In thinking about a sentiment and statement expressed by Stirling Newberry in his post: Fox News Slags Stimulus Bill for Being Too Republican

If the United States wants to get back on track, the first reality that needs to be addressed is that our present sources of Credit are Japan, which is in a deep funk; China, which does not want the price of resources to rise, and can limit purchases of Treasuries; a pool of the global wealthy; and the oil states. The road to long term recovery lies in manufacturing, which has been in a slow bleed for two generations.

I recognize two important factors here. First, that economic recoveries tend to ride on the back of export booms (something we aren’t likely to see, strong Dollar, lack of global demand, etc), and should be of serious concern when surveying the condition of the global economy. Second, that a services-based economy isn’t a panacea, because despite analytical services being essentially limitless; there is a limit on the utility of splitting minutiae to be analyzed.

That said, I remain confused about how manufacturing is going to help us. This assumes that there’s some legitimate utility gap to be filled by our excess productive capacity (our high unemployment). As we’re seeing increases in employment displacement, we’re not simultaneously experiencing slackening in supply of consumable goods and services; at least in the sense of observing any scarcity. Essentially we still have tremendous access to almost unmitigated quantities of "stuff."

What would be the benefit to simply producing more stuff that nobody buys, and is that even sustainable as a mode for the economy? I keep getting the feeling that people are pushing for re-industrialization, and I’m not convinced it makes sense. Do we really need to put people to work expending resources manufacturing more consumables, when we’re not seeing anything resembling a shock to supply of these goods currently? Perhaps we’ve reached a point where our myriad advanced global economies fundamentally don’t need all these people engaged in pointless pursuits of production for its own sake? It seems like we’re trying to prop up our antiquated industrial era income/compensation regimes (the metrics by which we measure macroeconomic health), because we’re not tackling more fundamental questions about the inherent competition and conflict-of-interest they have with pursuing increased automation of production (our microeconomic incentives to push production costs as low as possible)?

I am of increasing suspicion that we may have to look very hard at the role and necessity of maximum-employment in advanced economies. At some point a de facto policy of technological advancement to replace human-labor is going to have to come to grips with the reality of having achieved exactly that. In today’s simple terms, consider the establishment of single-payer health insurance and the excess supply of administrative workers that would create, in a perverse irony the market’s inefficiency of employing those people to do dubious work can have a positive impact on the larger economy simply by keeping them employed; generating income and participating in exchange (note: this should not be seen as an argument against single-payer; of which I’m an advocate).

In short, there doesn’t seem to be an excess of tasks warranting employment that add utility to the economy, and that condition is only going to solidify as new markets are increasingly specialized, and more rapidly moved to commoditization via application of technology and process advancements. The necessity for human engagement in production will be (and perhaps ought to be) increasingly mitigated. That seems to be exactly what we’ve been working so hard to accomplish. So, is the problem unemployment, or could it be that our macroeconomic and social systems aren’t yet capable of dealing with the leisure glut left behind by our microeconomic successes?