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    Last modified 10/07/08


        Copyright © by Nila Gaede 2008

    If we eliminate agriculture and manufacturing, this leaves services. Can services be the solution to our economic problems?
    Will we be living in a service economy for the rest of eternity?

    Unfortunately, the service sector is in the same boat as manufacturing. The problem is that we have run out of ideas. We need
    only look at the hard facts to realize this. Every country on the planet has offered and is offering pretty much the same services
    since we ever invented this category. There are no new line items added year after year; certainly not in the hundreds. The poor
    countries of the world follow the rich countries and the rich countries imitate what has been successful in another. The entire
    world follows the lead of the US. The economy of the US is therefore the only economy we need to analyze to determine where
    the world is headed.

    The US officially lists ten major labor categories divided in turn into anywhere from 20 to 50 others. [1]  The service sector is
    divided into every service imaginable, from hairdressing to insurance, from sales to food preparation, from physicists to
    salesmen and janitors. Every country in the world has more or less the same categories. The reason for this finite and popular
    list is not a mystery either. There are only so many services that one person or company can provide a human being. Perhaps
    we will invent a couple more that we haven’t thought about yet, but certainly we won’t be brainstorming hundreds more. This
    means that whatever jobs we create in the future will fall under one or another of these categories, which means in turn that
    the proportion of one category can go up only at the expense of another. The point is that the service sector is not creating
    new categories to make room for the future economy.

    So, do you believe that we will simply be changing the percentages of each of these categories for the next million years?
    Let’s see if this is at all possible.

    Some of these categories clearly depend on population. For example, the expansion of hairdressing and barbering has to
    come to a complete stop when population no longer grows. Likewise there is a maximum ratio of doctors, nurses, lawyers,
    masseurs, and social workers to patients and clients. These professions can experience no growth the day that we attain
    ZPG. The most ominous category is sales because it currently employs over 10% of the workforce. Sales are certain to
    grind to a stop when the population reaches a zenith and goods and services enter a flat demand regime. In fact, sales are
    already declining as a percentage of total GDP as I write.

    The relativistic economist replies that the new breeds will be absorbed in the other categories.

    The problem is that other services are ultimately not labor intensive. Unlike hairstyling, nursing, and massaging which are
    one-on-one and cannot be offered to people on the other side of the planet, management and banking are demographically
    fractional and can be done by remote control. Analysts are misled into thinking that impersonal services will create jobs
    because these line items are still growing today. But let’s carry the thought experiment to its logical consequences. Take
    financial services for example. It includes activities such as banking, credit cards, insurance, real estate investments, and
    stock brokerage. Financial services comprise a huge chunk of the service sector (roughly about 20%). However, bankers
    are like actors, teachers, presidents, and priests. With the right software, one banker can serve a hundred as well as a
    million users (dispensing with the programmer in the long run as well). We don’t need one banker per person like we need
    one masseur or one barber. Likewise, we do not create a new Hollywood studio every year, nor does the volume of actors
    and actresses increase in proportion to the population. The entertainment industry makes profits by showing more or less
    the same number of films and programs to an ever growing population. The financial services business is much like the
    film industry or like car companies. You don’t see new motor companies sprouting around the world every year. A handful
    of traditional firms compete for a shrinking pie until they either merge with a competitor or declare bankruptcy. The trend
    in all these industries is to eliminate costs (i.e., jobs) with the ultimate goal of annihilating the competition.

    Another important service segment is administration. Every company needs to have a payroll and an accounting
    department. However, once the software is in place, companies don’t need administrators. The system runs with a
    minimum of supervision. The trend is towards a paper-less office. This renders the bulk of office work (e.g., secretaries,
    managers, payroll and filing clerks, accountants, hiring personnel, etc.) obsolete.

    Food preparation is also a major category. Will this segment explode in the future when the number of mouths on the
    planet becomes a constant?

    Unfortunately, in the context of a population standstill, fast food and other restaurants have no future. No new mouths
    to feed, no need for more restaurants! It’s just that simple.

    Perhaps architects, construction workers, and janitors?

    Nope! If we are not going to construct more McDonalds or Burger Kings, what do we need them for? No surplus humans,
    no buildings, no masons!

    Reservations and check-in counter clerks?

    Travelers make reservations through the Internet nowadays, and the airlines are replacing humans with electronic tickets
    and automatic check-in machines.

    Teachers?

    What do you need teachers for if there are no students? Remember? We’re not putting out children in the cities.
    Nevertheless, before we get to that point, the same teachers will simply teach fewer students. (And they will thank God
    for the blessing!)

    Everywhere you look, businesses are becoming ever more efficient, cutting costs by trimming payrolls, laying-off
    personnel and replacing workers and employees with machines, or streamlining processes. Nowhere is a firm working
    towards increasing headcount. People are being crowded into ever shrinking corrals, which themselves are functioning
    as efficiently as possible:

    " Open borders and new technology have made it easier for firms to seek out
       places with lower wages and less-restrictive work rules. That has accelerated
       the shift in developed economies from heavily unionized, higher-paying
       manufacturing jobs to lower-paying, less-secure service sector jobs."  [2]

    Every company out there without exception is in the process of becoming more efficient. If it isn’t, a competitor will drive
    it to extinction.

    So where are the future generations going to work if we do not generate new service categories? If there are only so many
    line items in the service sector and each one is dying by attrition, at some point jobs will be filled when the population
    doesn’t expand any more. If the US is still selling goods and services it is because it sells to other countries! The US has
    gotten around the population limit to its economy by exporting. But when the global population comes to an end (ZPG),
    the US economy is as good as dead.

    Just in case, self-employment is on its way out too. From 2002 to 2012, self-employment is expected to decline by 2.3%. [3]  
    Mom and pop stores are unable to compete against the heavyweights and are fast becoming anachronisms. Nickel and
    dime stores will become a footnote in history, out-priced and out-competed by the majors.

    In conclusion, the ideal artificial or ‘civilized’ economy is one run entirely by computers and robots in which demand
    (human population) steadily increases, if possible exponentially. We have no problem with the production part of this
    equation. We are undoubtedly streamlining processes and becoming more efficient. It is the ‘reproduction’ part that is
    troubling. This trend is going in the wrong direction. A service economy is by its very nature an urban economy, but
    urbanization is characterized by density-dependent birth rates. The more people we concentrate in a region, the fewer
    children we spit out. We have maximum supply efficiency, but declining demand. We enter a regime of diminishing
    returns until there are no returns! What will drive corporations to put out goods and services when there are no profits
    to be had? Where are stock market investors going to place their bets tomorrow?

    Let’s finally settle that there is no other major economic sector in which we can employ people other than agriculture,
    manufacturing, and services. When we mechanized agriculture in the 19th and 20th Centuries, the economy shifted to
    manufacturing. This didn’t last long because we quickly streamlined manufacturing and moved into services. We are
    now in a phase where we are optimizing agriculture and manufacturing everywhere in the world. Once agriculture and
    manufacturing are running as efficiently as they ever will, we are left with the most efficient global service economy
    that we can possibly have. Is it possible to have a 100 % service economy? Or, assuming that the optimum ratios are
    agriculture (1%), manufacturing (10%), and services (89%), will we live with these proportions for the rest of eternity?
    If manufacturing and fertility are declining, and the service sector is itself becoming more efficient day by day, there is
    no question that at some point the global economy will suffer a mega-crisis. Not millions, but billions will be laid off.  
    The question now is not whether, but when. I argue next that this necessarily happens before we attain ZPG. When it
    does, it’s the beginning of the end of Man.
And remember, children.
As adults, you will all be
working as food servers in
the only industry that may
still be growing by then.
That's why it is absolutely
essential that you learn
how to write menus.
The service sector has no
ability to stimulate either
fertility or the economy
Adapted for the Internet from:

Why God Doesn't Exist