From the earliest days of the American republic, its citizens have been concerned about the long-range economic prospects, but only in more recent years has statistical evidence been gathered and organized in a way that records and measures the economic development of the country with reasonable accuracy. On the basis of current and historical economic information, it is now feasible to project past trends of economic growth some time into the future. By drawing a picture of what things might be like ten, twenty, or more years ahead, it becomes possible to uncover obstacles which, unless removed, may hinder development.
Over the long term the United States has grown rapidly as a result of a large supply of land and other natural resources, a vigorous, mobile, and increasing population, free and decentralized economic and political institutions, a large internal free trade market, the early establishment and rapid spread of a general public educational system, and an eagerness to apply new technology to the problems of economic development.
In the last hundred years population has increased sixfold from 31 million to 180 million. The net reproduction rate is about 1.7, as compared with slightly less than 1 in 1935 at the bottom of the Great Depression, and about 1.3 fifty years ago.
Over the century the gross national product (which measures the total value of end products and services the economy) has increased by about thirty times real terms, that is, with allowance for changes in the value of the dollar. In 1960 GNP was $503 billion, an increase of about 40 percent in the decade of the 1950's, as calculated in constant prices. Total national wealth, including structures of all kinds, producer-durable and consumer-durable equipment, inventories, public and private lands and net foreign assets, though very difficult to calculate, probably exceeds $1.5 billion—more than double what it was valued at in constant prices fifty years ago.
Industrial production, including manufacturing, mining, and utilities, has increased greatly over the years, by nearly three times since 1929. Farm output rose by only a little more than 50 percent during the same period.
The total labor force, including about 2.5 million in the Armed Services, came to about 73 million persons in 1960; in 1910 it was about 32 million. Weekly hours of work of production workers in manufacturing have dropped from about 47 in 1920 to about 39 in 1960.
As in other countries, there has been a long-term upward movement of prices in the United States economy. Since 1913, the year immediately prior to the First World War, the wholesale price index has increased 2.6 times and the consumer price index 3 times. The wholesale price index of all commodities during the past decade rose by about 16 percent, though prices received by farmers for all farm products dropped by about 8 percent.
Projection of economic magnitudes into the distant future is hazardous, no matter how accurate the historical data on which it is based. A great deal hinges upon the trends in the birth rate, in size of the labor force, in technology, in productivity increase, and many other factors. However, assuming that past trends more or less continue, that no major war or other catastrophe occurs, and that a reasonably high level of economic activity is maintained, the projections shown below may be offered.
These estimates are taken from a work in progress in Resources for the Future which attempts to delineate the size and general shape of the US economy for twenty and forty years ahead on the basis of carefully stipulated assumptions. A change in any one of these basic factors would change the complex of estimates. Furthermore, the preceding table shows for 1980 and 2000 only medium estimates for all items. Actually there could be a considerable range above and below the estimates in the table. For example, with a larger population and labor force and a more rapid increase in productivity, GNP in 1980 might come to $1,250 billion, instead of $1,060 billion. Or, with a smaller population and labor force and a slower rate of productivity increase, GNP in 1980 might come to only $960 billion. By 2000 the range would be even greater. On the basis of these projections that suggest the general dimensions of future needs, the RFF group is developing projections of the demand for intermediate materials like steel and lumber; and of the requirements for and potential supplies of basic natural resources.
Why make projections as far ahead as forty years, which is beyond the planning horizon of most business firms and government agencies? One answer, among others, is that many decisions having to do with natural resources development, such as the opening of new mines or the building of huge multiple-purpose dams, be decided on the basis of the best available estimates of their probable long-range effect. Forty years is none too long when one is thinking of Hoover Dam, the nation-wide soil conservation program, or the development of a private oil-shale industry. These decisions, whether public or private, have to be taken with some view in mind of their effects forty or even more years into the future.
Adapted from lectures by Joseph L. Fisher
A version of this article appeared in print in the June 1961 issue of Resources magazine.
