its output in 1965 will be in products which are unknown in laboratories today. In field after field, this rapidly spreading chemical revolution adds to materials substitution the broad use of wastes and otherwise underutilized by-products. For some substances, such as petroleum, natural gas, coal, and, more recently, wood products, virtually all physical-chemical components can now be used.

At the same time, the similarly flexible synthesis of such components makes possible the production of a bewildering variety of both new and substitute end-products.

From beginning to end of both analysis and synthesis, this chemical revolution of the industrial raw-materials base rests upon, and is further accelerated by, the revolution in standards and specifications.

THE STANDARDS AND SPECIFICATIONS REVOLUTION

It may readily be seen that chemicalization, as it is sometimes called, of raw materials depends upon the evolution of comprehensive and exacting systems of nomenclature, formulas, process and equipment controls, and precise standards for guiding each and every step in production in keeping with the scientific facts regarding inherent physical-chemical properties in processes of analysis and synthesis. With and upon these are then built further systems of precise specifications on the use or function of each segregated or recombined set of such physical-chemical components. Each step in chemical processing taken in this direction has thus reenforced a separately originating, but also swiftly spreading, system of specifications and standards which is similarly based upon the achieving of comprehensive sets of objectively determined requirements for the adequate performance in use of each and every material, machine, component, process, and finished goods. This might properly be termed the specifications revolution.

Though difficult at first for the layman to understand,® the long- run implications of such standards and specifications are quite revolutionary. A specification, MacNiece has written, is the definite, particularized, and complete statement of qualities, characteristics, and requirements of materials, processes, and procedures, and it rests throughout on the preexistence of careful, systematically worked-through, and scientifically valid systems of standards.⁷ The results of a systematic carrying-through of these specifications techniques upon all phases of materials supply, production processes, and methods of distribution (e.g., elimination of meaningless product differentiation) of both producers’ and consumers’ goods are extraordinary, and in the main are as little understood in theory as they are revolutionary in practice.

THE ELECTRONICS AND AUTOMATION REVOLUTION

Such systems of specifications and standards, when fully carried through, make possible rigorous control over all phases of quantity and quality variation. The way is thereby cleared for completely mechanical or other types of continuous-flow coupling of all, or at least the bulk of, previously discrete steps in processing. With this interlinkage is then combined both temporal and volumetric adjustment from machine to machine (and from equipment to equipment) of loads and capacities. The whole is further supplemented by adequate devices to secure quality control at each separate step in processing. The way is then prepared for application of electronically operated, automatic, self-correcting (feedback) control devices. When this is done, the plant becomes fully automatic. Automation, as this end product of converging efforts at technical plant-rationalization is currently termed, has already come to dominate many branches of the heavy chemicals industries, and is rapidly spreading throughout various lines of manufacture.

The Council for Technological Advancement suggests that full automation comes in three major steps: (i) automatic handling of materials, as illustrated by packing plants in the disassembly of hogs, or the assembly line as introduced by Henry Ford in automobile production; (2) the integration of production or processing equipment, already rendered automatic, with automatic handling, wherein the separate processing, if guided by built-in devices such as cams, templates or limit stops to follow a pattern, may be controlled by a mechanism having a physical analogy to the machinery or processes controlled—i.e., the analog type of automation; and, finally, (3) the addition of automatic computers which read the production record and use this information to correct the process automatically. This last is the feedback which results in full automation. Information, as in the simple device of the home thermostat for controlling room temperature, is supplied which automatically influences the end result. ⁸

How far can automation go? Today we are entering the era of automation—where machines and other equipment, under push button control, will turn out almost any kind of product with wizard-like precision in huge quantities and at low cost … not only glassware, light bulbs, automobile engines, and radio and television tube assemblies, but also canned foods, beverages, and pharmaceuticals are being … processed automatically.⁹

In this type of production, the entire factory becomes, in effect, a machine with integrated parts. So far-reaching are some of the technical, economic, and managerial impheations of a systematic reworking-through of the principles of automation—derivable ultimately from the much-heralded new developments in information theory, and viewed by some as the most significant scientific development since Max Planck introduced the Quantum Theory¹⁰ —that Norbert Wiener and others think that taken by itself it may properly be termed the Second Industrial Revolution. ¹¹

Under the regime forecast by this revolution, a factory becomes capable of continuous operation 24 hours a day and 365 days a year—at least theoretically and with due allowance being made for breakdown, repair, and maintenance. Only one technical limitation then stands in the way of universalization of automation throughout the leading industrial processes of the globe. That is, energy supply. Energy is probably the most important single limiting factor to the utilization of resources. What constitutes an available mineral resource a California Institute of Technology report found, is essentially a question of energy.¹² Generally speaking, if given ample and readily available energy supplies at any and all desirable locations, it will be found that (see chap, ii) most problems of resource supply are, in effect at least, solved.

THE ENERGY REVOLUTION

The problem of energy supply has been solved with a further revolution, that of atomic energy.¹³ It affords the following advantages.

With respect to supply, Palmer C. Putnam, a consulting engineer for the Atomic Energy Commission, has estimated that the known world reserves of fossil fuels would last, at the calculated consumption level of the year 2000, some 80 years, whereas the amount of uranium and thorium already in sight would provide energy at the same rate for 1,700 years.¹⁴ There are excellent reasons for believing that new finds will soon outdistance those already known. Success in the breeder process multiplies the use of any given supply of fissionable material. The addition of light metals, as suggested at the Geneva Conference,¹⁵ is theoretically possible. But the possibility of using the fusion process (as in the hydrogen bomb) and heavy water (deuterium) opens the prospect of limitless energy resources for the future.

With respect to cost, by current methods cost is almost wholly in the engineering facilities required to turn atomic into electric energy, and this is believed to be already within striking distance of all but the most economical hydroelectric power. (See, however, chaps, ii and x below.)

Finally, with respect to location, since one pound of uranium is about the fuel equivalent of 1,300-1,500 tons of standard bituminous coal, the cost of transport to the energy generating site is negligible. The startling result is that no region of the world, however well or poorly endowed with the older sources of power and energy, need any longer be limited in its economic development by shortages of this sort.

IMPACT UPON TRANSPORTATION AND COMMUNICATION

Ample, flexible, and universally available power within rawmaterials plants and processing plants makes possible the permeation of automation throughout the central industrial phases and aspects of production. Consequently, the whole concert of such processes may now be organized on a mass-output basis. Furthermore, just as internal reorganization replaces previously discrete processing steps or batch operations with continuous self-correcting flows, so the external conditions to the efficient and unbroken operation of the automated plant call for continuous, evenly spaced flows of materials to its doors and of finished products away from the ends of its production lines. Heavy emphasis is then placed upon two complementary developments external to the plant, the over-all effect of which is to generalize the operating conditions and, so to speak, the life style of the new industrial technology throughout the industrial system.

These complementary developments are of the utmost importance for an understanding of the problem dealt with in this study. They may only be briefly stated here. The first is actual, direct interplant synchronization. This originates from the effort to achieve an appropriately exacting timing and volumetric adjustment of capacities and output of all plants thus brought together in synchronized chains of successive steps from the raw materials to the finished products. The second complementary development is based partly on the first, but it is also partly of independent origin. A series of related changes has culminated in the reduction of interplant transport facilities to the close equivalent of intraplant flows.

That is to say, transport and communication media come to operate as synchronized automatic or semiautomatic networks. Advance along either line tends further to encourage, and in part rests upon, advance along the other. Some of the effects already achieved are quite remarkable.

In a few cases direct physical interplant synchronization, perhaps best illustrated by some of the new gas and petroleum refining plants in Texas, is so nearly complete that the principles of automation may be said to govern at once both the bulk of interplant materials flows and the over-all functioning of the complex of the several related plants involved. In subsequent chapters (e.g., chaps, vii and viii), examples will be given which will show how far the movement has already gone.

The second complementary development is more familiar, but possibly of even greater importance. Two broad levels may be distinguished. First are certain cases where transport media are already completely closed in the sense of being automatically operated and automatically controlled systems virtually in their entireties. And second are cases where operating changes, while making possible some approximation to those typical of closed systems, are still (and may, indeed, always remain) some distance removed from the first level.

On the first level are grid power systems, pipeline networks, and (least important at present) continuous-belt interplant connections. All three systems transport materials or energy supplies which alternatively would have to be carried by rail, water, or highway media. In these cases all or at least the bulk of interplant production processes, from the raw-materials stage on, are synchronized in comprehensive, instantaneously adjustable, automatically controlled, and completely interdependent networks. Control of these transport networks is effected by use of private, or public, specialized communications facilities which are precisely analogous to those which interconnect and maintain continuous running adjustment within plants fully oriented to automation.

On the second level are the rail, highway, waterway, and airway transport systems where internal pressures for technical rationalization—especially when combined with the increasing reorganization of the multitudes of plants and business operations duly serviced by these transport media on the basis of continuous, evenly flowing production processes—serve to promote the closest possible approximation to the operational conditions holding for transport systems on the first level. In effect, this means that, by freight cars, trucks, etc., materials flow over these media to and from plants in such a way and on such schedules that, at both the beginning and the end of freight movements, storage and warehousing are minimal or, ideally, nonexistent. Every move made in this direction through scheduling and routing of freight carriers, and in the required management of the details of movement over tracks, highways, etc., promotes further approximation to the conditions of internal plant transport where the handling of materials has been put, or may be put, on a completely automatic basis.

On this second level the necessary supply of intelligence at decision-making and coordinative points of linkage is handled through resort to a communications system which may be either wholly or partly private, or wholly public. In any case, however, the principle holding for the communications system is that ideally it shall be as comprehensive in geographic coverage as the transport media and the location of all the users thereof, and that it shall be capable of automatic, instantaneously self-correcting adjustment to varying loads at all times and at all points throughout the system. This principle holds not only for each separate strand of communication—telephone, telegraph, cable, wireless facilities—but also, as will be shown, for the system as a whole.

Two things have been happening. First, transportation and communication networks are in process of being unified and streamlined to the point where they are subject to nearly complete automation. Second, these networks, as they link plants similarly automated, become, in effect, components of much larger technically unified systems.

When these two complementary technical developments are taken together with the four aspects mentioned above—chemicalization of the raw-materials base, permeation of systems of standards and specifications, plant automation, and atomic energy —we see the principal characteristics of the dawning scientific revolution in industry. Consideration of its conditions for effective operation, and of its current lines of growth, indicates the emergence of an industrial order which may well differ as radically from the regime'of the dark Satanic Mills, of which Carlyle spoke with such violent condemnation, as did the latter from the era of medieval handicraft. The implications for the related bodies of theory are apt to be far reaching and fundamental.

THE GROWING NEED FOR RETHINKING THROUGH

In discussing that specialized portion of the scientific revolution in industry called automation, Diebold has made the point that, in every instance, carrying it into practice encourages, when indeed it does not demand, the rethinking through of each relevant process from beginning to end.¹⁶ This holds, as the automation reports testify, at once for the nature of the materials entering the plant, for all the machinery linked in successive steps in processing and manufacture, for the types of jobs and the training of the staff, for management control, for the types and uses of end products or services, and for most, if not all, of the routine office accounting and record keeping.¹⁷

Diebold cites steelmaking to illustrate the need for rethinking through. Here automation has clearly conquered in only two cases, continuous casting and continuous rolling of tin plate. Steelmaking as a whole—materials to blast furnaces, thence blast furnaces to open-hearth furnaces, to soaking pits, and finally to rolling mills—seems, on the best evidence, not suited to continuous -flow processes. Yet he sees the possibility that here, as in many similar cases, such a rethinking through might reveal automation potentialities which have already been developed, or at least foreshadowed, by current advances in steel metallurgy. One convincing example may be offered in evidence: continuous casting has already eliminated a previously discrete soaking-pit stage which had long been regarded as an unavoidable breakingpoint in flow production.

Far more important is the rethinking of both the possibilities and the impheations of generalizing the new scientific revolution in industry throughout, so to speak, the central trunk and main branches of the industrial system. This calls for (i) reexamination of the entire structure of available raw materials and of the manifold and increasingly more urgent problems of conservation; (2) reconsideration of the technical and economic implications of universalization of systems of specifications and standards; and (3) reformulation of the supply and cost allocation problems at the numerous points where—as in chemical analysis and synthesis, or in unified grid power systems—facilities are of the multiplepurpose, multiple-function, or multiple-product types. It calls also for (4) new inquiries into the bearing of interconnections among plants enmeshed in such patterns of directly linked, continuously flowing production upon plant agglutination and, alternatively, upon possibilities of plant relocation and scattering; and (5) new lines of inquiry into the supply, cost, and pricing problems involved in plant investment and in the marketing and distribution of, and the consumer demand for, the commodities and services made available through these vastly altered methods of production.

RETHINKING THROUGH ON THE TECHNICAL SIDE During the last century, wrote Sir W. C. Dampier of the scientific age of the nineteenth century, in contrast to the manner in which the great inventions of former ages occurred, we see scientific investigation in the laboratory preceding and suggesting practical applications and inventions. ¹⁸ Since he wrote (1910), this statement might better be rephrased to read that scientific research has already so far permeated the industrial system that we can no longer tell where the one begins and the other ends. The scientific age, that is to say, has truly arrived when not only invention but also the entire round of productive operations has been organized along scientific lines. Nobody, of course, claims that such a picture holds for the contemporary industrial system in its entirety. But the intention to bring it about does hold for swiftly expanding sectors, and from the principles evolved in these sectors it now seems possible to foresee some, if not most, of the principles, problems, and solutions which are apt to be characteristic of such a consummation.

For one thing, given any structure of demand, science—theoretical and applied (engineering)—clearly holds the principal key to adequacy of resources. With minor exceptions, and whether one has in mind the agricultural, mineral, or energy resources of land, sea, or air, both the discovery and the best use over time (conservation) of known types of resources depend almost entirely upon the most carefully planned scientific exploration and scientifically directed exploitation. As for the new types of resources, such as uranium and thorium for atomic energy, these are now wholly a product of scientific research (chap. ii). The scale of additions made to resources in the last 30 years by scientific research—including the discovery of new methods of utilizing otherwise waste products—may well be in excess of all previous discoveries of minerals, fuels, and other materials.

Resources and their conservation, however, are only the beginning of the burden placed upon science by its wedding with industry. The problems faced by the scientific staffs involved tend to become coextensive with the entire concert of industrial operations.

To put the matter somewhat more explicitly, theoretically the chemical revolution extends the range of problems so as to encompass the physical-chemical properties of all possible alternative and substitute materials in nature; the specifications revolution so as to encompass the properties, design, performance, and use of all products—whether as raw materials, component parts, or assembled products—for both producers’ and consumers’ goods; the automation revolution so as to encompass all technical processes, along with the interlinking networks of power, transport, and telecommunication, from the raw-material stage to the point of distribution for purposes of final consumption; and the energy revolution so as to promote the new scientific revolution in all areas and regions of the earth which possess adequate resources for development on a long-term basis.

Each advance along these lines introduces into industrial technology at least some of the patterns of complexity, interdependence, and order characteristic of the changing view of the nature of the world held by science itself. By the same token, it also adds further to the growing need for a more effective organization of scientific efforts, long felt to be an increasingly more important precondition to further advance in each of the various branches of science. From the time of the founding of the great national academies of the seventeenth and eighteenth centuries, but increasingly with the cumulation of scientific information, this need has grown.

It is an axiom that the problems and the laws of science are a seamless web; that chemistry is interrelated with physics, atomic research with astronomy, the physical sciences with the biological sciences, and both of the latter with the social sciences. But from the same axiom it also follows that advance in the principal segments or spheres of scientific research is dependent, to some extent, upon advance elsewhere.

The ever closer working-alliance between research and technology is adding a new note of urgency to the recognized need for organization, mobilization, and pooling of scientific research among the hundreds of public and private research institutes and academies scattered throughout the world. The very sustenance of life itself, the possibility of maintaining or further raising material standards of living, and—at least currently—the chances of securing sufficient military security to escape total annihilation, all alike depend directly and with increasing weight upon the effectiveness with which the organization of science is carried through on the most comprehensive basis possible. The data brought together in chapter iii will illustrate how important this new emphasis has become.

Along with this acute rephrasing of the need for better and more comprehensive organization of scientific resources themselves, the growing fusion between research and industrial practice brings into sharp focus new problems which are of an unprecedented difficulty. The central and obvious fact must be faced that in strong contrast with the situation which obtains when science is mostly preoccupied with the facts of nature per se, the shifting of focus to include, or at least directly link up with, problems of industry serves inevitably to confront science with a greater and more commanding sense of the facts of human purpose.

From time immemorial productive operations have been undertaken to achieve ends, to fulfill aims, to reach goals, to satisfy objectives, to express interests, and to subserve values. Science, in its new role of master of the secrets of instrumentation, however motivated by pure research interests in its more remote depths, is now in process of being made, on a vastly expanded scale, a direct working party to the patterns of human ends as well as of industrial means. It then follows that unless both means and ends make some sense to the scientist, through him industrial technology may be faced with a new dry-rot capable not only, of crumbling the edge of scientific and engineering advance, but also of disturbing the day-by-day functioning of the system as a going concern.

Three new sets of problems—old in terms of human life, but lent a new meaning in this setting—immediately face the scientist and the engineer, and require of them a new concern for the problems of human society.

The first set of problems is associated with redirection of research and reformulation of plans for technological changes in terms of overriding considerations of conservation. As mentioned above, conservation is now more than coextensive with natural resources; it is coextensive with the methods of using these resources. Its problems, that is to say, extend from the mine, forest, or field through all uses involved in the processes of production and onward to the ultimate consumer. Wastages may occur at any point; conservation is a problem at all points. Put differently, the scientist and the engineer are now concerned with the problem of efficiency under the regime of generalized mass production. They must, accordingly, face the problem of efficiency at all points of the system.

The problems of conservation and efficiency are no sooner faced on this comprehensive footing, than it must be realized that concepts of engineering efficiency in the larger frame of reference lack a general common denominator, and have no alternative but to seek expression by and through money equivalents. Efficiency becomes transmuted in terms of economy, and economy is a problem of costs. But to resolve efficiency factors into cost factors confronts the affected sciences with a second set of problems, i.e., with those associated with the meaning and validity of costs, their incidence upon individuals and groups, and the social as well as the technical conditions for their minimization in the supply, not of goods in general, but of all the requirements for the eventual delivery of ultimate consumers’ goods and services which themselves are looked upon as means for fulfilling human aspirations. Cost is the most important technical clue to both internal and external economies (in the Marshallian sense), and alternatively to the preventable waste of productive resources. It becomes, accordingly, immediately evident that the technical rethinking through of which we have been speaking is heavily dependent upon and closely tied up with the need for a further rethinking through on the economic side (chap. xiii).

The elements of this latter need already are evident throughout the economic literature, and have confronted economic science with a number of problems which it cannot handle alone. Great significance inheres in the fact that economics is a social, not a natural science. But as a social science its concerns are more intimately tied up with those of the other social sciences than are those, say, of physics with chemistry, astronomy, and the biological sciences. The engineer and the scientist, and along with them more clearly than heretofore the economist, are then faced with a third set of problems which may be broadly designated as cultural in the sense understood by sociologists, historians, and especially anthropologists. These problems have to do with the individual and social values that motivate economic action in the face of the astounding potentialities of the scientific revolution in industry on the one hand, and on the other with the swiftly changing structures and disciplines of organization required to realize these potentialities without subordinating all ends to means.

This third set of problems will be generally ignored in this study—not because they are considered to be of minor importance, but because, contrariwise, they seem (at least to the writer) of such transcendent importance for both economics and all the other social sciences that it is best to postpone even a preliminary consideration of the new types of problems arising from the emerging scientific revolution in industry until a reasonably clear picture may be had of just what this revolution actually means for the productive apparatus. They are, so to speak, temporarily impounded in a Marshallian ceteris paribus, the better to undergo more searching analysis later.

The second set of problems, centered in the meaning of costs, however, is of vital importance to this study; throughout it the proposition will be maintained that they call for a continuing rethinking through which has far-reaching implications for the scope and method of the science of economics.

RETHINKING THROUGH ON THE ECONOMIC SIDE:

A PRELIMINARY PROBLEM

There is a view of science which denies the need of rethinking through the basic propositions and methods of economics on any occasion other than the appearance of a new and startling theory, as in the case of quantum mechanics. This is the position of logical positivism, which defends its approach on the grounds of temporal universalism of relevant scientific propositions. This position holds that economics is, or at least should be, developed as are physics, chemistry, and mathematics, on the assumption that basic data with respect to human nature and fundamental relations in society do not change. Its premises, propositions, inferences, conclusions, and laws would then not be subject to historical change. Accordingly, whatever the impact on society of the new industrial revolution, to logical positivists it would not change either fundamental data or underlying law.¹⁹

It would lead too far afield to explore here the reasons that render this position wholly inadmissible in the social sciences. However, it is important to note that, with respect to the data of explication (Carnap’s phrase for the data which science is to examine with a view to explaining relations having the force of law)²⁰ and in sharp contrast with the natural sciences, the facts of technology and the social sciences are undergoing perpetual, irregular, and highly discontinuous (yet also cumulative) change. The industrial revolution and the decline of feudalism are examples. Furthermore, most of the data are rarely subject to experimental segregation, and then but very imperfectly and crudely—mainly by way of rough analogy. Actually, all the data in the hands of human beings are