One of my favorite places to visit is Old Sturbridge Village in Sturbridge, Massachusetts, where 1820s-1830s New England is created in living and loving detail. During one visit, I recall an interpreter explaining that it requires four years to raise and train an ox to be productive at plowing and transporting items on the farm. That, of course, is a considerable investment for any farmer. Compare that to the four days it might take to acquire and learn to operate a tractor, and we can appreciate one major difference between farming then and now.
Because both the ox and the tractor are what economists refer to as “capital goods” – goods used to produce consumer goods – we can see that one major source of increased productivity is improved capital goods. Better tools equals more and better products and services.
And the reason such tools constitute advances is that they not only allow us to produce much more – but also very much sooner.
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