[Pops]

So stocking shelves, polishing nails and selling insurance is now 70% of the global economy and 45% of employment according to Bloomberg.

My question is simple, where does the money come from to pay the barber and the travel agent and cell phone bill?

Does "lowering yer ears" add something of value to the economy the same way cutting a log or making a chair does?

I really don't get this because it seems to me that going to a restaurant is a way to "spend" value, whereas building a widget or growing a crop is a way to "make" value. Services are intangibles you pay for when you've "made" some money making something tangible.

Look at this plot of output:




Back at the time FFs began to take off there was some sort of balance between Ag (includes farming/fishing) and making stuff (inc. extracting/mining/construction). Services at the time were an equal part of the economy - Ag and extractive/manufacturing industry created things and spent a portion of the profit on getting a shave and/or going to the cafe. Service were a smaller share of the economy back then because most folks were unable to pay someone else to do the dishes.

As time went by and ag and building/extracting work is replaced by automation and then automation is replaced by automation, both sectors where value is created decline but the "spending" sector continues to increase!

Where does the value that pays for those services come from now?

[diemos]

The energy slaves produce most of the wealth that we enjoy.

Most "jobs" these days are make work to:
1) Keep the peons occupied and out of trouble
2) Give society an excuse to give them enough of a share of the energy slaves output to keep them quiet.

Most "jobs" these days are net consumers of wealth, not producers.

It's amazing how much we resemble the roman republic at it's height. In Rome the aristocrats owned all the resources. The slaves did all the work. And what was left for the hoi polloi was ... nothing ... except bread and circuses, make work public works and the military.

[sunweb]

Pops- I have never understood some of the inane jobs out there. Too much wealth?
A friend of my works at one of the big ski resorts in Colorado. Every year, but I guess especially this year, they are making snow. We do the same here in Minnesota. If they didn’t make snow, which to me is the height of arrogance and waste of energy and misuse of water, the job losses would be huge. Not just at the ski resort, but job losses would resound throughout the community and down the mountain.

A dear friend is an interior designer. Enough said.

I have written about this here.
http://sunweber.blogspot.com/2012/02/get-job.html

[dinopello]

I think we've become so efficient at supplying the basic needs (and luxury items for that matter) of everyone we simply do not need more makers. The "economy" can have value added to it by mechanisms that facilitate the flow/movement of stored wealth which is what the service sector provides most efficiently. There is no economy without the flow.

A very small percentage of people have a large amount of the stored wealth locked up tight. I'm talking about the top 10% or more, not just billionaires. They want Chef Adolfo to make them a tasty meal served by Suzi the waitress along with an imported Beaujolais brought over by Renaldo the container ship captain. They don't need more chairs.

Either the economy has to "naturally" provide the mechanisms that will get the 10% to flow capital into it or the government must take the capital from the 10% to disburse into the economy through government initiated (maker) projects (infrastructure, defense) or direct welfare payments.

Here's how we get the capital flowing in my neighborhood

[Plantagenet]

My question is simple, where does the money come from to pay the barber and the travel agent and cell phone bill?....Where does the value that pays for those services come from now?

Everything is priced according to its value. The value of food, Oil, shoes, bicycles, cars, haircuts, plane tickets and cell phone bills are all set by the market.

This process was first described by Adam Smith in the 18th century.


Adam Smith

[Quinny]

The problem with the market is instead of on person one vote its one dollar one vote. When the .1% control all the votes they control the market.

My question is simple, where does the money come from to pay the barber and the travel agent and cell phone bill?....Where does the value that pays for those services come from now?

Everything is priced according to its value. The value of food, Oil, shoes, bicycles, cars, haircuts, plane tickets and cell phone bills are all set by the market.

This process was first described by Adam Smith in the 18th century.


Adam Smith

[Pops]

The energy slaves produce most of the wealth that we enjoy.

Check.

You might even call them Energy Scabs because they broke the back of the workers by undercutting them so completely the workers could not compete. Energy slaves gave a 100:1 energy return on investment! I don't know the return that a human slave provides even on starvation rations but I'm thinking it isn't nearly that good.

Energy scabs took the place of not only the 40% who were the farming and fishing ag "makers" in the 19th century, they took the place of a good portion of the other 40% who became the manufacturing/extracting makers by the mid-twentieth century.

So the upshot is the whole hand-wringing bit about the loss of the "middle class" and inequality and falling worker participation amounts to what? Not luddism; luddites hate technology because it eliminates the need for the skilled worker permanently. But no matter how many times we stoop and grovel at the totem of technology it isn't tech that has made more and more of us dishwashers. It is the Energy Scabs that replaced us through brute force.

Take away the brute force of that virtually free workforce and watch the technology temple come crashing down.

[Plantagenet]

Take away the brute force of that virtually free workforce and watch the technology temple come crashing down.

Or perhaps we are watching technology come up with new ever more inventive and efficient ways to harness and distribute and conserve and use the energy slaves so that the temple can be built even higher.

I've got my popcorn ready to watch how this show turns out.

[basil_hayden]

Part of the service sector is your basic lawn/landscaping or pool service.
This type of work is indeed slowly replaced over time technologically by more efficient machines powered by Energy Scabs.

But part of the service sector is also professional services like engineering firms. As more and more regulations to comply with crop up, and more extreme design and build projects are necessary, this drives both technology and services.

Complexity collapses eventually, I 'magine.

[Newfie]

If I recall correctly Rand had one of her heroes (Atlas Shrugged?) put forth a monologue on the value of a man, which is we hat he produces. It made sense to me the, and it does now. I don't want to get into a Rand argument or branded, I read her differently than most.

I believe that we have a minority of the population who creates the wealth. I'm not one of them, few of us here are. The rest of us just pass it around taking a cut here and there.

Bertrand Russel noted as far back as 1933 (In Praise of Idleness) that we are sufficiently efficient to have a greatly reduce work week. The situation has become only more extreme.

So why do we have so many seemingly idiotic jobs?

It is because it is our genetic nature as eusocial (http://en.wikipedia.org/wiki/Eusociality) animals have an innate need to work and contribute to the hive. Barring meaningful contributions we invent psudo-employment so that the workers can feel good about themselves.

It is a major problem with our modern society for it is what gives rise to consumerism. It is the problem consumerism "fixes."

We like to think we can retire early and have a life of leisure, but it's not what we really want. We want to think we are active and necessary parts of the community.

That's a hard lesson.

[Narz]

Service jobs are the future. Stuff, stuff & more stuff is not sustainable.

Service jobs are the only jobs I respect. Besides those creating the basics (food, clothing, shelter & maintaining the internet & it's hardware components )

The question, "where does the value come from?" makes no sense. Obviously those buying the services detirmine it's value. That's the definition of value. What people are willing to pay for.

This seems like just another Pops - "Nothing is worth anything except growing food & chopping wood" type luddite threads.

We should be celebrating a service economy where not everyone has to break their back in the mud. But instead we're whining about it. I don't get it.

[Narz]

If I recall correctly Rand had one of her heroes (Atlas Shrugged?) put forth a monologue on the value of a man, which is we hat he produces. It made sense to me the, and it does now. I don't want to get into a Rand argument or branded, I read her differently than most.

The best things that are produced are not necessarily tangible. What does the cute breakdancer girl or the musician in the subway "produce". Fleeting experiences of enjoyment. Which is more than most businessman do, IMO.

I believe that we have a minority of the population who creates the wealth. I'm not one of them, few of us here are. The rest of us just pass it around taking a cut here and there.

Depends how you define wealth. Perhaps we need a new definition. Is joy wealth?

Bertrand Russel noted as far back as 1933 (In Praise of Idleness) that we are sufficiently efficient to have a greatly reduce work week. The situation has become only more extreme.

Which again, should be celebrated. Some though won't be happy 'til everyone is digging in the soil for turnips...

So why do we have so many seemingly idiotic jobs?

It is because it is our genetic nature as eusocial (http://en.wikipedia.org/wiki/Eusociality) animals have an innate need to work and contribute to the hive. Barring meaningful contributions we invent psudo-employment so that the workers can feel good about themselves.

It is a major problem with our modern society for it is what gives rise to consumerism. It is the problem consumerism "fixes."

We like to think we can retire early and have a life of leisure, but it's not what we really want. We want to think we are active and necessary parts of the community.

That's a hard lesson.

I agree 100%. I feel so much better when I'm working than when I'm not. Being unemployeed makes me feel like less of a man.

I think the solution is have mandatory community service for everyone, not just criminals. Have people engaged within their communities so no one has to feel useless & no one can look down on the un/underemployeed. With all those extra hands helping the right-wingers can pipe down about the useless welfare state because everyone will be contributing whether they like it or not.

[Shaved Monkey]

I agree 100%. I feel so much better when I'm working than when I'm not. Being unemployeed makes me feel like less of a man.

I think the solution is have mandatory community service for everyone, not just criminals. Have people engaged within their communities so no one has to feel useless & no one can look down on the un/underemployeed. With all those extra hands helping the right-wingers can pipe down about the useless welfare state because everyone will be contributing whether they like it or not.

They are trying that in the UK and volunteer groups are protesting and its not helping job seekers find work its just scoring political points .

Thirty voluntary sector organisations, including Oxfam and the Salvation Army, have rightly opted not to participate in the scheme and have responded by launching a new campaign to Keep Volunteering Voluntary.
"Workfare schemes force unemployed people to carry out unpaid work or face benefit sanctions that can cause hardship and destitution," they warn.
"We believe in keeping volunteering voluntary and will not participate in government workfare schemes."

http://www.newstatesman.com/politics/20 ... -jobless-0

[Simon_R]

Isnt it possible that the manufacturing Jobs have been outsourced abroad ?

so basically they are there, but just not being done in your region/country

[Tanada]

Service jobs are the future. Stuff, stuff & more stuff is not sustainable.

Service jobs are the only jobs I respect. Besides those creating the basics (food, clothing, shelter & maintaining the internet & it's hardware components )

The question, "where does the value come from?" makes no sense. Obviously those buying the services detirmine it's value. That's the definition of value. What people are willing to pay for.

This seems like just another Pops - "Nothing is worth anything except growing food & chopping wood" type luddite threads.

We should be celebrating a service economy where not everyone has to break their back in the mud. But instead we're whining about it. I don't get it.

A great many of us do not have the personality required to be good service workers, sucking up to the customers, the customer is always right kind of attitude is hard for independent thinkers to maintain long term. Make no mistake the customer expects the service provide to be prompt, efficient and totally subservient in attitude. When was the last time you gave a slow, careless or grouchy wait person an extra big tip after a meal? That is a microcosm, the same is true of the people who cut lawns or install your new dishwasher. If the guy or gal preforming the work isn't polite and a brown noser all wrapped up in one they risk complaints being made to their supervisor and loss of their job.

[Pops]

My point here is simply that physical value is created by putting labor to raw material and that energy slaves have taken over the burden of that labor. The result is a majority of the human economy is now involved in the spending of value rather than it's creation.

This has always been the source of what makes me uneasy about Limits, peak oil, Olduvai Gorge or just first world society in general: we've actually come to believe that value just happens and that spending it is the key human endeavor. So when the time comes to transition away from cheap energy we'll be completely unprepared, having spent generations spending value not making value.

That is the preparation that's needed, not stocking up on ammo and pork n beans but preparing to transform the economy from spending fossil fueled surplus back to making value.

I worked in a print shop and did construction for a while as a kid but most of my life I've been in the airball end of business; store planning, marketing, graphic design. That's not self-recrimination, simply the recognition of my slot. It's been great fun to be alive at this time, I really like the creative part and the freedom I've had to work as much or as little as I wanted. But I've created nothing of actual value, merely participated in the act selling stuff to people who've likewise created nothing, etc, etc.

Narz wrote:
"Service jobs are the future. Stuff, stuff & more stuff is not sustainable."

The facts are exactly the opposite, which is my entire point: The unsustainable part is the cheap fossil energy that makes stuff of value, allowing us to do graphics and dance in the subway. The service economy that has grown in tandem with fossil fuels and population is an artifact of cheap fossil energy, not some great lasting invention of human ingenuity as economists (a "science" that's grown right along with FFs) would have us believe. How can that be more clear?

"is joy wealth?"
I hate to say it but: LOL

It's easy to be a hippy when you have a trust fund. It's easy to be a slacker when you'll not starve, it's easy to smell the roses when you're not pulling turnips, LOL. This is the perfect example of my point; that people actually believe we need a new metric for wealth because FFs have made tangibles like turnips a given.

The only problem is cheap energy isn't a given.

[Shaved Monkey]

It does suggest when the house of cards falls it will take nearly every job with it.
As nearly every service job relies on someone having a money and no time.
Its a lot harder to get rid of someone who makes something we need even in a downturn,but you will stop getting your pool cleaned ,your lawn mowed, your car detailed,your house cleaned,your shoes shined,your dog walked,your nails manicured,your crack, back and sack waxed almost instantly when you lose your job.

[Pops]

Isnt it possible that the manufacturing Jobs have been outsourced abroad ?

so basically they are there, but just not being done in your region/country

No doubt we exported semi-skilled labor, but the trend to spending value on services is global. Here is China, Primary = ag/mining/forestry; secondary is manufacture and tertiary is services:



Much of the growth even in China is in services since the '90s.

Is that, surprising?

Not really if you understand that globally, cheap fossil fuel has temporarily replaced human labor in primary industry (pulling turnips) rather than some great human invention that eliminated the need for labor forevermore.