You’ve probably often heard that the United States is transforming from a Manufacturing Economy to a Service Economy, and that is OK! What a bunch of crap.
(See: https://dannesrepossessions.wordpress.com/2013/05/17/what-wealth-is/ for a discussion on some of the concepts in this post.)
If everyone in our new Service Economy now works at a Service Job, who exactly are we Servicing? If no one is actually creating any wealth, then what Wealth are the Service Businesses trading? Let me give you an example.
Many of you have been to a Home Depot. Inside the exit or entrance often there is a Hot Dog stand. This Hot Dog Stand is a service business. They serve customers or employees of Home Depot with good hot dogs. Very few seek out the Hot Dog stand and ignore the Home Depot itself.
But we are in a Service Economy now! So let’s transform the Home Depot into Hot Dog Depot. We’ll be fine with a Service Economy, right? Now there is no place to get home building supplies, but there’s two Hot Dog joints right next to each other! The people that work at the original hot dog joint no longer have the foot traffic of people going from the parking lot to Home Depot buying hot dogs. And now the big warehouse just sells hot dogs, too!
How many people would go out of their way to visit a large Hot Dog Stand? Or even two Hot Dog Stands? Who is going to pay for all these hot dogs? Where is all the money going to come from to pay for the hot dog employees?
After that, where is the money going to come from to buy something that isn’t a hot dog? These people are now in a Service Economy, offering services to people who don’t have any money, and don’t need or want that many hot dogs. And if they ever need building supplies, they now have to look outside of the Service Economy (i.e. The United States) to buy it. So any and all money that would be used to buy services is suddenly going elsewhere.
It is no coincidence that we see cities die when their manufacturing leaves. If a service economy is OK, then why isn’t Detroit booming? Why aren’t the dozens and dozens of steel towns across the United States booming after the rug got pulled out from under them after WW2?
A service economy is akin to trying to fill a bucket with a hole in the bottom at a rate slower than it’s leaking out. Eventually the whole thing will be empty and any water you try to pour in will go through the hole at the bottom without ever touching the bucket.
Anyone who tries to sell you on a “Service Economy” is either, A.) Not smart enough to understand or mentally plot out the consequences, or B.) Does know better but is trying to accomplish something more sinister.