Industries That Add Nothing To The Economy

[Converted Lurker]

I've often wondered how so many hairdressers, beauticians, nail studios etc manage to survive. I some small northern towns they seem to make up well over 50% of the high street.

I used to think these would be the first places to go to the wall... surely the can't survive when people are struggling to pay their bills and feed their children. But then when you watch programs like "Tribe", and you see the even in the poorest communities in the world, the women all spend a huge amount of effort point pointing their nails, styling their hair, makeup/tatooing etc..

Clearly I was underestimating the importance of these things.

The point is though, I guess it doesn't matter that much what people do to create economic activity. The fact the trade takes place, means it contributes to the economy, so really any activity done in exchange for money is "adding" to the economy.

Maybe "adding to the economy" is the wrong term and "Increasing the rate of money-flow within the economy" is a better term?

crucial point missing, they do it for free/or swap favours, very little currency gets exchanged. In our *system* hair extensions can cost 350 quid and you cant swap it for having the house painted.

[ʎqɐqɹǝʞɐɥs]

I've often wondered how so many hairdressers, beauticians, nail studios etc manage to survive. I some small northern towns they seem to make up well over 50% of the high street.

I used to think these would be the first places to go to the wall... surely the can't survive when people are struggling to pay their bills and feed their children. But then when you watch programs like "Tribe", and you see the even in the poorest communities in the world, the women all spend a huge amount of effort point pointing their nails, styling their hair, makeup/tatooing etc..

Clearly I was underestimating the importance of these things.

The point is though, I guess it doesn't matter that much what people do to create economic activity. The fact the trade takes place, means it contributes to the economy, so really any activity done in exchange for money is "adding" to the economy.

Maybe "adding to the economy" is the wrong term and "Increasing the rate of money-flow within the economy" is a better term?

Even in the worst of times I think women would rather LOOK good than EAT well.

I have no SCIENTIFIC proof to validate this of course. Just a gut feeling.

[doctorbone]

I've often wondered how so many hairdressers, beauticians, nail studios etc manage to survive. I some small northern towns they seem to make up well over 50% of the high street.

I used to think these would be the first places to go to the wall... surely the can't survive when people are struggling to pay their bills and feed their children. But then when you watch programs like "Tribe", and you see the even in the poorest communities in the world, the women all spend a huge amount of effort point pointing their nails, styling their hair, makeup/tatooing etc..

Clearly I was underestimating the importance of these things.

The point is though, I guess it doesn't matter that much what people do to create economic activity. The fact the trade takes place, means it contributes to the economy, so really any activity done in exchange for money is "adding" to the economy.

Maybe "adding to the economy" is the wrong term and "Increasing the rate of money-flow within the economy" is a better term?

You know it well then, C.ock

Edited December 18, 2008 by doctorbone

[A.steve]

"Add nothing to the economy" - can anyone give a coherent definition of what this means?

Curiously, I discovered, when reading about GDP, building houses; factories; offices; public buildings - etc. are not considered economic activity in the context of GDP... whereas an "imputed rent" (i.e. a guess at how much it ought to be worth for an owner of a building not to have to pay rent) is considered to contribute.

It's a funny old world, isn't it?

[evictee]

telephone sanitizers...

[brumroccoco]

A.Steve, good question & I don't have the answer.

In terms of insurance I suppose I meant that if everyone worked together (they never would) like those small communities in N America (I forget their name, they don't believe in electricity, build wooden houses etc.), then ultimately, insurance wouldn't be required. Same for banking, IFAs etc.

i.e. your house has burnt down? The community will build you a new one. You need 24 hour care after a car crash? The community will take it's turn in caring for you etc. etc.

It'd never happen as all it needs is one person to opt out for it not to work in a community larger than a couple of hundred people.........and that's how insurance started in the first place

[brassed off brit]

telephone sanitizers...

Atleast it is'nt a python reference.....here we go...

[fildi101]

You know it well then, C.ock

'appen, I do.

[A.steve]

A.Steve, good question & I don't have the answer.

While it might sound that I'm blowing my own trumpet, I think it a critical question. If we assume that economic activity is desirable, then things that contribute to it are, by definition, good - in the context of secular society.

This raises a lot of deep questions:

* Is 'doing things' always better than not doing things?

* Where lies public responsibility - are all transactions in private beneficial?

* To what extent should the state direct the economy - by legislation, fiscal and monetary policy?

* What ends are desirable - and, for systemic questions, which framework should be adopted to guide us - is it appropriate to entirely separate church and state?

In a lot of respects, GDP/GNP remains utterly baffling to me... yet it seems to be the way that Western governments determine what is right. The calculation of GDP feels extremely partisan, blinkered and baroque - to me... For example, GDP will react positively to the spiralling bills of two lawyers arguing out a dispute over an alternate situation where the dispute were never to arise. Conversely, if someone were to build a cathedral or other impressive feat that will enrich the lives of mankind for centuries to come - this is considered worthless. If we use GDP to judge the creditworthiness of nations (as we do) then it stands to reason that policy will be influenced by the nature of GDP... a metric that is simultaneously bizarre; difficult to compute accurately (as the debacle with VAT carousel fraud proved); arcane and undemocratic. Maybe we should re-visit the assumptions made way-back in the 1940s and ask if the vision of the best minds at the time were blurred by the events of their time. How should we measure 'economic activity' - based upon the assumption that economic activity is desirable from a systemic perspective.

[huw]

The point is though, I guess it doesn't matter that much what people do to create economic activity. The fact the trade takes place, means it contributes to the economy, so really any activity done in exchange for money is "adding" to the economy.

Only for very relaxed interpretations of the word 'economy'

By that definition, Ponzi schemes, protection rackets and germ warfare research all add to the economy.

[brumroccoco]

Maybe I should've phrased my question, 'what industries do not add to the overall well-being of the nation'

[SMAC67]

All industry is pointless, life is a loss leader, ergo, all life should be extinguished at the earliest available opportunity. Life itself is pointless, it's all entropy really.

Fortunately we are well advanced in our plans to remove all loss making life from existence.

Knew I could beat Injun.

[A.steve]

Maybe I should've phrased my question, 'what industries do not add to the overall well-being of the nation'

Do you think you'd ever find consensus? I don't.

For the systemic perspective, one should ask what does add to the overall well being of the nation... that way there is hope for an answer that is acceptable and makes sense.

[dirtyrottenscoundrel]

Everything the state does, obviously.

yes, including fire bridages and ickle nursey wurseys as well.

The reasoning is simple and obvious - if you hav to force people to buy it, then they don't want it. if they don't want it, it's economically wasteful.

You are a fundamentalist libertarian. The abolishment of taxes; gold and silver backed money; the abolishment of public services; the creation of a private-sector utopia. The way you argue your ideological stance reminds me of Marxist zealots I once knew at university. You are not yet at their level, though you do have their gusto.

Is your type of fundamentalism likely to provide successful remedies to the social, economic, and political malaise we find ourselves in now? Or is the world far more complicated than the limited and shallow presumptions you base your prescription on?

The world is full of winners and losers. And we don't all start on an even footing. The libertarian argues that the free market should usurp the state and that all services should be commercialised. However, one problem with this approach is the issue of the haves and the have nots. How would your solution address a hypothetical plight of a seriously disabled individual; an individual without family? With the individual having no income, and with no taxes to pay for care and with all services commercialised, how would this person receive the care he or she needs? You might respond by saying charity. Haven't you stated before on this forum that people are self serving agents? What if the haves are so fixated on their plastic lives that they forget about the have nots? What guarantee is there that charity would suffice? Going back to the disabled person. Do you think he or she should be allowed to die? If so, would you not be prescribing an ideology that could be described as Eugenic Darwinism? If not, why not?

Edited December 18, 2008 by dirtyrottenscoundrel

[huw]

"Add nothing to the economy" - can anyone give a coherent definition of what this means?

I'll have a stab at it. Economic activity is supposed to be about human betterment. We give part of the wealth we earn to others where it will improve our well-being; others give us their wealth in return for our efforts on the same basis. In theory this should lead to a mutual cycle of improvement, in which the getting and spending of wealth tends to optimise the human condition.

Of course it doesn't quite work out like that in practice; if it did then this thread would not exist.

Curiously, I discovered, when reading about GDP, building houses; factories; offices; public buildings - etc. are not considered economic activity in the context of GDP... whereas an "imputed rent" (i.e. a guess at how much it ought to be worth for an owner of a building not to have to pay rent) is considered to contribute.

It's a funny old world, isn't it?

They are capital, not production. It makes sense to include the capital in the year it is produced, and the production enabled by the capital in subsequent years. Imputed rent would come under the heading of production, because the building 'produced' the good of shelter or whatever.

[brumroccoco]

A.Steve...fair enough, but I doubt there's been a thread in the history of HPC that's ever found absolute concencus!

And with that, my bed calls..

[bimyo]

You are a fundamentalist libertarian. The abolishment of taxes; gold and silver backed money; the abolishment of public services; the creation of a private-sector utopia. The way you argue your ideological stance reminds me of Marxist zealots I once knew at university. You are not yet at their level, though you do have their gusto.

Is your type of fundamentalism likely to provide successful remedies to the social, economic, and political malaise we find ourselves in now? Or is the world far more complicated than the limited and shallow presumptions you base your prescription on?

The world is full of winners and losers. And we don't all start on an even footing. The libertarian argues that the free market should usurp the state and that all services should be commercialised. However, one problem with this approach is the issue of the haves and the have nots. How would your solution address a hypothetical plight of a seriously disabled individual; an individual without family? With the individual having no income, and with no taxes to pay for care and with all services commercialised, how would this person receive the care he or she needs? You might respond by saying charity. Haven't you stated before on this forum that people are self serving agents? What if the haves are so fixated on their plastic lives that they forget about the have nots? What guarantee is there that charity would suffice? Going back to the disabled person. Do you think he or she should be allowed to die? If so, would you not be prescribing an ideology that could be described as Eugenic Darwinism? If not, why not?

I think you are mixing up social libertarianism with economic free-trading. Injin seems to be a fundamentalist in terms of the latter; the former, we don't know. And in turn you're mixing this up with marxism, which might be socially libertarian but is certainly not free-trading.

Many of the problems we have now have been caused by a political party which started life economically interventionist and marxist, then from the early 90s started fecking about with free marketeering. It's the intervention that goes together with eugenics, not the free marketing - check out the life of J.M. Keynes. Or look at any post-war New Town.

The thing is that the UK state is quite a special one, projected outwards in empire it has no checks and boundaries and the unwritten constitution leaves us virtually no recourse to challenge it. It sweeps away nations - someone said above the UK is a nation, it isn't, it's an unwilling coalition of nations shaped purely by capital. So what Injin says makes sense here much more than it would in Spain or Bolivia. But don't tell him I said so.

[A.steve]

They are capital, not production. It makes sense to include the capital in the year it is produced, and the production enabled by the capital in subsequent years. Imputed rent would come under the heading of production, because the building 'produced' the good of shelter or whatever.

I hope it is obvious how this is a nonsense... For example, would one ever try to estimate the production enabled by a biro, for example? While I understand the idea that there's production and ongoing utility, everything that is produced has an ongoing utility... cars, for example, are expensive to produce, and provide ongoing utility - but... this utility is not recorded separately.

This binary distinction between retained assets and consumed goods - to me - seems an unhelpful throwback to a bygone era. I see the separation of assets from consumed goods to be an attempt to justify a class distinction between the aristocracy (who own the assets) and the hoi-poloi who only consume and acquire no lasting wealth - and, hence, are subjected to monopolies - perpetuating the class distinction. While society has moved on somewhat, it seems, our financial system has not.

[Injin]

You are a fundamentalist libertarian. The abolishment of taxes; gold and silver backed money; the abolishment of public services; the creation of a private-sector utopia. The way you argue your ideological stance reminds me of Marxist zealots I once knew at university. You are not yet at their level, though you do have their gusto.

Is your type of fundamentalism likely to provide successful remedies to the social, economic, and political malaise we find ourselves in now? Or is the world far more complicated than the limited and shallow presumptions you base your prescription on?

The world is full of winners and losers. And we don't all start on an even footing. The libertarian argues that the free market should usurp the state and that all services should be commercialised. However, one problem with this approach is the issue of the haves and the have nots. How would your solution address a hypothetical plight of a seriously disabled individual; an individual without family? With the individual having no income, and with no taxes to pay for care and with all services commercialised, how would this person receive the care he or she needs? You might respond by saying charity. Haven't you stated before on this forum that people are self serving agents? What if the haves are so fixated on their plastic lives that they forget about the have nots? What guarantee is there that charity would suffice? Going back to the disabled person. Do you think he or she should be allowed to die? If so, would you not be prescribing an ideology that could be described as Eugenic Darwinism? If not, why not?

Nope.

I just don't think violence is a good way to solve problems.

All the empriical data is on my side, if you think that we should use violence to solve problems, you've got to prove that ti works better than not using it.

off you go, in your own time.

[Injin]

I hope it is obvious how this is a nonsense... For example, would one ever try to estimate the production enabled by a biro, for example? While I understand the idea that there's production and ongoing utility, everything that is produced has an ongoing utility... cars, for example, are expensive to produce, and provide ongoing utility - but... this utility is not recorded separately.

This binary distinction between retained assets and consumed goods - to me - seems an unhelpful throwback to a bygone era. I see the separation of assets from consumed goods to be an attempt to justify a class distinction between the aristocracy (who own the assets) and the hoi-poloi who only consume and acquire no lasting wealth - and, hence, are subjected to monopolies - perpetuating the class distinction. While society has moved on somewhat, it seems, our financial system has not.

Economic goodness is easy to sort out - it's voluntary trading and nothing else.

That is, the cheeky girls last album is economically productive (people really went and bought it freely) the bridge over the river kwai isn't economically productive (forced labour.)

[A.steve]

I just don't think violence is a good way to solve problems.

Violence solves any problem. If you think otherwise, you're obviously not considering enough.

I don't argue that the solution will be the right one, but to argue that violence is ineffective is to deny the obvious.

[the-sign-jacker]

Industries That Add Nothing To The Economy

makers of invisible ink.

[bimyo]

Violence solves any problem. If you think otherwise, you're obviously not considering enough.

Not that I think he needs any help with pedantry, but he didn't say violence doesn't solve problems, he said violence isn't a good way to solve problems.

[Injin]

Not that I think he needs any help with pedantry, but he didn't say violence doesn't solve problems, he said violence isn't a good way to solve problems.

Yup.

What has ot be shown is that violence is the best option available, something to build a society around.

Good luck with that.

[A.steve]

Economic goodness is easy to sort out - it's voluntary trading and nothing else.

I completely disagree. The above assumes that there are no untoward systemic effects that can arise - I do not think this is the case.

While I doubt I'll change your mind, I prefer the rule of law and the protection afforded by the prohibition of the most unacceptable practices. I prefer not to be forced to intervene with violence myself where my interests are trampled by the inevitable uncooperative who see short-cuts to voluntarily trading. I want the security afforded by contract/treaty - and for obligations therein to be acknowledged. I prefer not to be 'voluntarily trading' with people running protection rackets.

"Voluntary trading and nothing else" is, dare-I-say-it, the sort of lunatic-fringe noodle-knitting idea that makes what you say appear so daft. Not all people are honest - and, unfortunately, in real life, you need to deal with that.