Through out time, many economic activities that the market clearly chooses to value are still thought inferior to productive activity. Usually some activity of physical production is what is felt to be really valuable.
I think we used to think of Agriculture this way, and still do to a degree. Hell, I grew up on a farm and at some level I think food production is special.
But is it?
I think not really.
While when human could barely provide enough food to survive, food production is priority # 1, and other uses of time usually yield to it. Now a few human produce more than enough food for all, in fact too much given our expanding girth as a nation. Most of the rest of society is freed up to do other things. Like manufacturing. Soon a few human produce more than enough manufacturing for all. More people are freed up for service work. In both cases we seem to feel a physical product is the result of real work.
I thought Karl Smith had a nice piece on why that’s a fallacy.
When I taught econ 101, I would begin my semester with a discussion of auctions and the TV show “cash in the attic.” The idea was to first communicate that value doesn’t have to come from “creating” anything. It can come from rearranging the things we already have.
The items in an auction were always there but they were junk to one family and treasure to another. Rearranging the who had which item made the world a better place. This usually went over pretty well.
Creation and Value
Wed, 13 Jul 2011 20:18:42 GMT
Our ambivalence about increasing amounts of production being non-tangible comes from nostalgia about the past to a degree. It tends to be reflected in policy to support the old economic activity. Farm subsidies seem to clearly exemplify that. I wander to what degree will see similar support for smoke stack industries. I think we already do to an extent.