An inevitable question as we look at the demise of the 20th century economy is how shall we live? As the manufacturing that remains to us becomes more automated, reducing employment even as output climbs; as agriculture continues to need fewer hands; as outsourcing and technological change sweep through the knowledge guilds and the learned professions; and as government downsizing decimates the serried ranks of the bureaucrats and postal workers — what jobs will be left? What will we eat and what will we wear when few if any of us make stuff anymore?
These are natural questions and for millions of Americans they are pressing personal ones. The answers to them will do much to shape the economic structure of the 21st century and that, in turn, will heavily influence the way we re-conceive the American Dream.
At one level, the answers are easy. We aren’t going to starve in the 21st century. Au contraire. We will be drowning in freedom and wealth the likes of which humanity has never seen. Just as welfare recipients today in some respects live better than duchesses and dukes in 18th and 19th century Europe, so can the children and grandchildren of today’s millennials look forward to lives better and richer than anything their parents knew. Jobs are disappearing in manufacturing and the learned professions for the same reason they disappeared from agriculture 100 years ago: productivity is rising. Fewer hands were needed back then to produce the food we ate; fewer hands are needed today to make all the cars and cell phones the planet’s consumers care to buy. Fewer humans in green eyeshades are needed to do the world’s accounting; fewer typists, stenographers, clerks and managers are needed to get the world’s clerical work done.
That transition has meant and will mean pain for tens of millions of people. It was a sad day for a family farmer in the 1890s or 1910s when the old place had to be sold; it is a tragic day for an American city when the local factory — the mainstay of the economy and the engine on which the region depends — announces that it is closing its doors. The people who suffer in this change – not just the factory workers, but the city employees whose salaries were paid by taxes that ultimately depend on the local economy, the businesses who depended on the goods and services factory workers used, the auto dealers who enjoyed their custom and the bankers who arranged their mortgages and car loans, the realtors and the insurance agents – have had their lives uprooted. In many cases, they will never again have jobs as secure or incomes as high as those they have lost.
Words can’t do justice to the suffering involved. Like most Americans I have friends and family caught up in these changes. In my time I’ve suffered a few knocks myself as life reshuffled the deck in unexpected ways. Among my friends, my former students and my family, I can count journalists whose careers were derailed by the collapse of old business models, post office workers hit by the layoffs and cutbacks, kids stuck in towns where the jobs have dried up, people who lost their stake in the real estate crash, immigrants who’ve lost the businesses they came here to build, aspiring professionals left with huge student loans but no jobs, and many others.
It’s the pain of these personal setbacks and others like them plus a general sense that the strategies that used to work don’t work anymore that is behind much of the pessimism around us. This is real and it shouldn’t be denied or passed over in silence. But to see where the country as a whole is going, and to develop strategies both for general policy changes and for new personal strategies, we have to look beyond the pain: just as Americans in the last century had to look beyond the collapse of the family farm to see the big picture.
120 years ago, agriculture was in crisis because fewer people were needed to produce the world’s food supply. Today, the middle class is endangered because fewer people are needed to do the world’s routine factory work and information management. In both cases, the economic dislocation and painful change were the side effects of progress rather than the signs of dissolution. The reality last time around was that with fewer hands needed at these routine tasks, more human energy, talent and skill were available to do other things: to produce the goods and services that a more sophisticated and much richer modern industrial society would want and need.
Today we don’t need our whole workforce to provide for the wants of industrial society. Fewer and fewer workers produce all the food, all the factory products and all the basic administrative and technical support the social machine needs in order to carry out the tasks of the industrial age. So what do we do with the rest?
The answer lies in the inexhaustible hunger of human beings for more and better experiences. We could satisfy our biological needs by eating 2500 calories per day of gruel and protein paste, but we prefer something nicer. We want a delicious, attractively presented meal in a well-decorated room to be served to us as we sit on comfortable and stylish furniture. We could cover our nakedness with burlap sacks but again, we want more: design, comfort, style, individualization; we want the rich fancy and play of the mind to be reflected and stimulated by the objects and people around us. We want to thrive and not just survive; we want to play and enjoy.
People do not run out of wants and needs when they have enough food, enough clothing, enough shelter and enough warmth. In fact, liberated from the constraints of the struggle for survival, the human imagination discovers new wants and needs at a faster pace as the old ones are met and forgotten.
This hunger for new, richer and more interesting lives ensures that we can all keep making a living – and it ensures that we will also want to keep working so as to afford all the cool new services and experiences being created around us. As long as humanity keeps wanting, humanity can make a living satisfying wants – and creating new ones.
The expansion of the service and design economy didn’t start in the last twenty years. Coffee, tobacco, sugar and tea became mass market consumer goods as early as the late seventeenth century. Spices and silk – pure luxury goods – had been around for millennia, but the new luxury goods were cheap enough for the masses to enjoy. And they did.
As the industrial and agricultural revolutions made humanity richer, the market for services that are not related to survival steadily grew. Professional sports in the modern sense begin to appear in the 19th century. Today (and I am writing this essay on Superbowl Sunday), people all over the world spend money and time following the ever growing world of professional and amateur sport.
There were very few dance studios in 19th century New York; there were many more in the 20th century – and there will be more still in the 21st. The Rockefellers and the Vanderbilts might have had people who planned and catered their weddings in 1910; wedding planners are much more common now. Upper crust brides in the 19th and 20th century wore individually designed gowns at their weddings; in the 21st century the custom designed bridal gown will become the birthright of every American girl.
In the 19th century few women made regular visits to a beauty parlor and most made their own clothes. In the 20th century even low income women had their hair done. In the 21st century, women (and the men who want it) will have individually designed and selected wardrobes, personalized styling, custom makeup and other frills and furbelows that a mere male from the 20th century cannot even imagine.
In the 19th century the average American ate more food than almost any other person on the planet as measured by caloric intake, but many suffered vitamin and mineral deficiencies due to limited diets. In the 20th century the quality and variety of food greatly increased; Americans ate more meals in restaurants and their restaurants kept getting better. In the 21st century our food will be better still: more hygienically grown, fresher, more nourishing, more attractively presented, incorporating wider varieties of flavoring and so forth.
In the 19th century, older people generally lived with their descendants, did what work they could until they could work no more, and had no particular recreation or health care services dedicated just to them. In the 20th century, fueled by Social Security and other programs, more and more of the old folks embraced a senior lifestyle: retirement communities, leisure activities, health care by those who specialized in treating the elderly, and so forth. In the 21st century the living, recreation and health care opportunities for the elderly will dramatically expand once again — even if we have to restructure some of the programs that make that possible.
In the 19th century, only a handful of Americans went to college, and those who did rarely spent a lot of time trying to decide which college to attend, much less a lot of time trying to get accepted. Those who went to college at all either followed family tradition, or attended a nearby public or private institution, or attended a college run by the religious denomination to which they belonged. The industry we have today of examinations, interviews, counseling, preparation for exams and interviews, college visits, rating systems and so on simply did not exist.
In the 21st century the type and number of educational services and service providers will likely increase. Some will be for training and vocational purposes; others will be for more strictly liberal and educational courses. The relationship between professor and university and student and university will change, perhaps profoundly. More resources will be spent on identifying the right educational choices for individual students, not just at the traditional end of high school enrollment, but throughout life. People will be training and retraining for new jobs, skills and capabilities; today’s admission and counseling industry will change, but it will also likely grow. Kids in the next generation are likely to have much more personalized counseling and parents in the middle and even lower middle income brackets will turn to the kinds of services for rising college and vocational students currently used only by the rich.
In the 19th century American medicine was an informal, home-based system that consumed few resources. Doctors were advisers; the care remained in the hands of relatives and servants (usually without much medical training). Midwives and folk practitioners met the needs of many families, to the extent these were met at all. In the 20th century, American health care broadly defined became the country’s largest service industry, consuming well over a tenth of national GDP by century’s end. Hospitals and other medical facilities were often the growth centers for major cities and towns, the anchor businesses that remained when factories and other business moved away.
In the 21st century, American medicine will flourish and change in all kinds of ways. Thanks to the spread of diagnostic machines and smart software, more will be done in the home; families and individuals will have greater control over their own care. But medicine will likely become both much more advanced and much more individual. The care of the sick will be increasingly integrated with holistic care for human beings in all phases of life and health; preventive medicine will expand significantly to become integrated into all phases of life. Costs cannot keep growing at their present rate; otherwise, the entire GDP of the nation would be spent on health care in the not too distant future. But in the broadest sense, health and wellness programs, or personal wellness as it may be called, will continue to grow as part of the economy and as part of American life.
In the 19th century mass entertainment in the US was still in its infancy. In the 20th century investment and employment in the entertainment business exploded, and movie stars, musicians and television personalities became some of the richest people in the country. In the 21st century this business will grow in ways it is hard to imagine or forecast today. Just as video games came out of nowhere to become a major commercial product, other entertainments and art forms will sweep the country and the world.
Retail was also a much less sophisticated business in the 19th century than it later became. Chain stores and department stores got their start when the railroad, telegraph and improved postal service made long distance business (including wiring money) practical on a national scale. Armies of clerks were needed to manage the needs of these new retail behemoths, but the amount of choice facing the average consumer was mingy and depressed compared to what we expect today. Advertising was better developed in the US than anywhere else in the world in 1900, and that industry also exploded in the next 100 years. We can expect more of this going forward: as more consumption becomes discretionary, more money will be spent trying to persuade consumers to choose one product or service over others.
The flowering of existing “lifestyle industries” and the birth of new ones will drive the economy of the 21st century. Our society will be able to afford the “diversion” of so many workers into “unproductive” service jobs because our basic material needs will be met by so little labor that there will be plenty of hands and brains ready and willing to take up new occupations.
For some, this point is hard to grasp. It’s common to hear people argue that if Americans aren’t “making stuff” anymore, the economy must fail. This is the modern equivalent of the physiocratic fallacy in 18th century France and the populist fallacy in 19th century America. Those groups shared the idea that it was the makers of food – the ultimate “stuff” – who created real value; every other economic activity was in some way a parasite on the sturdy farmers and yeomen who fed us all.
It is true enough in its way; if there is nothing to eat the nation’s wedding planners are going to have a hard time. But the “food fundamentalists” missed the big productivity point: if it takes fewer and fewer people to grow the food we all need, the non-food sector of the economy can, should, and even must grow.
Now that manufacturing is being transformed by the same forces that revolutionized the agricultural business, we have to face a similar set of facts. Making “stuff” may still be the basis of everything else, the foundation of the whole economy, but fewer and fewer people are required to make manufactured goods the world wants, and our future needs will have less to do with stuff and more to do with arrangement, delivery, intelligence, capability and design. And a lot of our economy won’t be about making things at all; it will be about enjoying the freedom that comes when less and less of life revolves around getting the necessities.
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.
This new service economy isn’t going to be just for the unskilled or the clueless. The learned guilds are being restructured and in some cases downsized as dramatically as factories. Accountants, lawyers, middle managers and many other professionals will be launching new and more entrepreneurial careers. Many young people who would have entered these professions – and have the intelligence to do so – will be looking for other ways to make a living. That energy, creativity and drive will go into the development of new services and new businesses that will change the world and create opportunities in ways that we cannot possibly anticipate in advance. Living in a world in which rapid advances in IT and relatively low costs create major new possibilities in almost every field of endeavor known to man, these new generations of driven smart people will make one breakthrough after another, and invent new services and products so astonishing that we can’t now imagine them – and so useful that future generations won’t be able to understand how we ever lived without them.Roland Bainton, a very great student of Christian history and theology, used to speak beautifully about the way people learned to open themselves to the changes God had in mind for them, and about the special kind of courage they needed to do that. He would encourage his students to think about something Martin Luther once said: “Christ is my bee. He comes not to sting me; he comes to bring me honey.”The new, post-blue social model is a little like that. It’s about making life better and richer, not harsher and worse. It is an upgrade, not a comeuppance. It comes not to sting us, it comes to bring us honey and as we learn to open ourselves to it and adjust ourselves and our institutions to its needs, we will come to love it more and more.