What was the problem? The core problem was that productivity had grown and production had increased to the point where the demand for goods was "satisfied", resulting in a dwindling need for both manpower and investment in the whole industrial sector. It created a "Global Glut" condition, after more than a century of expansion, and a "Fight or Flight" situation for which there was no precedent. Fight or Flight, but at the moment of decision it seemed evident that manpower could not fight to remain in the industrial sector, while wealth could not flee out of it.

Manpower definitely could not fight; men cannot compete with machines in tasks that machines can do. It had been said seriously that "a bulldozer could be replaced by one-hundred strong men with shovels" and, in jest, that they could be replaced also by ten-thousand children with teaspoons! This however was not the way to build better houses and roads, nor to maintain our standard of living; employers who followed that course would not remain in business and governments which followed that policy would not remain in power.

Should we try and globally withdraw from machines towards labour-intensive production methods, we would simply work more to produce whatever we need and bring down our standard of living to the lower level of past ages. Even to slow down the introduction of labour-saving devices that seem "too expensive" is a precarious position. Work is the final standard by which the value of a product is judged and we know that the price of labour will, sooner or later, rise enough to justify the introduction of all such devices. As we said before, the jobs the State might try and create in the industrial sector would be fantastic multipliers of jobs... for machines.

It was safe to assume that jobs for humans, in the industrial sector, were not coming back. Manpower would have to flee. It would have to flee to sectors where machines could not follow, preferably to do something for which there was a demand; the worker in production would become the worker in services, which was exactly what the reluctant consumer had in mind.

Wealth, welfare and services

Services? We often hear references to goods, to manufactured goods, to the "secondary sector" which regroups industries producing goods, as opposed to the "tertiary sector" producing services. What is meant exactly by goods and services? Goods are things, objects, they have a material substratum and you can touch them; they have some durability in the physical universe and, therefore, can be accumulated: the accumulation of goods is called wealth.

All things though are not "goods"; few people bother to accumulate pebbles, and we have to fine people to make them collect their empties. Things become goods only when you can extract from them, somehow, "something" that will improve your situation, change you, make you feel better. You may, for instance, eat a thing called food and be fed; cover yourself up with things called clothes and be dressed; things become goods when they serve a purpose and contribute to your welfare.

Services is the name we give to actual contributions to our welfare. It is possible to obtain services from things, and it is the services that we obtain from things that have us look to them as goods and make them attractive. Wealth's most obvious target is to provide the one with wealth with goods from which he draws the services he requires. "Services", to be what he wants to be, to do what he wants to do, and to feel great. It is precisely because it is an efficient mean of Welfare that Wealth became the privileged instrument of power and of positive reinforcement.

There are other ways to attain welfare, though, and other services can be obtained than those vested in goods. Services are basically immaterial, intangible, and exist only in relation to the recipient; so, people also can provide services: you can take me from here to there, cure my illness, teach me, love me... These are clearly even more direct contributions to my welfare: services.

The services we derive from goods are very specific and it is up to us to make the best of them; things may be re-arranged to hold the promise of more services, and this is what "work" is all about: we add to the value "in services" of things, at a cost in work that adds to their price. But work and try as we may, things remain passive and will serve only to satisfy a very narrow range of needs. Goods have little versatility, which is why we need money; to exchange goods one for another and gain access to a wider range of services.

For the satisfaction of our basic needs, we are quite happy to deal with "things" and to take advantage of their passivity; when I need to fix a nail, I want a hammer, not an argument! Whenever we have more complex needs, though, when we face problems for which we do not hold the solution or when something unusual happens, the very specific services hidden in goods prove insufficient and it may be necessary to call upon the most versatile and active of agents: another human being. Only then, can the user trust that his satisfaction and welfare will improve beyond what he himself expected, planned or imagined.

The not-so-ubiquitous machines could do nothing to increase the availability of these services that only human intervention could provide; so, it was a foregone conclusion that the price of services would increase with mechanization. Services would become the scarce commodity of the Industrial Era and appear more exclusive, they would become the new privilege of the real rich..., while goods would become cheaper, easier to get and a little vulgar.

Since the machines would make us all rich - but rich only in what machines could produce - we would all feel richer more quickly if we agreed to think of wealth, well-being and welfare only in terms of "the possession of what machines could produce".

Substitution... and back

We certainly sought to achieve a consensus on that somewhat biased definition. For decades, a tendency prevailed not only to replace hand-made things by machine-made things whenever it was possible, but also - as the difference in price grew between goods and services - to substitute for needs that had been traditionally fulfilled by human labour, needs that would be satisfied by machines, or through the use of machine-made goods. A good illustration of this was the substitution of personal servants by machines and appliances, from kitchen ranges to lawn mowers. Appliances did not offer the same services as personal servants, but they were so much cheaper that people agreed to the change and "made do".

It became much cheaper also to buy a radio set than to hire a musician ... It was substitution, not replacement, but it had to do; as people accepted substitution, the gap in prices widened still more between goods and services, widened to the point where it became not only more expensive to hire a musician than to buy a radio set, but more expensive to hire a musician now, in terms of relative standards of living, than it had been to hire one in the time of Mozart! Services, it seemed, had grown "un-affordable".

Actually, it was an illusion. Services couldn't be afforded by who? Before the industrial revolution, a majority of the people did not have personal servants, and most people did not hire Mozart, or any other musician. After the Industrial Revolution, more people than ever could have afforded to hire personal servants if they had wanted to. They did not, because they felt that what the machines had to offer for the money was so much more attractive.

In fact, the "higher price of services" was merely the other side of a coin that also read "higher value of work" and happened to be a blessing for most people. It is because substitution had taken place between men and machines and had increased the value of labour and services, that even musicians, now, could buy radio sets, cars and the like... and even, once in a while, hire other musicians.

It was a good thing that the services had grown "un-affordable". The rich and wealthy were paying more money for services, and provided better wages for the less well-to-do, while these could concentrate on the acquisition, not of services, but of the goods that would most immediately improve their material standard of living. A wise choice...

A wise choice, because we must remember that, in the l9th century, it was not clear whether education was really such a big help to improve one's immediate well-being, that culture, then as always, was mostly a matter of opinion, and that there was nothing much to medicine before Pasteur; in fact, many believe that it was still 5-to-4 in favour of faith-healing until quite late in the 20th Century. When it happened, substitution, was the smart social decision.

But things changed... The day came, at last, when physicians could really cure their patients, when more leisure gave some meaning to such things as "culture" and "entertainment for the masses", and when education began to appear as a prerequisite for personal development and social up-manship. Machines had provided him with a lot of goods, and now that he was replete with the kind of "low" passive services that goods could offer to satisfy his basic necessities, the reluctant consumer began to wish for something else. It was quite natural and perfectly legitimate: people who attain their objectives must identify new targets, lest they stop, stagnate and die.

Looking for what he now referred to simply, for short, as "services", the consumer realized how, in some aspects of his welfare, industrialization had left him as poor as ever. He was poor as ever in what machines could not produce. Poorer, it seemed, since the price of every thing hand-made had increased in comparison to the price of things machine-made, and most of all the price of services, since they consist of pure work, have no material substratum, and are the equivalent of "l00% hand-made" objects. Never mind the "high price of services", the reluctant consumer was satisfied with his wealth in "goods" - to a point - and now wanted to satisfy his broadening vision of welfare and to obtain the versatile, imaginative services that only men, not machines, could offer.

He wanted to substitute back to services, and the first naive reaction would lead us to think that the consumer's wish should have led to a huge demand for labour. Not so, for the way the consumer saw it intuitively, in his fantasy, "services" meant something more than simply what machines could not do. He was not asking for personal servants to be back, nor for more hot-dogs stands operators and window-cleaners. There was in his mind a distorted image of this Prestige Barrier to which we referred earlier, and the services he wanted stood above this barrier.

Above the barrier stood high services. "High" services required brains rather than brawns, and logic more than creativity, unless it was the kind of creativity that would bring instant fame and money overnight. High services catered to some "important" needs and made use of arcane knowledge that he himself, the average consumer, did not have. High services were performed by "high" professionals who earned more money, preferably much more money, than he himself, the consumer, did.

In short, high services were not only above what any machine could do, they were above what the average consumer himself felt he could do! That's the kind of services he wanted, and what did not fit these criteria was perceived by him as "low" services, meaning that if it was not done by machines it was probably because it was below the attention of machines. For a number of reasons, this consumer's demand for high services was quite a tall order. Too tall to generate employment.

The tall order

The first reason it was a tall order was that the consumer had been accustomed to bask in an orgy of goods made by machines and was looking for the same affluence in the field of services: he wanted plenty of high services, he wanted them cheap, and he wanted them fast. Because, however, by very definition, we would not be able to rely on machines in this field of high services, we could expect none of these spectacular productivity gains which had increased collective wealth in the field of industrial production. It could have been learned by rote like a religious incantation: "There are no machines out of the realm of Machine".

If we could not use machines to mass-produce something, there was no way we would have a lot of that "something", unless we simply assigned more efforts to their production and worked harder. This was definitely not what the consumer had in mind when he thought of "plenty". Yet, it was obvious that without machines as "multipliers", it would take the same time as always to teach a child, to play music or to mend bones. High services had to be performed one-by-one, so there was no reason for us suddenly to become any richer in high services than we had been one hundred, or five thousand years ago.

To understand the second reason it was a tall order, try the following experiment. Stand up in front of a sizeable group of people and state: "It is my definite opinion, that half the people in this room are below average". Then, try to explain that it is not derogatory, that the more normal a population, the more likely there is going to be about half the people above, and half the people below "average". Try, and good luck! What people were consciously or unconsciously asking for then, was not only to receive high services, but also all to be trained to provide high services. The way they defined high services, however, it meant not only a collective boost of their status, but a bootstrap operation for themselves or their children that would allow them all to be above average, which of course was a mathematical impossibility.

"High services now" was impossible. What was feasible was to educate and train more high professionals and to provide more of the services that the people wanted, but it would take a long time to reach affluence in terms of services. "Cheap" also was impossible; services would demand a constant, rather than a steadily decreasing input of human labour. Services would be "work-costly" and would seem very expensive, unless the people could really picture not their neighbors but themselves, working for cheap wages providing services.

Which led to another question. Did the people want services that much? It would not be as easy to calculate the impact of services on welfare as it had been to calculate the impact of goods on collective wealth. How much were people really ready to pay in work for such intangibles as the "quality of life", "better health", "culture"...? Would they accept to pay the price, or would they balk if they were not given instantly the equivalent of Global Glut in the field of services, which was a total impossibility?

What if people were not serious about it? What if people were merely attracted by scarcity itself? If consumers were eager to have high services merely because these were not commonplace and vulgar but were the privilege of the rich, and merely because industrial society had not been able to fit them in Santa Claus' big bag for general distribution to everybody, then planners had to be very careful. Great efforts might be spent with no other result but to transform "high" services into "low" services in the mind of consumers, the minute they would become cheap, plentiful and easy to get.

Imagine yourself as a young peasant of the Renaissance, looking at the work of Leonardo Da Vinci and praying to God that you, His humble servant, be granted the talent to paint, just once, like the master, a likeness of your beloved one, a work that you would cherish eternally in memory of her beauty. How precious the gift if it would be granted! How rich you would feel if you could hold the picture in your hands ... Now, teleport to the bus depot in New York City, and imagine yourself telling your girl friend that you are not going to spend another buck, nor lose another minute of your time, for a set of badly framed, badly exposed pictures out of a machine. How is it that a "likeness of your beloved one" now has so little value unless it has at least the Grand Canyon as a background? Cheap, plentiful and easy to get, isn't it?

There were some modern precedents for this kind of zany behavior, as wonders and miracles like penicillin, had been received with polite thanks, while people kept raving about free dental care although - or because - it could put the nation in bankruptcy. What about free public education, that had been hailed as a landmark by all, after which nearly everybody who could afford it had sent their children to private schools. Transition from the production of goods to the production of high services would be a major step in evolution. Were people really serious?

Fighting on the line

Last but not least, if the unsatisfied demand of society was now for services that could not be performed by machines - and that did not really need machines to be performed - how would wealth keep growing and how would the power structure be maintained? Wealth - (or call it money, investment, capital...) - simply could not flee. Where would it go? A society based on the machine-production of goods offers no alternative for wealth but to be directly or indirectly invested in the production of goods. Where else could it be bound to a "multiplier" to generate a surplus for profit?

It might be possible, for a while, just to buy the services of workers and sell them at a profit. Unless outright slavery was imposed, though, it would not go very far. Why would people accept an intermediary? The worker's arm could be twisted to accept exploitation, but what would prevent the client, the buyer of services, from by-passing the investor, if an indispensable element of production - (i.e.: the machine) - was not under the investor's control ? It would be possible, of course, to buy and sell the services of other people, if you could add your own services to theirs, services like management or organization, to justify your intervention and profit. But then, it is these extra services that profit would really pay for... and "wealth" as such would still not have brought a return. It seemed there was no use for substantial "wealth-for-power" unless it could be invested in "machines-as-multipliers".

If this was the case, not only present but even future wealth would have to remain captive as fixed capital in the production sector, if it was to keep its status as a symbol of power. Collective wealth, however, would grow and become more wealth. What would be done with the extra wealth, now that demand for what machines could produce had stabilized, that each investment increased productivity and brought to all products more quality and more durability... which caused demand to decrease even more? Wealth could not flee, it had to fight; but it had very little to fight with...

Planners were faced with a Global Glut of goods on one hand and, on the other hand, a huge demand for high services, a "tall order" that it would be quite touchy to handle, since a demand for something that top-dogs and wealth could not deliver was only marginally better, for the structure of society, than no demand at all. Actually, the consumer's fantasy led to a huge demand for a mythical labour force which did not exist and, as the demand for industrial goods would not keep up with increased production potential, to very real unemployment.

What then would be the solution ? If the consumer wanted services, a society based on positive reinforcement could not but oblige him; but the transition to some White-Shirt Promised Land would be fraught with perils. Manpower would have to flee from industrial production right now, so workers might as well move into some sort of "services", but this could not mean immediately the glamorous jobs that the consumer had dreamed in his fantasy. A period of transition would be required.

Transition could be achieved with a minimum of pains and disorder only if, even though their value might become more and more symbolic, the credibility of work and wealth could be maintained during a long march in a paradoxical desert of Plenty before high services were available. To maintain this credibility, it would be necessary to define new objectives whose realization would still imply a joint commitment of both wealth and work. Only thus could we preserve the power structure, the social order and the principle of positive reinforcement. It would have to be a well-planned strategy.


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