Of pink slips and apples: Problems of the post-industrial economy

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In the Depression, American factories sat closed and idle, but were nonetheless available to be restarted (and re-staffed) when demand for manufactured products picked up, as it eventually did. Today, to be blunt about it, those factories are no longer available to us, since the bulk of our manufacturing has long since been sent overseas.

We know that our economy has changed, structurally, since the 1930s, but don’t understand in our guts how deeply it has changed or what all the consequences are. When in the aftermath of Sept. 11, 2001, President Bush told us to go out and shop at the mall to save the economy, he was on target because our economy had become so intertwined with the retail sector that if we had not continued shopping at the same rate, we would have immediately gone into a recession.

Remember the Depression image of the apple-seller? Well, most of us are apple-sellers now, in good times and in bad. We have become a nation of consumers in which most citizens make their living by selling to one another services and completed goods that have been manufactured or grown elsewhere. Great Britain was once famously described as a nation of shop-keeps. The United States is now best described as a nation of middlemen.

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I have been wrestling with the implications of this great transformation, and while I do not have instant solutions to the problems it has created, currently plaguing us much more than they have in the past — I have some thoughts on the subject that I’ll share with you in this and in future columns.

Here’s one to chew on.

For most of the 18,000 years of recorded human history, the vast majority of human beings were employed in agriculture. No matter how smart, dumb, strong or weak our ancestors were, nearly all were farmers. They created food, or were involved in making clothing, shelter, wagons and other products that were immediately useful to themselves, their families, and their neighbors.

The Industrial Revolution began to change that dynamic, starting in the late 18th century. But when ex-farmers became workers in manufactories, they were still engaged in making things, only now paid in wages that they could use to buy food and other people’s manufactured goods.

The paradigm began to alter even more rapidly in the late 19th century with the advent of the three technologies that permitted the growth of large metropolises: the elevator, the telephone, and the refrigerator. Together, these allowed large numbers of people to live and to work at a distance from their food supplies. But the work that they did in the cities was still manufacturing.

Until 1960, New York City was the manufacturing capital of the United States, in addition to being its most populous center, home to tens of thousands of small manufacturing shops, many of them unionized — leather, metal products, wood, clothing, printing.

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In a shift that seemed at the time gradual, but in real terms was very swift and precipitous, taking place in a mere 50 years, American city-dwellers (and suburb-dwellers) became no longer mainly employed in making products. Manufacturing jobs were sent away, initially to more rural areas where wages were lower, and then overseas. What replaced them in the cities were jobs in the service sector, which I’ll characterize as "process" jobs. People pushed paper, managed other people, bought and sold stocks and bonds and derivatives, sold shoes, taught students, served hamburgers, and serviced computers.

There has been a hidden but terrible emotional cost to this shift: the loss of the feeling of satisfaction that one has when making a product. For countless generations we had in our bones and in our DNA that feeling of being product-ive, which contributes to our sense of the intrinsic worth of our work, a sense that is much less available to people who are engaged and employed only in "process." No wonder so many people feel as though they’re in shock, these days.

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We were told that in the 21st century, our new managerial and processing skills would be easily translatable to new jobs if we lost the ones we had, but I have not seen that occurring. During the early days of the Industrial Revolution it was possible for farmers to become factory hands without too much strain; today I fear that it is less possible for people thrown out of work at the likes of Lehman Brothers or Circuit City to adapt themselves (and their families’ lifestyles) to the jobs extant in post-industrial America.

Can our economy now absorb another, say, two million managers? Who will they manage? Can we find new and appropriate jobs for, say, a quarter-million mid-level former stock brokerage employees? What products will they buy or sell? What transactions will they process now? Maybe the health-care industry can absorb these workers. Or the education industry. Or the "green" industry.

More about this subject, in the future. Your thoughts on it are welcome.