We can't all live by taking in each others' washing

Maslow's Hierarchy

At which point we can try to call Maslow's Hierarchy of Needs into play if we want: but that's not enough for us to then declare that some things are “real value” and that others are not.

Everything is the product of labour, everything flows to labour, so we can't then say that manufacturing is real value in a manner that, say, finance is not.

It could be true that at certain points on that hierarchy we value some things more than others: that's actually rather the point of the observation in fact. But then that also tells us that at other levels on said progression we change our valuations.

We value food more than we do insurance when we've got no food but in the modern world the insurance sector (well, financial services at least) is larger than the agriculture sector by some way. We therefore appear to value insurance more than food at this level of wealth. Or at least be willing to devote more of our production/income to the consumption of financial services than food.

At which point this idea that some forms of labour produce real value, that some forms of production are better than others inherently rather disappears into the mist of misunderstandings.

Because there's only us human beings here to apply a value to our consumption. And our consumption must be equal to the incomes we gain from supplying our labour and, at the cumulative level, equal to what is produced by said provision of our labour.

Thus the bleats about how manufacturing industry is disappearing turn out to be just bleats. Yes, manufacturing output is slightly down in the UK (and at a peak in the US) from 2005 levels but it's really manufacturing employment that has fallen off the cliff. But that doesn't in fact matter for my point here.

For there is that claim that manufacturing somehow produces real value in a manner that services, or finance, or banking, do not. And I'm afraid that the idea as a whole is simply wrong.

The economy actually works by us all supplying our labour into the pot, we produce by dividing and specialising that labour, everything that is produced is consumed by us collectively and income is simply the measure of who has dibs on what. The whole thing mediated by the valuations that we put on our consumption and production possibilities.

Sure, the bit about who has dibs on what can cause problems at times. But, the analysis of the economy at this very fundamental level does show that we're really all eking our livings from taking in each others' washing. We get other people to satisfy our desires by making a contribution to satisfying their.

And that's really all there is to it. ®

Bootnote

This is the last of the regular Worstall columns. El Eds of El Reg have decided to liberate my labour to go and satisfy some other unmet human desire or need. See you around.