On Wed, Jul 23, 2003 at 10:32:30PM -0400, John Pedersen wrote:
>
> >>However, "service" is NOT a "wealth creating" industry. As
> >>necessary as it may be to sell insurance, or write programs, or
> >>make hamburgers, or give haircuts or paint fingernails, it DOES NOT
> >> create anything of value, in the "big picture".
> >>
> >
> >
> >I'm not sure where you come up with this evaluation of what
> >constitutes "things of value". Anything is of value if people are
> >willing to pay for it. Even if it's something like kisses at the
> >kissing booth at the state fair. Things that you can hold in your
> >hand or drive around aren't the only things "of value". Even piece of
> > mind can be "of value" if people are willing to pay for it.
> >Doctoring is a service which creates wealth for doctors.
> >
>
> I was somewhat imprecise in my wording--sorry.
>
> The premise of the discussion was global, right? To prosper, I maintain
> that it is necessary to increase our net wealth, and trade for goods,
> etc. When your doctor cures your illness, we're all very happy for you, but
> nationally, the net wealth of the nation is unchanged. You simply
> transfered some money from your bank to his bank. I get a haircut, same
> thing. Your wife gets her nails done. Same thing. That is what a "service
> economy" does for you.
>
Well, I suppose, if you want to frame it that way. But using that
scenario, I don't see that manufacturing a table increases wealth,
unless you do send it overseas.
But if my dentist takes porcelain, plastic and other raw materials, and
makes me a mouth full of crowns, he's brought something into existence
that didn't exist before. And if it improves my self-confidence, I may
go out and get a better job just because of it. I increased his wealth
and he increased my wealth, though not in a global context. And a
dentist is really a service provider, not a manufacturer.
Your measure of "value" seems to proceed from the assumption that only
an object can have true value. My measure of "value" is governed by the
willingness of someone to pay for something, whether it's an object or a
service. "Wealth" in this context is nearly synomymous with "value". I
don't see any way to reconcile these two views.
Now, if you want to frame _my_ definition of value or wealth in a global
context, then wealth and value could be created by delivering services
across national borders, just like shipping tables over there. I don't
know to what extent the US delivers services globally, so I can't say
how it measures up. And I imagine the delivery of services overseas is
probably a lot harder to track than tables.
As for trade deficit, I confess it's always been a mystery to me why
this is important. I don't see why it's important to keep this in
balance, in the broad scheme of things. I would imagine, for example,
that Japan has a huge trade surplus-- that is, they import much less
(value) than they export. And yet, until recently, they had one of the
most tremendous economies in the world. And I kinda doubt that the fall
of their economy is caused directly by their trade deficits.
<snip>
> Right now, we get our Tivos and shoes and DVD players by trading for paper.
> The paper has value simply because we say so, and because other
> people (globally) are willing to accept it.
>
> Can we continue indefinitely to print and print and print and the world
> will continue to happily accept this paper? Gee, that would be nice. In
> that case, why are we even worrying about this silly "jobs" issue?
Well, sure they'll accept it, until they decide they like someone else's
paper better. I must say, their paper is more colorful. ;-}
But money is just a replacement for barter. It could be anyone's paper.
It doesn't have value because _we_ say so. It has value because they
_believe_ it has value. Ergo, they will accept it. It represents what
_they_ believe they can buy with it. If we suddenly double the supply of
greenbacks, the world economy will adjust things so that it will only
buy half as much stuff, in the belief of people who accept greenbacks.
Of course, printing more or less paper is a crappy way of dealing with
an economy, and has no long term future.
Paul
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