a1 Senior Lecturer in Economic History and Accounting, Department of Economic History, London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom. E-mail: [email protected].
Motion pictures constituted a revolutionary new technology that transformed entertainment—a rival, labor-intensive service—into a non-rival commodity. Combining growth accounting with a new output concept shows productivity growth in entertainment surpassed that in any manufacturing industry between 1900 and 1938. Productivity growth in personal services was not stagnant by definition, as current understanding has it, but instead was unparalleled in some cases. Motion pictures’ contribution to aggregate GDP and TFP growth was much smaller than that of general purpose technologies steam, railways, and electricity, but not insignificant. An observer might have noted that “motion pictures are everywhere except in the productivity statistics.”
“So long as the number of persons who can be reached by a human voice is strictly limited, it is not very likely that any singer will make an advance on the £10,000 said to have been earned in a season by Mrs. Billington at the beginning of the last century, nearly as great as that which the business leaders of the present generation have made on the last.”
Research for this article was partially supported by an ESRC/AIM Ghoshal Fellowship, grant number RES-331-25-3012. I thank William Baumol, Stephen Broadberry, Karen Clay, Nicholas Crafts, Alexander Field, Robert Gordon, Massimo Motta, Nicholas Oulton, Joachim Voth, Price Fishback, and the anonymous referees for comments and suggestions. The article also benefited from comments at the CEPR/CREI workshop on new goods at the Universitat Pompeu Fabra in Barcelona, the Economic History Association Conference, the European Historical Economics Society conference, and seminars at the European University Institute, the London School of Economics, and the Universities of Alicante, Bielefeld, Utrecht, Warwick, and Zürich. The usual disclaimer applies.