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Growth in a high-wage economy: California's industrial development, 1900-1960
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Growth in a high-wage economy: California's industrial development, 1900-1960
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Dissertation
Growth in a high-wage economy: California's industrial development, 1900-1960
1990
Overview
Since 1900, California has been transformed from a small, slow-growing, peripheral economy to a dynamic center of high-technology and manufacturing. If treated as a separate nation, California would rank today as the eighth largest economy in the world. This study explores this transformation of this high-wage economy. It examines the sources of slow growth in the nineteenth century and the revitalization of growth in the twentieth, the state's emergence as the nation's \"Second Industrial Belt,\" and its rise as a world leader in high-technology. This work is comprised of three major essays. The first examines the re-acceleration of income and population growth beginning around 1900. It argues the state experienced a scale-dependent process of expansion based on import-substitution. The essay includes a theoretical model of this growth process, capturing the positive interaction between local market size and local production. The second essay explores detailed case studies of the tire and automobile industries in California, industries which were central to the state's emergence as the \"Industrial Belt\" of the West. These case studies indicate that regional market size was an important determinant of the timing of entry and level of production in these two industries, thus providing micro-level support for the growth process considered in the first essay. The third essay presents a case study of the state's vital aircraft industry. This essay re-interprets the forces leading to the localization of this export activity in the state. It asserts a vigorous home market and path-breaking innovative efforts of local firms were the key factors, but also notes the important role of accident in the location choice. The work concludes with a comparison the California experience of high-wage industrialization with that of the nation as a whole.
