I write because I learn when I write. I start out with a lot of questions and as I look into those questions, I first learn that the questions are perhaps not the right questions, and as I refine the questions, I start to get answers.
When I started to write Production Based Prosperity, I hadn't even connected the words production to prosperity. My intention was hopefully to write a primer on globalization. The book ended up quite different, and it ended up changing my entire view of the world.
However, I didn't expect the reaction I got. I didn't expect that tying the words production to prosperity would demonstrate an ignorance far greater than the simple stupidity of mindlessly saying mass produces gravity which is a product of mass.
I first thought the reaction an aberration. I was participating in a telephone conference with a bulk distributor of books, a bulk distributor being a person who finds a buyer for tens of thousands of copies of a specific title for promotional or educational purposes and the guy stated flatly that production is not a large part of American life any more, that hardly anyone engages in production. When I pointed out to him that his very business depended on production, that just because his office staff didn't participate in production, he would have no business and no income and his employees would be out in the street if it weren't for the admittedly few people that were manning the automatic printing presses producing the product he was selling, he just mindless said production wasn't an important part of American life.
I was astounded when my comments fell on deaf ears. He simply did not understand what I was saying. He viewed his work as a service operation. He apparently never came in contact with the product that was the source of his income. He worked on contracts with a book title, he worked with his network of contacts, corporate public relations departments, he worked with authors and agents, and when his job was successful, he sat back while someone issued an order to the printers telling them the number of books he wanted and the address he wanted them delivered to.
Printing has come a long way from the labor-intensive typesetting process. In fact, I'm in the process of converting The Copernican Series to POD, or print on demand, where an order comes in, a button is pushed, a book is produced, labeled and sent. The amount of labor involved in the production of books is pretty darn minimal. But that's the whole point of Production Based Prosperity. As jobs diminish in the face of technological advances, production does not get easier to maintain, it gets harder. The quality of the person overseeing the production increases while eliminating the workers doing the production. There was an article in the paper this morning about the problems of homebuilders. In the area, houses are scarce and one of the reasons new houses are scarce is that there are not enough skilled workers capable of overseeing their construction. There is plenty of labor, but labor can't build today's houses. It takes a high degree of experience and skill and that experience and skill is in short supply.
In printing, even though those engaged in production are few and have to be highly skilled, the product produced supports a tremendous number of jobs, from my friend who claimed his business did not involve production, to truck drivers, sales people, book chains, even a totally "service" operation such a Amazon.com, not to mention the state and Federal taxes generated by all of the subsidiary activities. Production Based Prosperity tackled the problem of distributing purchasing power to a populace in a production based society where the number of skilled jobs is increasing slowly, the number of unskilled jobs is increasing rapidly, and the number of overall jobs, as technology replaces labor, is decreasing.
For most of the world's history, people lived in feudalistic societies. Feudalistic societies formed around a ruling class for one simple reason. The basic purpose of the society was to feed itself. Feeding itself involved having fertile land. As there has always been, at least in recorded history, more people seeking to feed themselves than there was fertile land to feed them, fertile land required defense, and those best capable of defending the land became the ruling class of the society. The contract between the rulers and the rest of society was, the rulers would protect the herders and farmers in exchange for a portion of the food they produced.
The history of the world involves the struggle between societies over the available fertile land. Wars were generally contiguous. Except for the few, prosperity didn't exist. Wages were not paid. The farmers and herders kept enough for themselves and passed the rest along. Because feudal societies are labor-intensive societies, slavery abounds.
The mold was broken after the Black Death Plague in England drove the nobility to turn some of their workers into landowners. With the loss of so many workers, these yeoman farmers were empowered to grow as much as they could on their plots. Because the yeoman farmers owned what they grew and could therefore keep the proceeds from its sale, they sought to maximize the use of the land. This led to the Agricultural Revolution, the ability for fewer and fewer people to produce more and more on a given parcel of fertile land.
This development led to the elimination of large numbers of farm jobs in England. However, the English nobility had to honor its contract with the members of society, a contract that required them to feed, clothe and house them. With no farm jobs, the traditional method of feeding, clothing and sheltering them, having them live in small farming communities on the nobles' estates, was no longer feasible, and the nobility began to cast around for some way to honor their commitment.
This search led to the creation of manufacturing barns which, with the creation of equipment, rapidly turned into factories which spurred the creation of canals and railroads, and the need to secure sources of raw materials and maintain markets for the finished products.
However, the primary change what has become known as the Industrial Age created involved how the workers, now factory employees, were to be provided with their food, clothing and shelter. Instead of living in self-supporting communities, factories created salaries for the workers. The workers were then expected to obtain the food, clothing and shelter on their own.
The bug in the rug in all this is that once production was discovered, once the prosperity production produced was witnessed, everyone wanted a piece of it. Other countries raced to establish producing industries so their people could also prosper. This brought them into conflict with one another in the marketplace and competition in the marketplace forced prices down. With the drop in prices, factory owners were squeezed in the costs of operation. As the only cost that was flexible was the worker's salaries, competition between nations forced a reduction in salaries and a concomitant inability for the workers to feed, cloth and shelter themselves.
This led to poverty, which was a violation of the nobility's commitment to feed, clothe and shelter society's members. Governments were forced to use military force to protect the country's sources of raw materials and preclude other countries from selling competing products in established markets. This in turn led to conflicts and warfare, with the unemployed taking up arms on behalf of their country to protect the salaries of the country's workers. It wasn't until the carnage of two world wars in the 20th Century that leaders, considerably democratized as a result of the spreading prosperity production produces, realized that the sources of raw materials and markets were not similar to the fertile ground people had fought over since time immemorial, but were rather something that needed free access in order for production to thrive and spread its prosperity as far as possible.
Unfortunately, the invention of production was classified as an age, the Industrial Age, and consigned to the history books. Production was renamed the manufacturing sector and consigned, like my book distribution friend, to being considered as being a minor part of the economy. This incredibly awesome ignorance about the importance of production came home to me quite lucidly when former Michigan Gov. John Engler, in his position as head of the National Association of Manufacturers, decided to set forth a ringing endorsement of manufacturing. There is a continuous mantra when Republicans are in the White House that manufacturing is in a steep decline. Lou Dobbs of CNN fame is constantly harping that America doesn't make much of anything anymore. If we believe what we read in the newspapers, the only commerce going on is mega-rich CEOs stealing money from shareholders. The housing boom is bad because it's a bust and the incredible prosperity we enjoy, a prosperity that is the envy of the world and has people hurtling great obstacles to get here, is actually universal poverty, with our cities filled with homeless, our children starving, our old people, denied medical care, sick and dying.
To counter these myths, Mr. Engler said that manufacturing remains the #1 contributor to the U.S. economy's growth, making up 13% or $1.5 trillion of this nation's gross domestic product.
Imagine that! Manufacturing contributes 13% of the gross domestic product.
What contributes the rest?
Well, real estate comes in at 12%, business services comes in at 11%, retail is good for about 6% and government "contributes" 11%. Lesser contributions are made by mining, utilities, transportation and warehousing, information, and finance. Finally, agriculture makes up its portion, a minor portion indeed.
Although agriculture certainly produces prosperous ripples in the economy, when we consider that before production, agriculture was the economy, we can see just how important production, not manufacturing, but production, is. Manufacturing creates wealth which ripples through the economy to produce our prosperity as it contributes to real estate, business services, retail, mining, utilities, transportation and warehousing, information, finance, and certainly the income of governments.
Let's look at it the other way around. Our economy is composed of consumer goods, both durable, cars and refrigerators and the like, and nondurable, clothes and food, and services, which accounts for two-thirds, while government accounts for a third.
If it ain't food, and you need food before you can start on prosperity, its production, and our prosperity is based on production.
Peter Bros is the author of the 9 volume Copernican Series and is President of The Far Museum of Dallas, an actual history museum, which will house its collection of 50,000 rare Eastern Mediterranean manuscripts and artifacts together with actual history displays and tours in a full-sized replica of the Egyptian Temple at Dendera to be built in the Dallas Ft. Worth area. Email:peterbros@therealskeptic.com