Speaking of Whig history, consider this post from Robert Samuelson at RealClearMarkets on how the U. S. is suffering from the “post-industrial blues”:
The coming of the “postindustrial society†was first popularized by Harvard University sociologist Daniel Bell in a 1973 book by the same name. At the time, the U.S. economy was still dominated, symbolically at least, by heavy industry: steel, autos, appliances, aluminum, coal mining and oil production, among others. But Bell showed that the industrial sector was rapidly being overtaken by services — retailing, health care, travel, education, entertainment (including eating out), banking and other services.
The consequences of this upheaval would be many, Bell said. The record of scholars — or anyone else — in divining the future is dismal. But Bell is the exception; many of his predictions have actually come to pass. Among them:
Services would continue to expand their share of the economic pie. True. They now represent almost two-thirds of the economy, up from about half in the early 1970s.
The problem with looking at things that way is how horribly slanted it is. Consider the graph at the top of the page. Let me interpret it for you.
In real terms we’re producing more agricultural goods than ever and more manufactured goods than ever and both have maintained roughly the same share of the economy over the period of the last 70 years. In what sense are we “post-agricultural” or “post-industrial”? Only in the sense that we’re producing more agricultural goods with something between a third and a half as many workers as we did in 1950 and more manufactured goods with slightly over half the workers we did in 1950 while the number of people in the services sectors of the economy, particularly health care and education, continues to rise.
Millions of people continue to work in agriculture and millions in manufacturing. They’re both still important sectors of the economy from the standpoint of employment.
What does all of this “post-” talk mean? I think it means that people in the services sector are desperate to believe that they are on the “commanding heights of the economy” as Lenin put it. Perhaps the question we should consider is how many people would be employed in the services sector if we weren’t subsidizing it so ferociously?
My point here is not that services is not where job growth is. That’s obvious. It’s that we have and must have a diverse economy. We still farm. We still manufacture.
A topic near and dear to my heart. We continue to invest only in manufacturing, and continue to create jobs there. But its hard not to create jobs when you go into a deal seeking to double or triple profit primarily through growth. The recent post on regulations was interesting. What do people thing a manufacturing firm is going to do when regulatory costs increase? Labor cost reduction.
As for services. They are notoriously difficult to realize productivity increases. There are only so many haircuts a stylist can do in a day. Only so many dinners served. Only so many hotel guests checked in. I cant speak to, say, the check-in procedures for airlines. Odd.
And yes, the subsidy of services, particularly health care and education, is a travesty. But lets not forget banks, sugar………