Monday, April 11, 2011

Builders vs. Traders, Makers vs. Takers

Richard Florida, he of the Creative Class, is a frequent Twitter user. Recently he tweeted a link to a Wall Street Journal op-ed called We've Become a Nation of Takers, Not Makers. Its author, Stephen Moore, threw out these statistics: In 1960, 15 million U.S. workers were in manufacturing and 8.7 million worked for the government. In 2010, 11.5 million were in manufacturing and 22 million worked for the government. Moore then went on to blame public-sector unions, essentially calling for privatization of policing, firefighting, and public transit systems.

Florida's brief tweet spun Moore's story as builders vs. traders (as well as makers vs. takers). I agree with Florida on the builders vs. traders (traders meaning investment banks and the like, that draw off many of the top college graduates into a parasitic enterprise), but the idea that anyone who works for the government is a "taker" is quite wrong.

Politifact demolished Moore's use of the 1960 and 2010 raw numbers, pointing out that they have nothing to do with those two employment segments as a percentage of the total workforce, a much more accurate way of viewing employment. Looked at that way, government workers went from 15 percent in 1960 to 17 percent in 2010 -- an increase, but a minor one -- while manufacturing faded from 29 to 9 percent.

What was growing? Well, duh, service employment and "business" (where do you think all those MBAs ended up working?). Hospitality went from 6.3 to 10 percent, and the professional business sector from 6.8 to 13.1. Not to mention health care or the entire IT industry that practically didn't exist in 1960.

Politifact summarized: "To us, the comparison of jobs in government and manufacturing looks less like 'an almost exact reversal,' as Moore puts it, than two largely unrelated changes."

Doonesbury Sunday cartoon of a young man becoming a banker, his values gradually changing from fair wage for good work to lots of money for damaging the world
Traders vs. builders, now that's another matter. By builders, I don't mean (and Florida doesn't mean) construction, literally. But builders in the sense of people who build businesses, communities and infrastructure. Traders -- which includes health insurance companies, in my opinion -- are all about extracting value along the path between builder and user, adding as little as possible in between.

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