Harold Barger

English

Research Papers in Economics

This PDF is a selection from an out-of-print volume from the National Bureau
of Economic Research
Volume Title: Distribution's Place in the American Economy Since 1869
Volume Author/Editor: Harold Barger
Volume Publisher: NBER
Volume ISBN: 0-87014-057-4
Volume URL: http://www.nber.org/books/barg55-1
Publication Date: 1955
Chapter Title: Foreword to "Distribution's Place in the American Economy
Since 1869"
Chapter Author: Harold Barger
Chapter URL: http://www.nber.org/chapters/c2693
Chapter pages in book: (p. -9 - -7)FOREWORD
THE topic of this study is the changing place of distribution in the
nation's economy. Has its output, i.e. the services it renders to the
consumer, kept pace with the growth of the economy? What of the
draft it makes upon the nation's labor force? Has distribution cost
increased or diminished with the years? How have the relative im-
portance of wholesale and retail trade, and the kind of merchant en-
gaged in each, altered with time?
Until recently the field of distribution was seriously neglected by
statisticians. The first careful surveys of distribution cost were made
no earlier than World War I. Nor did the Bureau of the Census at-
tempt to cover this sector of the economy prior to 1929, while the
Bureau of Labor Statistics first took an interest in retail and whole-
sale trade at an even later date. On many aspects of distribution,
therefore, we possess comprehensive and readily accessible informa-
tion only for the two or three most recent decades. Although much
scattered data for earlier years can be found, the contrast between
the wealth of information available today and the sparsity of ma-
terial prior to World War I is so marked that we were seriously
tempted to confine the inquiry to recent developments in the field.
We soon found, however, that what we were able to learn about dis-
tribution in recent times was so novel and surprising that we could
not restrain our curiosity concerning an earlier era. Which of the
trends disclosed for recent years by our relatively reliable modern
data, we asked ourselves, also were present during that earlier period?
Consider the three leading findings of the present study: (1) Be-
tween 1930 and 1950 the fraction of the labor force engaged in com-
modity distribution (i.e. retail and wholesale trade) rose from one
worker in eight to one worker in six; between the same dates, per-
Sons engaged in commodity production (i.e. agriculture, mining,
and manufacturing) underwent a relative decline from one-half of
the labor force to two workers in five. (2) Despite uncertainties in
measuring output in trade, we may say that output per man-hour
rose by about one-fifth between 1929 and 1949; in agriculture, mm-
ing, and manufacturing combined, it rose by two-thirds. (3) Distri-
bution cost, measured as a fraction of the retail value of commodi-
ties, remained remarkably stable. Since World War I, for all finished
goods and construction materials sold at retail, retailers and whole-
ixFOREWORD
salers have together obtained with remarkable regularity around 37
cents of each dollar of retail value. Of course there were some varia-
tions between branches of trade, and some movement from one year
to another, but no trend is discernible during the past three decades
in the merchant's share of the retail sales dollar.
To summarize: Since the 1920's the fraction of the labor force
engaged in distributing commodities has increased sharply, while
the fraction engaged in producing commodities has declined, though
not so sharply. Output per man-hour in distributing commodities
increased, although much less rapidly than in their production. Fi-
nally,. the distributor's share of the retail sales dollar showed neither
an upward nor a downward
These three findings rest upon census data and similarly solid
foundations, .and their reliability does not appear to be in question.
What can we discover about similar trends in the period before
World War I?
We have ransacked the record. We have pieced together every
available scrap of information. And this is our conclusion: The first
and second findings are just as applicable to the period between the
Civil War and World War I as they are to the period since World
War L.The third finding, by contrast, requires modification.
That is to say; the fraction of the labor force engaged in distribut-
ing commodities has shown an upward trend, and the fraction en-
gaged in producing commodities a downward trend, ever since the
Civil War. Again, output per man-hour, in both distribution and pro-
duction, has tended to rise throughout the eight decades; but it has
tended to rise much more rapidly in agriculture, mining, and manu-
facturing than in retail and wholesale trade. Finally, the distribu-
tor's share of the retail sales dollar, decidedly stable since World
War I, apparently experienced a definite but very slow expansion
between the Civil War and World War I.
We believe that, stated thus broadly, our findings for the period
prior to World War I cannot well be assailed. However, the in-
dividual figures upon which the above broad conclusions are based—
figures to be found in the tables of the report—clearly are much less
precise and reliable than those for the period since World War I.
Let us see why.
The first finding—on the distribution of the labor force—rests
upon the decennial population census, in using which, prior to 1930,
the industrial must be approximated from the occupational tabula-
tion. That is to say, the aggregate number of persons engaged in re-
tail and wholesale trade has to be estimated from the numbers in
certain "characteristic occupations," e.g. "dealers" and "clerks in
xFOREWORD
stores." We have checked the figures, experimented with extreme as-
sumptions about possible errors, and find that the broad conclusion
is still warranted.
The second finding—the contrast in rates of change in man-hour
output—rests upon the together with estimates for (1) trends
in hours worked per year by persons engaged in commodity distribu-
tion and in commodity production, respectively, and (2) trends in
the output of commodity distribution and of commodity production.
Estimates for hours worked in commodity production have long been
available, but for hours worked in retail and wholesale trade we
found it necessary to digest numerous reports from statistical bureaus
of individual states and other sources; hence the final figures are only
approximate. Output estimates for the three commodity-producing
industries rest upon decennial census data. Estimates of the net out-
put of distribution are derived in turn from commodity out-
put, adjusted to allow for changes in the volume of output that
ters the distribution system and also for the volume of distributive-
servicesrendered per unit; but prior to 1929 the rests
upon a mass of partial and scattered data described in the report.
Here too we experimented with extreme assumptions regarding the
possibility of error; but, as will be seen from the quoted results of
alternative calculations, our broad conclusions are not disturbed.
The third finding—a slow rise in the distributor's share of the re-
tail sales dollar during the period prior to World War I—is largely
independent of the foregoing sources and rests upon three distinctive
types of data: (1) censuses of distribution taken in Massachusetts
and Indiana prior to 1900; (2) surveys and opinions published in
trade publications; and (3) the historical records of certain in-
dividual merchandising firms. The logical relationship between the
first two findings and the third is investigated in the body of the re-
port, and the latter found to be broadly consistent with the former.
In conclusion, it should be emphasized that the results offered in
this volume for the period before World War I are in no sense merely
extrapolations to earlier years of results already obtained for recent
decades. The earlier figures represent the clearest picture of that pe-
riod that can now be, or perhaps ever will be, assembled for the par-
ticular field to which they relate. The pre-World War I figures are in-
cluded here both because the author believes they are adequately,
though not overgenerously, supported by contemporary source ma-
terials and because they show that certain broad trends observable
•since World War I were continuations of tendencies already in op-
eration in the late nineteenth century.
HAROLD BARGER

Distribution's Place in the American Economy Since 1869

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics