Walter Russell Mead has been writing a lot about the decline of the New Deal model of governance in the US, and I’ve been linking to some of those posts. In his latest series, “Beyond Blue,” he’s been looking at what could succeed the mid-20th-century cooperation of big government, big business, and big labor. The latest post looks how the service economy might develop in a post-industrial economy. Mead may be too optimistic about it, but it’s an interesting contrast to the usual pessimism on this subject:
Many of the dystopian fears about the future that lead people to cling to blue model ideas — and the belief that mass manufacturing employment is the only conceivable model that can provide good living standards — are rooted in this concern that the economy is all about the hard stuff. There are fears that we will transition from a world of well paid steelworkers in secure lifetime jobs to a world of baristas and waiters without money, without respect, and without any kind of security or dignity.
Again, this is pretty much what people thought when the family farm was on the ropes. Without agriculture as the mainstay, America would become a nation of paupers. The dignity and self-reliance of the farmer would be replaced by the dependent, pauperized masses toiling anonymously on the assembly lines. Wages and living standards would precipitously fall; American democracy was at risk, a choir of worried voices proclaimed, as the country split into a small group of capitalist haves and a large group of wage-slave have-nots.
The factory jobs that are now hailed by the nostalgists as bulwarks of working class independence and self respect were once denounced by the farm nostalgists (and the utopian Marxists) as anonymous, soul killing jobs. Outdoor farm work was healthy and life affirming. Factory work was the opposite. Americans wouldn’t just lose their affluence as the farms failed and they moved to the cities, they would lose their dignity and their humanity in the brutal, depersonalized factory environment.
But Americans found pride and dignity in factory work; the blue collar working class found its self confidence, built institutions, organized political movements and effectively defined and fought for its interests.
Much of the work of the 21st century will be in the field of personal service rather than factory work. And at the moment wages for this kind of work are relatively low, as wages in factories were once relatively low. With the old sectors of the economy shedding jobs, there are lots of people chasing all the jobs that open up.
This will change as the new economy grows, as entrepreneurs build new businesses and industries. Indeed the relative cheapness of labor is one of the factors that will help the new sectors grow – just as the cheapness of labor helped manufacturing grow in the past. But market forces will ultimately drive wages up and they are likely to stay that way despite the competition from overseas. Many personal services cannot easily be performed at a distance: your morning frappuccino can’t be made in Guatemala, at least until teleportation technology is ready for prime time.
Some nostalgists talk about the dignity of factory work versus the world of personal service. But is there anything inherently less human or dignified in making and serving coffee than in performing a repetitive movement on a mass production line? Overall, an economy that is based more heavily on people-to-people services will offer more people more fulfilling and fully rounded roles than the old factory system did.
In any case, the new service economy is not just going to be a world of pool boys and pedicurists. It will be a world in which more students get individualized educational counseling from a growing group of education coaches and guides. There will be people who help us manage our technical and information systems: you may have a neighborhood Geek Squad type outfit that not only fixes computers when they go wrong but helps you manage and run all the information-dependent appliances and operations that make your home and life work. More people will work with fitness, nutrition and whole-person health professionals. Many of the services that the very rich enjoy today will be adapted to the needs and the pocketbooks of the middle and lower middle class tomorrow. You may have a life and work coach or agent who helps you manage your ongoing lifetime of learning and recertification as you learn new skills and move into new kinds of work. Many of the consulting services that large companies now have will be available to much smaller enterprises. Busy married couples with two good incomes already live in a cloud of people who help with everything from child care to lawn care; there will be more and more services targeted at this market, and more and more people will earn good livings working with upper income clients who have plenty of money but little time.