If you mean that one can trade a service economy for a manufacturing economy and claim it’s a plus, then yes, it is a faulty assumption. But one cannot have a manufacturing economy without a service economy, so I wouldn’t go as far as to claim that providing services is necessarily a subsidiary function of producing goods.
Common sense. One needs not be an overeducated economist of a union activist to see that.
In the heyday of American excellence, there was a healthy mixture of both. No sane, aware person can argue that a service component of any economy is not necessary.