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Published Articles On The Services Economy's Failure In America

These writings by author Daniel Horne address the political fiction coined by President Ronald Reagan as "The Services Economy". All economies have inputs to production and outputs from production. And, all economies have consumption. All successful economies result in the expansion of society and improved prosperity. Given this definition, a concept of an economy based on services cannot exist. Here is why: 

A hunter/gather economy has wild animals and plants as its inputs to production. The tribe is the primary form of civilization and the tribe’s chieftain is the primary form of government. Food is the output, which the tribe consumes. 

An agrarian (farming) economy uses domesticated animals and plants as its inputs to production. Food is the output, which the village consumes. An agrarian economy is the birthplace of “excess”. It provides for excess food, which spouts specialization. Specialization creates the cycle of excess food’s conversion into products and services. It is the birthplace of government, money, cities, and nations. 

An industrial economy uses metals, minerals, and other natural resources as its inputs to production. The output is products, which are consumed by the people of many nations. The industrial economy is still rather new to the long history of economies. It holds that products, rather than food, be the focus of economic success. This may be true, or it may be a final maturing of the Agrarian Economy, history will judge in centuries future. 

The reason that an economic focus on Services cannot exist as an economy is that the inputs to production to fuel these services are always human beings. To support a nation of services, a portion of society must become the needed inputs. An economic focus on services inevitably has the outputs of more crime, more sickness, more poverty, and more government to create economic growth. It is an economy of diminishing returns. By its nature, a Services Economy brings collapsing prosperity because it must cannibalize society to exist. Therefore, it is not an economy at all, but a form of Political Vice.