America on its way down. Is it?

[August]

Originally Posted by Aramike

I think we've discussed this before in another thread where I had posited that, at some point a quasi-socialist economy may be necessary, and you alluded to my point with this:And I agree that the service industry has value, but my point is that such value expires at the completion of the service.

For example, let's say you build cars. That car is an economic asset for however many years it is capable of being sold. Now, compare that to installing satellite dishes. That installation which was purchased is now worthless to any other user wishing to install something.

My point is that the service industry provides no real sustainable commodity other than the industry itself. The problem with that is ultimately that the service industry is in essence an artificial construct built around catering to convieniences, and in general works the opposite of commodities - the value of service tends to decrease in proportion to the value of actual commodities.

Think computers - as software companies develop more user friendly and stable products, the currently moderately high demand for PC technicians will invariably fall (consider: do you know of any TV repairmen still around?). Also, as the efficiency of manufacturing computer products continues to rise, their cost decreases, working towards making the PC service industry less and less valuable.

Ultimately, technology is determined to meet all of our demands both industrial and services. However, when you produce something through industry, you have an actual THING of value. The service industry does not provide that. Commodities ebb and flow. The ability to produce commodities are always in demand. Services, on the other hand, can be completely outgunned by technology.

Therefore, in a nutshell, ownership becomes the key - if you own the ability to produce products and evolve to produce other products, you have a leg up on the service industry in that it cannot truly own anything other than access to labor (which both industries can have).

I'm trying to simplify this in order to not write out 100 pages of economic theory, so please forgive me if I'm being unclear or ambiguous, but I imagine you get my point.

I get your point but think you underestimate the value of service. Take the satellite dish example that you mentioned. Once the dish is mounted it is there for the use of the next tenant or owner. "Satellite equipped" is a sale point. It goes beyond that though. The professional satellite installation tends not to create the leaks and associated damage often found in homeowner installations.

You call it paying for convenience but I call it paying to have the job done right so it doesn't cost you more down the line.