(2010-09-20) Lewis Sustainable Service Economy

Nathan Lewis thinks a Service Economy in an Urban Village (Traditional City) environment is better and more Sustainable living. He notes that while we currently have a hard time thinking-about/measuring/trusting a Service Economy, the same thing happened during the transition from Agricultural Economy to Industrial Economy (Industrial Age).

Previously, I brought up the idea of an economy that is centered on Performing Arts. Performing arts count as "economic activity" just the same as paving parking lots. This was an intentionally whimsical idea to get people to think about what a "service economy" is. A "service economy" is about people doing things for other people, instead of making things for other people. You could imagine an economy which had an enormous output of performing arts. We would spend a lot of our income on watching live performances, several times a week. Consequently, we would have lots of people employed as performers, and in related jobs. We can see that this has practically no resource component. An economy whose output is performing arts doesn't require natural resources, doesn't consume much energy, and doesn't pollute. You could have "growth" in the form of -- not more -- but better performing arts. (Most manufacturing is about more but most services are about better. You can't eat two dinners at once, but you can go to a better restaurant.)

The point is, an "economy" is a pretty flexible idea. It could literally be anything. And, if it is improving -- whatever that means to you -- then that counts as "growth," or at least, Progress... The funny thing is, the U.S. economy is already well along this path. Most of the U.S. economy consists of services. Health care. Education. Legal services. Hotels, hospitality, travel and vacation-related (Education Healthcare And Leisure)... So, you see my "Service Economy" fantasia is not really that weird. It would just be different services. Not so much housing, education, health care, legal and financial services, which often become parasitical burdens of contemporary life, but rather fun and enjoyable services. We could also replace some of the remaining goods with services. Trains instead of automobiles. Less spending on housing and home furnishing.

When I outlined alternatives to Heroic Materialism, I mentioned a "focus on Life Style." I like that term: "lifestyle." It is open-ended. It could be anything. The only important thing is that you like it. You could be a ski instructor, or an artist, or an entrepreneur, or a schoolteacher. These are all different kinds of lifestyles, all with their own attractions. This is very different than the idea of a "Standard Of Living," which is a very Heroic Materialist concept. When we talk about "standard of living," we start to talk about things like automobiles and televisions per capita, square feet per household member, and so forth. All these simple quantitative measures, all with the underlying assumption that More Of The Same is Better. But if we don't like what we have, then what's the point of having more of it? Wouldn't that be worse? I might not like that kind of lifestyle. So, when we think of "economic growth," we can think of an "improving lifestyle."

The process of creating this new, better service economy involves investment... Thus, our "capital investment" in the future could be the process of creating more of what we want, enjoyable services, and the more investment we have, the closer we get to our goal. This capital investment is actually what creates jobs, and in fact higher paying jobs. The great growth economies, such as China today, are typified by enormous amounts of investment. In China's case, this is "modernization" including lots of concrete-pouring and machinery-installing. However, a future "growth economy" focused on mostly nonphysical services could feature lots of investment in other sorts of things. Today, this is typified on the personal level by law or medical school (Professional Education), an investment in education which allows a person to provide high-value services, and thus enjoy a high income. Unfortunately, like our image of concrete-pouring and machinery-installing, this image of law-and-medical school has also been done to death.

In practice, the "service economy" of the sort I envision tends to focus on urban Entertainment-s. Imagine you lived in a no-car Traditional City, in a small and relatively cheap apartment. You aren't being sucked dry by the parasitical doctor/lawyer/financial advisor/professor class. In other words, you have lots of disposable income. What do you spend it on? Typically, you spend it on "going out.".... I'm not necessarily saying this is the best thing. It is, however, the most common thing, in history.