Post-Industrial America

Post-Industrial America
by
David Schlecht

In a previous post, I expanded on the value-producing aspect of manufacturing. This discussion explains why America needs a manufacturing industry.

But, what happens when the society becomes so wealthy that they no longer need to or are no longer inclined to continue purchasing? They still have the money and want to do something with it, but how many boats do you buy before you get bored buying boats?

So, along comes the service sector to give the buyers something new to buy. I don’t want another boat, I want someone to mow my lawn so I can enjoy the boat I already have. I want to go out to a nice restaurant, I want to see a play, I just have to go see the latest comedy or magic show…

In this case, the service industry is a symbiotic parasite on the society in that it gives back in return for what it takes. It serves a purpose but it also drains valuable resources from the society.  When you no longer have a manufacturing industry, there is no longer any symbiosis and the parasitic service industry begins to impoverish the society.

This is, of course, all academic, since America is not anywhere near the point where we no longer need anything. America needs plenty. Have you seen the condition of our roads? Or Bridges? Our Internet? Our cell phone infrastructure? We need plenty of manufactured products.

As long as we’re manufacturing what we need and have a little left over to export, then our society remains strong. When we no longer manufacture, then eventually there will be no one left to buy the services from the service industry.

I suppose we’ve all heard the argument that making hamburgers at the local fastfood shop is adding value to the meat so it’s really manufacturing.

This is an awfully weak argument but we can’t dismiss it out of hand. There is some value, but the value is lost the moment the product is consumed. This stems from the old argument of “guns and butter”. Paying for butter is a short-lived investment, but buying guns gives us the value of the weapon for years to come. This was Reagan’s argument for spending money on Star Wars and not Welfare.

The problem here is that the guns, or bombs will eventually be used and will be gone. In a war, it’s amazing just how fast these inventories can disappear, how fast the wealth can disappear.

America needs to get back to building things that last.

3 thoughts on “Post-Industrial America”

  1. We all need to stop for a minute and really visualize what a country would look like if it didn’t have any new wealth being added to it. It would eventually circle the drain, much like today’s USA is doing.

    We need protectionism in the worst way. We need to get back to protecting our industries and our jobs, like we used to do before Reagan and Clinton.

  2. This is a great post. I like the way you present it and will try to keep the same frame. We cannot ever be a post-industrial America. We have to continue to produce things of value or we will eventually lose all the wealth of our nation.

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