End of the Service Economy

We read today that the U.S. Postal Service wants to cut a delivery day. We see a dark trend behind this story. People just don't have the money to pay other people to do stuff for them.

When you're cutting your budget, one of the first things to go usually is eating out, that is, paying someone to cook for you. Then there is cutting entertainment - not paying someone to sing or dance or tell jokes for you. Cutting travel means not paying someone to fly you somewhere and give you an exotic place to sleep. Pretty soon a lot of people are out of a job.

In 1986, an article was entitled Taking in Each Other's Laundry - the Service Economy. A critical expression was thereafter circulated - "We can't get rich doing each other's laundry." In the following years as more and more people earned their living catering to other people's inclinations - it seemed that just maybe everyone could get rich doing each other's laundry, nails, or pet-washing.

Now that the economy is contracting and have less to spend, people are deciding to do their own laundry. This is setting up a feedback cycle of job loss and spending cuts that has a very deep bottom. We expect to see the US economy (among others) de-servicing, if you will, in the years ahead just as it de-manufactured in the 1980s. This process will be very painful and disruptive for many, and a good deal more than most could now imagine.

The Myth of Progress

A notion bandied about, both in the media and in academics, is that of 'progress.' The idea, put simply, is that society will always improve itself. A problem immediately arises: one cannot define 'progress' any further than this. It is even more nebulous than 'globalisation' in meaning, and just as contentious a subject. In order to more clearly define progress, we will give our personal version thereof. Progress is:

An unending and inevitable process, moving the world towards a post-industrialised service economy. Society progresses towards an American-style middle-class lifestyle, and technology becomes both more efficient and less polluting. Progress is widely considered a 'good' thing, both a desirable and positive development.

Before we go further, let us say we consider 'progress' a load of bunk. For example, in the year 1800, the world population was around 1 billion. The vast majority of people then (i.e. 'the poor') were landless peasants. They had houses, they had food, they had beer or wine. The phrase 'poor but decent' comes to mind, in a general sense.

Fast forward to 2001, when 2.4 billion people lived on less than $2 per day. That's over twice as many people alive as in 1800... all completely or nearly destitute. Could you, Reader, live on about $730 per year, have only the clothes on your back (maybe a cinder block hut)? For the record, having less than $2 per day to live on is considered only 'moderate poverty' by the World Bank.

Another bit of 'progress' is the development of nuclear energy. It is argued that developing the power to split the atom was a 'good' thing - a 'good' thing which later acquainted itself with Hiroshima and Nagasaki. Is it a positive development that the planet could be rendered medically sterile several times over by fusion bombs? Even with 'peaceful' nuclear power generation, there is the deadly legacy of the radioactive waste; barrels of lethal crap which will exist for thousands of years to come. Progress?

Clinging to the idea that 'progress' is both a good and necessary thing is foolhardy. To believe that the old ways of doing things (a.k.a. business as usual) were the 'right' ways, is to be a casualty of the 2008 Depression. In the 2008 Depression, as with all past Depressions, one must adapt to the changes brought. For a closing metaphor, consider 'progress' the mirage of an oasis in the desert. One cannot afford to chase mirages; one must seek shelter.