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To: mad_as_he$$
No, service generates value because by serving you efficiently (assuming you produce something) it frees up more production/manufacturing value time. Like farming: because of delivery, marketing, sales, and insurance that have been dramatically improved by service, the farmer's time dedicated to actual farming increases.

The interesting thing is that economist A. Bhide suggested that in fact R&D in companies has greatly declined, not because they are only concerned with the "here and now," but because so much of the R&D is being done for them by consumers. For example, cell phone apps. Apple and others don't have to research what the "next thing" is because their consumers are already telling them. Apple just has to focus on delivery.

China, as best I can tell, only supplys a small part overall of Amerian goods (as was the case with Japan, which was the big bogeyman of the 80s and collapsed due to government intervention in its economy). I'm not saying we don't need to take China seriously, and I'm not saying manufacturing doesn't matter---it absolutely does, especially in the national-defense related industries. I am saying don't discount the critical value added component of service. Just like energy costs, it permeates everything.

George Gilder used to give the example of a book called "Manufacturing Matters." He held it up and asked, how much the book actually cost to make? $1 maybe? But the book sold for $25. So where was the extra value? Design, print layout, marketing, sales, artwork and of course the author.

41 posted on 08/29/2015 8:09:29 AM PDT by LS ("Castles Made of Sand, Fall in the Sea . . . Eventually" (Hendrix))
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To: LS
Not trying to be argumentative but I know farming very well. My family has been in farming for six generations. Most of the productivity improvements in farming were crop yield and equipment improvements. Both heavily R&D based. Corn yields have gone from about 50 bpa to over 125 bpa since 1960. We used to farm (excluding livestock0 1,000 acres with 4 men and 2 part timers in the late 60’s. Now the family farms 5,000 acres with 4 men and incredibly expensive equipment that is light years ahead of equipment even 20 years ago. “Services" imho play(ed) only a small part in the productivity while R&D based improvements made the biggest gains in productivity.
53 posted on 08/30/2015 4:19:46 AM PDT by mad_as_he$$ (Section 20.)
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