31 March 2004
On the way to post-industrial
It is no secret that the US economy is shifting toward services and away from manufacturing, to the general despair of (mostly) Rust Belt states where industry seems to be in free fall. The most immediate result of this transition is an expansion of political rhetoric, a lot of yammering about saving jobs. But other things seem to be happening in the background, and one of them might be a general improvement in the national morale.
How is this possible? A study by psychologists Leaf van Boven and Thomas Gilovich [link requires Adobe Reader] suggests that spending our money on services travel, performing arts, even something as seemingly mundane as dining out enhances our lives, or at least our perception of our lives, more than buying furniture for the house or toys for the den.
This is not some anti-consumption screed, either; it's an acknowledgement of the fact that we are the sum of our experiences. New goods are nice, but then it's time for newer goods; as later possessions displace earlier ones, their relative position in our hierarchy of needs remains more or less constant. Experiences, on the other hand, are cumulative; we'll always have Paris, even after we've gotten back from Iceland. And experiences can be shared in a way products can't: we'd love to hear about your hike up the Appalachian Trail, especially if the alternative is hearing about your new plasma TV.
These findings, of course, seem more relevant the higher you climb on the socioeconomic ladder; down on the lower rungs, there isn't a whole lot of discretionary income to devote to either goods or services. But overall, it's a fairly safe bet that the demand for services will increase faster than the demand for consumer goods, which means that the American economy is doing exactly what you'd expect under the circumstances. The politicians, of course, will be the last ones to figure this out.
(Via Andrew David Chamberlain's The Idea Shop.)