Fifteen years ago when I first studied the capitalisation of demand and supply, I was satisfied with the concept that in modern economies the highest share of GDP is from the services sector. Services are usually explained as banking, education, insurance, medicare, security, fitness centre, etc. The intangible goods we consume to make our lives comfortable, content, joyful, etc.
The concept of a modernised service oriented economy is exemplified by economies of the western hemisphere like USA, western Europe which proudly shift the manufacturing to cheaper places like China because they consider themselves too smart to be engaged in such ‘lowly work’, and are better off giving pennies for the production done in the poorer countries while they enjoy their higher standard of living.
This plan can (and did) work in the short term for such ‘developed’ economies but due to the structural handicap put right on the foundation of such a strategy, many of these countries are now facing a depression which has been going on for more than a decade now. They try to, in classic Keynesian terms, “pump-up” their economies by increased government spending but so far we have not seen any success.
So, what is this ‘deep, dark trench’ which is so empty that the whole structure of the service based economies is faulty. This trench can be defined in terms of the ‘quality of human capital’. When I mention these words, most modern economists and business gurus will point out the human capital skills needed to do the job well in these service businesses, but this is only part of the issue and not the significant one. These esteemed advisers to global politicians and businesses have rightly advised that we need an educated, trained and apt force of human beings to be able to complete the assigned tasks in their respective service domains. They, however, forget to note that the basis of existence of all these service industries is also the ‘human capital’ that is being served by these service providers. This means if the consumer is an ‘idiot’ he will consume worthless shit, which means due to the vicious demand scenario the capitalist organisations will pump up such useless services which negatively affect the ‘quality of our human consumers (The real capital)’.
Thus, on an ongoing basis, a shit-in-shit-out paradigm is created and ‘improved’ upon as the time goes on. Is this the reason that we don’t have any real ideas, inventions, discoveries these days? Most of our human capital is hooked to a daily life of mindless existence while themselves unconsciously being the very force in such futile lives. And then they blame the recession for their miseries. It is not the recession in the outside world, but the emptiness within most of our fellow citizens that has created such abundance of (totally curable) miseries that have befallen our times.
PS: People in poorer countries still manufacture their own stuff and thus are gainfully engaged on a certain level. This will also be removed when the production is automatised by robots. But till next few years they will be occupied in their own little mindless work. After that, God help them.
PPS: This blog post is my intellectual property and I assert the right to be identified as the source of the ideas/theory promulgated herein. If you don’t give me the credit I am due, then in the words of the great Liam Neeson from the Taken series “…I will find you, and then, I will kill you.”