Hostname: page-component-7c8c6479df-5xszh Total loading time: 0 Render date: 2024-03-27T17:25:56.028Z Has data issue: false hasContentIssue false

How Motion Pictures Industrialized Entertainment

Published online by Cambridge University Press:  14 December 2012

Gerben Bakker*
Affiliation:
Senior Lecturer in Economic History and Accounting, Department of Economic History, London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom. E-mail: g.bakker@lse.ac.uk.

Abstract

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.”1

Alfred Marshall

Type
ARTICLES
Copyright
Copyright © The Economic History Association 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Adler, Moshe. “Stardom and Talent.” American Economic Review 75, no. 1 (1985): 208–12.Google Scholar
Allen, Robert C.Vaudeville and Film, 1895–1915. New York: Arno Press, 1980.Google Scholar
Bakker, Gerben. “The Decline and Fall of the European Film Industry: Sunk Costs, Market Size, and Market Structure, 1890–1927.” Economic History Review 58, no. 2 (2005): 310–51.CrossRefGoogle Scholar
Bakker, Gerben. “The Evolution of Entertainment Consumption and the Emergence of Cinema, 1890–1940.” Advances in Austrian Economics 10 (2007): 93137.CrossRefGoogle Scholar
Bakker, Gerben. Entertainment Industrialised: The Emergence of the International Film Industry, 1890–1940. Cambridge: Cambridge University Press, 2008.Google Scholar
Baumol, William J.Macroeconomics of Unbalanced Growth: The Anatomy of an Urban Crisis.” American Economic Review 57, no. 3 (1967): 415–26.Google Scholar
Baumol, William J., Blackman, Sue Anne Batey, and Wolff, Edward N.. “Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence.” American Economic Review 75, no. 4 (1985): 806–17.Google Scholar
Baumol, William J., and Bowen, William F.. Performing Arts: The Economic Dilemma. A Study of Problems Common to Theater, Opera, Music, and Dance. New York: Twentieth Century Fund, 1966.Google Scholar
Bernheim, Alfred. The Business of the Theater: An Economic History of the American Theater, 1750–1932. New York: Benjamin Blom, 1932.Google Scholar
Besanko, David et al. . Economics of Strategy. Hoboken, NJ: John Wiley, 2004.Google Scholar
Bowser, Eileen. History of American Cinema II: The Transformation of Cinema, 1907–1915. Berkeley: University of California Press, 1990.Google Scholar
Bresnahan, Timothy F., and Gordon, Robert J.. “Introduction.” In The Economics of New Goods, edited by Bresnahan, Timothy F. and Gordon, Robert J., 126. Chicago: University of Chicago Press, 1997.CrossRefGoogle Scholar
Broadberry, Stephen. Market Services and the Productivity Race, 1850–2000: British Performance in International Perspective. Cambridge: Cambridge University Press, 2006.CrossRefGoogle Scholar
Bureau of Economic Analysis. The National Income and Product Accounts of the United States, 1929–1974. Washington, DC: United States Department of Commerce, 1977 (including revisions published on the BEA website).Google Scholar
Bureau of Labor Statistics, “Cost of Living in the United States.” Bulletin of the United States Bureau of Labor Statistics 357 (May 1924).Google Scholar
Bureau of Labor Statistics. “Effects of Technological Changes upon Employment in the Amusement Industry.” Monthly Labor Review 12, no. 2 (1931): 17 [261–67].Google Scholar
Canty, George R.The European Motion Picture Industry in 1932.” Trade Information Bulletin 815 (June 1933).Google Scholar
Chaplin, Charles. My Autobiography. London: Penguin, 2003 [orig. ed. 1964].Google Scholar
Cockenboo, Leslie. “Production Functions and Cost Functions: A Case Study.” In Managerial Economics and Operations Research: Fifth Edition, edited by Mansfield, Edwin, 88111. New York: W. W. Norton, 1987.Google Scholar
Conant, Michael. Antitrust in the Motion Picture Industry: Economic and Legal Analysis. Berkeley: University of California Press, 1960.Google Scholar
Crafts, N. F. R.Steam as a General Purpose Technology: A Growth Accounting Perspective.” Economic Journal 114, no. 2 (2004): 338–51.Google Scholar
Department of Commerce. Historical Statistics of the United States from Colonial Times to 1970. Washington, DC: United States Department of Commerce, 1975.Google Scholar
Denison, Edward F.Why Growth Rates Differ: Postwar Experience in Nine Western Countries. Washington, DC: Brookings Institution, 1967.Google Scholar
Dewhurst, J. Frederic, and Associates. America's Needs and Resources: A New Survey. New York: Twentieth Century Fund, 1955.Google Scholar
Eeckhout, Jan. “Gibrat's Law for (All) Cities.” American Economic Review 94, no. 5 (2004): 1429–51.CrossRefGoogle Scholar
Ehrlich, Cyril. The Music Profession in Britain Since the Eighteenth Century: A Social History. Oxford: Oxford University Press, 1986.Google Scholar
Field, Alexander J.The Most Technologically Progressive Decade of the Century.” American Economic Review 93, no. 4 (2003): 13991413.Google Scholar
Field, Alexander J.. “Technological Change and U.S. Productivity Growth in the Interwar Years.” The Journal of Economic History 66, no. 1 (2006): 203–36.Google Scholar
Field, Alexander J.. A Great Leap Forward: 1930s Depression and U.S. Economic Growth. New Haven, CT: Yale University Press, 2011.Google Scholar
Fogel, Robert W.A Quantitative Approach to the Study of Railroads in American Economic Growth.” The Journal of Economic History 22, no. 2 (1962): 163–97.Google Scholar
Freeman, Chris, and Soete, Luc. The Economics of Industrial Innovation. London: Pinter, 1997.Google Scholar
Goldin, Claudia F., and Katz, Lawrence F.. The Race Between Education and Technology. Cambridge, MA: The Belknap Press of Harvard University Press, 2008.Google Scholar
Gomery, Douglas. The Hollywood Studio System. New York: MacMillan, 1986.Google Scholar
Greenwald, William I. “The Motion Picture Industry: An Economic Study of the History and Practices of a Business.” Ph.D. diss., New York University, 1950.Google Scholar
Haines, Michael. “Industrial Work and the Family Life Cycle, 1889–1890.” Research in Economic History 4 (1979): 289356.Google Scholar
Huberman, Michael, and Minns, Chris. “The Times They Are Not Changin’: Days and Hours of Work in Old and New Worlds, 1870–2000.” Explorations in Economic History 44, no. 4 (2007): 538–67.CrossRefGoogle Scholar
Hughes, Glen. A History of the American Theater, 1700–1950. New York: S. French, 1951.Google Scholar
Hulten, Charles R.Growth Accounting with Intermediate Inputs.” Review of Economic Studies 45, no. 3 (1978): 511–18.Google Scholar
Irwin, Douglas A.Tariffs and Growth in Late-Nineteenth-Century America.” World Economy 24, no. 1 (2001): 1530.Google Scholar
Johnston, Louis D., and Samuel H. Williamson. “What Was the U.S. GDP Then?” http://www.measuringworth.org/usgdp/, MeasuringWorth, 2010.Google Scholar
Jowett, Garth S.The First Motion Picture Audiences.” Journal of Popular Film 3, no. 1 (1974): 3945.CrossRefGoogle Scholar
Kendrick, John. Productivity Trends in the United States. Princeton, NJ: Princeton University Press, 1961.Google Scholar
Kraft, James P.Musicians in Hollywood: Work and Technological Change in Entertainment Industries, 1926–1940.” Technology and Culture 35, no. 2 (1994a): 289314.Google Scholar
Kraft, James P.. “The ‘Pit’ Musicians: Mechanization in the Movie Theaters, 1926–1934.” Labor History 35, no. 1 (1994b): 6692.Google Scholar
Kuznets, Simon. Capital in the American Economy: Its Formation and Financing. Princeton, NJ: Princeton University Press, 1961.Google Scholar
Lamson, Robert D.Measured Productivity and Price Change: Some Empirical Evidence on Service Industry Bias, Motion Picture Theaters.” Journal of Political Economy 78, no. 2 (1970): 291305.Google Scholar
Lancaster, Kelvin. “A New Approach to Consumer Theory.” Journal of Political Economy 74, no. 2 (1966): 133–57.Google Scholar
Lebergott, Stanley. Consumer Expenditures: New Measures and Old Motives. Princeton, NJ: Princeton University Press, 1996.Google Scholar
Leontief, Wassily et al. , Studies in the Structure of the American Economy: Theoretical and Empirical Explorations in Input-Output Analysis. New York: Oxford University Press, 1953.Google Scholar
Londré, Felicia Hardison, and Watermeier, Daniel J.. The History of North American Theater. New York: Continuum, 2000.Google Scholar
Maddison, Angus. Monitoring the World Economy, 1820–1992. Paris: Development Centre, OECD, 1995.Google Scholar
Marshall, Alfred. Principles of Economics, 8th edition. New York: MacMillan, 1947.Google Scholar
McLaughlin, Robert W.Broadway and Hollywood: A History of Economic Interaction. New York: Arno Press, 1974.Google Scholar
Millward, Robert. “Productivity in the U.K. Services Sector: Historical Trends 1856–1985 and Comparisons with the U.S.A., 1950–85.” Oxford Bulletin of Economics and Statistics 52, no. 4 (1990): 423–36.Google Scholar
Moore, Thomas Gale. The Economics of the American Theater. Durham, NC: Duke University Press, 1968.Google Scholar
Nordhaus, William D.Productivity Growth and the New Economy.” Brookings Papers on Economic Activity 2002, no. 2 (2002): 211–65.CrossRefGoogle Scholar
Nordhaus, William D.. “Schumpeterian Profits in the American Economy: Theory and Measurement.” NBER Working Paper No. 10433, Cambridge, MA, April 2004.Google Scholar
Officer, Lawrence H. “The Annual Consumer Price Index for the United States, 1774–2009.” http://www.measuringworth.org/uscpi/, MeasuringWorth, 2009.Google Scholar
Officer, Lawrence H., and Samuel H. Williamson, “Annual Wages in the United States, 1774–2008.” http://www.measuringworth.org/uswages/, MeasuringWorth, 2009.Google Scholar
Owen, John D.The Price of Leisure: An Economic Analysis of the Demand for Leisure Time. Montreal: McGill-Queens University Press, 1970.Google Scholar
Poggi, Jack. Theater in America: The Impact of Economic Forces, 1870–1967. Ithaca, NY: Cornell University Press, 1968.Google Scholar
Psacharopoulos, G.Earnings and Education in OECD Countries. Paris: OECD, 1975.Google Scholar
Rosen, Sherwin. “The Economics of Superstars.” American Economic Review 71, no. 4 (1981): 845–54.Google Scholar
Rosenbloom, Joshua. “The History of American Labor Market Institutions and Outcomes.” In EH.Net Encyclopedia, edited by Robert Whaples. Available at http://eh.net/encyclopedia/article/Rosenbloom.LaborInst, 2006.Google Scholar
Scherer, F. M., and Ross, David. Industrial Market Structure and Economic Performance. Third Edition. Boston: Houghton Mifflin, 1990.Google Scholar
Sedgwick, John, and Pokorny, Michael. “The Risk Environment of Film Making: Warner Brothers in the Interwar Years.” Explorations in Economic History 35, no. 2 (1998): 196220.Google Scholar
Sedgwick, John, and Pokorny, Michael. “The Film Business in Britain and the United States During the 1930s.” Economic History Review 57, no. 1 (2005): 79112.Google Scholar
Solow, Robert M.Technical Change and the Aggregate Production Function.” Review of Economics and Statistics 39, no. 3 (1957): 312–20.Google Scholar
Taylor, William R., ed. Inventing Times Square: Commerce and Culture at the Crossroads of the World. Baltimore, MD: Johns Hopkins University Press, 1991, 1996.Google Scholar
Triplett, Jack E., and Bosworth eds, Barry P.. Productivity in the U.S. Services Sector: New Sources of Economic Growth. Washington, DC: Brookings Institution, 2004.Google Scholar
U.S. Commissioner of Labor. “Part III, ‘Cost of Living,’” In Sixth Annual Report of the Commissioner of Labor. Washington, DC: U.S. Congress, House of Representatives, House Executive Document 265, 51st Cong., 2nd sess., 1890.Google Scholar
U.S. Commissioner of Labor. “Part III, ‘Cost of Living,’” In Seventh Annual Report of the Commissioner of Labor. Washington, DC: U.S. Congress, House of Representatives, House Executive Document 232, 52nd Cong., 1st sess., 1891.Google Scholar
Utterback, James M.Mastering the Dynamics of Innovation. Cambridge, MA: Harvard Business School Press, 1996.Google Scholar
Varian, Hal R.Microeconomic Analysis. Third Edition. New York: W. W. Norton, 1992.Google Scholar
Wharton, John F.Crisis in the Free World Theater: A Statement of the League of New York Theaters. Washington, DC: GPO, 1962.Google Scholar
Williams, Faith M., and Hanson, Alice C.. “Money Disbursements of Wage Earners and Clerical Workers, 1934–36. Summary Volume,Bulletin of the United States Bureau of Labor Statistics 638 (1941).Google Scholar