... In 1941, the U.S. Maritime Commission (USMC) embarked on a massive expansion of the merchant marine fleet under the auspices of the Emergency Shipbuilding Program. The standard Liberty ship, an all-welded cargo ship with a displacement of 7,000 tons, was the centerpiece of this program. Over a four-year period, 16 U.S. shipyards delivered a total of 2,699 ships, by far the largest production run of a single ship class. A revolutionary aspect of the Liberty shipbuilding program was that a substantial portion of ship construction was undertaken off the ways (the berths in which the keel is laid and from which the ship is eventually launched). Most yards had a linear 'conveyor belt' plan. Steel plates and shapes entered a holding area in the yard on its inland side, and passed through a large prefabrication area where major sections of the ship were constructed. The sections were then transported on rails or by moveable cranes to one of the ways, where large cranes lifted them onto the hull for final assembly. Welding constituted the bulk of this work. A Liberty ship contained almost 600,000 feet of welded joints, and welding labor accounted for about one third of the direct labor employed in construction. Once the main structures were completed, the vessel was launched and moved to the outfitting docks nearby. Another keel was typically laid on the vacant way within twenty-four hours. At the outfitting dock, final painting, joinery and electrical work were completed, and rigging and lifeboats were added. The same day that the final outfitting was completed, the ship was delivered to a representative of the USMC, boarded by its crew, and sent to join one of hundreds of convoys crossing the Atlantic or the Pacific.

Economists have been interested in the Liberty ship program primarily because of the dramatic increases in labor productivity that were observed in a very short period of time. The phenomenal increase in labor productivity experienced during the Emergency Shipbuilding Program, first brought to the profession's attention by Searle (1945), is now well known. Over the course of three years, labor productivity on Liberty ships rose at an average annual rate of 40 percent. Production time fell even more rapidly. While the first ships produced in each yard required more than sixth months from keel laying to delivery, only thirty days was required by late 1943 (see Figures 1 and 2). For over fifty years, economists have attributed these dramatic gains to learning by doing.