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Comment by Houshalter | Hacker News Reader

But there aren't a finite number of factories. If more factory work gets automated, then it will reduce the cost of building more factories and producing even more goods.

Whereas service jobs seem more finite. There is only a finite demand for burgers or shelf stockers, unless you increase the population. I really don't understand how a mostly service based economy is sustainable.

In any case, the service based jobs are just as vulnerable to automation. There are already a number of prototype burger making robots, for instance.

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> unless you increase the population.

That doesn't help either. If you are increasing population without that population having wealth (and generally the wealthier you are the fewer kids you have) you dilute the distributed wealth of the poor to the point where they no longer have the economic influence to warrant hiring shelf stockers or burger flippers because they have no money.

> There are already a number of prototype burger making robots, for instance.

The automation of service is not coming in the form of robots doing a service workers job, its computers obsoleting the service. It is the same thing trying to make the "perfect" veggie burger vs learning to love naturally vegan dishes.

It is companies like Amazon that are displacing service workers by the thousands. There is so much potential revenue to be made and costs to be saved by having a wholly automated supply chain, and eventually you are having your burgers air dropped on demand by drone rather than having to go anywhere in a self driving taxi to get the burger. The logistics of service will... are... changing fundamentally, constantly, every day, progressing towards those eventualities.

It is not a problem tax rates or "American grit" solve. It requires a rethinking of your economic system when you finally accept reality that swathes of productive gains are not being made by the sweat of a single human being, at which point the fruits of those labors are no longer compatible with traditional laissez faire capitalism.

There's a finite demand for manufactured goods too. If anything, the price elasticity for manufactured goods seems likely to be lesser than that for restaurant meals; I'd eat out more often if it cost less, but I'm not going to buy additional dishwashers or dining tables for my house no matter how cheap they get. I'm not going to buy light bulbs or printers faster than they need replacement due to failure. With laser printers and LED bulbs, that can be several years between purchases.

You're correct that manufacturing too has a finite demand but it still has an order of magnitude more potential than the service industry. The vast majority of service jobs are extremely local or tied to a language/region/jurisdiction so those jobs have very little to export. Meanwhile, the vast majority of the world is not yet affluent enough to afford most luxury manufactured goods so as the population gets wealthier, the market for manufactured goods expands. As long as the developing world follows western consumerism, and by all vounts it looks like it is, there is a lot of room to grow. Developed countries who have centuries of industrialization behind them and a knowledge economy stand a much greater chance of capturing that newly generated wealth because of scale and experience. As long as higher labor and regulatory costs can be offset by automation, the manufacturing can be grown with the world while services can only really grow with the national population.

I see a lot of growth potential for manufactured goods if you measure them in mass. I'm not sure there's great growth potential if you measure them in money. Every wave of industrial relocation so far has overtopped the previous one by lowering costs. China's steelmakers are exporting more tonnes of steel than US steelmakers did 50 years ago, but they're also commanding significantly less money per tonne. For that matter, if poor countries are going to get wealthier but buy manufactured goods from abroad, where is their new wealth coming from if not manufacturing or services?

You have an over-narrow concept of 'services'. A large part of 'service' wealth creation happens in management of supply chains (import/export, sales, marketing, logistics, right down to shelf stacking and warehouse workers) which scale alongside industrial demand, not population. Overseas manufacturers can't access markets at all without effectively paying service providers to help them distribute their goods. Walmart is, in a way, an exporter of market access services.

That's even before you consider service industries that create intellectual property which scale with global laziness and boredom, or the finance industry which provides services that scale with global economic activity, rather than local population.

While the number of goods might be limited, the quality is not. If you have more disposable income, you are just as likely to spend it on a better car, a better house, a better laptop, a better phone, etc. Higher quality goods require more complicated manufacturing, more resources, more workers, and longer supply chains. All of which employ more people.

I'm not sure the quantity of goods is limited either. Looking at a supermarket today, the diversity of goods for so many niche purposes is incredible. And the internet has increased it an order of magnitude more.

These high quality goods require more sophisticated automation, not more workers. Unless you expect a future of hand made items.

Perhaps you wouldn't, but I do know people who regularly change out all their furniture and appliances for newer models that have more bells and whistles and/or are more "fashionable".

Would they do it every single year if the furniture and appliances got cheap enough? IMO, yes.

I would argue this is done more as a psychological status symbol. If goods such as furniture and appliances are so cheap that your "average joe" can buy the latest appliance on a whim, the symbolism becomes diluted and your friends will be less inclined to make frequent purchases for these items. They will seek out new status symbols.

> But there aren't a finite number of factories.

There absolutely is a finite number of factories.

There's probably even a finite, though perhaps quite large, limit on the number of factories that can exist (at least, within Earth's future light cone.)

There's a finite demand for goods too. I don't have unlimited room to fill my house with crap, and if I buy more advanced tools and things that replace a multitude of tools, my total demand will go down.

It may be a generational thing, but I just don't see people owning or wanting to own as much stuff as the generation before. A desk full of organization tools like a rolodex, card holder, pencils and notebooks just doesn't exist anymore.

In a similar vein desks are now covered in speakers, USB drives, monitors, laptops etc which all have a lifecycle just as the Rolodex and card holder became obsolete.

These items are also harder to produce and have, at least in my eyes, shorter product life

Speaker technology (analog) interface has not really changed since 1930 or so.

Monitors are newer, but you still see analog VGA ports and in TV, composite connectors.

It is the new digital interfaces that face obsolescence.

Whereas service jobs seem more finite.

Not sure I agree. At the moment, I'm buying all the goods I reasonably want. Sure I might want to replace some of my cheap goods with expensive goods or some of my old goods new goods, but on the whole I don't really want to consume more goods.

On the other hand, I can easily think of dozens of services I would either start consuming, or would consume a lot more of, if they existed at an acceptable convenience and price point. The problem, as I can tell from my phrasing, is creating service jobs at a salary level that people can live on.

    there aren't a finite number of factories

Please reconsider the absolutely absurdity of this statement.

Factories do not scale as well as service because they need are limited by natural resources. Service can literally be created out of thin air. For example, an AI could create an infinite number of movies or books or insurance contract. A factory making widget will be limited by availability of raw material.

They both share the same limitation at the end of the day. At the end, the human being is relatively static. You can sell widget and services that free more of his time, and then you can sell widget and services that occupy that free time, maybe at a stretch you can sell him something to free the time occupied by other stuff he bought, but there is a limit at 24 hours attention span per human.

>Service can literally be created out of thin air.

Not really. It's built on manufacturing base. You need to 'service' something.

Lots of service are personal services (the thing you are servicing is the customer), and categories of personal service expand and contract with, essentially, fashion. Service can literally be created out of thin air.

Personal trainers, nail artists, psychotherapists, tour guides, social media consultants, maids, window cleaners, YouTubers, Mariachi bands, pet groomers, translators, golf instructors...

And who is going to pay for those services? All those services are for the rich upper classes that can afford them. Your servant can't afford her own servant.

This is actually directed at the sibling comment from Houshalter:

I'm pretty sure that people who aren't members of the "rich upper classes" do make use of most of those services. To take just one as an example, nail salons are actually more common in the poorer parts of town in most cities I've been in.

They reach saturation in a local area quickly and tend to burn out quickly. They also tend these days to not even be year-round work.

Fireworks booths, Halloween shops, frozen yogurt franchises, "escape game" franchises, "curves" gyms targeted towards women, edible fruit arranged like flowers...a lot of service jobs have very short shelf lives, and can really only have one or two in a town.

Until we get that Holy Grail of general AI, services are the exact opposite of scalable. Even then, most services will need to be replaced by AI and hardware, which will depend of manufacturing scalability. A single factory can be big enough to mass produce enough widgets for every person in the world but that can't be done with lawyers, restaurants, barbershops, retail stores, or driving instructors until we have advanced robotics, AI, teleportation, virtual reality, etc. at which point it's just software and manufacturing. Just look at how the manufacturing sector output has grown over the decades despite a static labor pool while the service sector employment expands linearly with its size.

More importantly, manufactured goods can be exported much more easily to a growing global consumer base than services (other than software) that are almost always limited locally or regionally.

It's really weird that you think there's an infinite demand for goods, but not an infinite demand for people to stock those goods on shelves.

Anyway, a 'service economy' doesn't mean unskilled drones working in back-of-house. It means having a substantial professional class.

Human desires are more infinite though. We all want a bigger house, faster car, cooler phone, a masseuse appointment every week, etc.

I experience an increasing renaissance of undemandingness.

Not necessarily... 'course I'm well over 40 and my kids have moved out. FWIW, my kids don't much seem to want these things, either.

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