At Project Syndicate, Harold James, professor of History and International Affairs at Princeton, presents an interesting take on why people in developed economies are showing a lack of confidence in the future, even as the economic situation improves. The nature of "economic malaise," James writes, "lies in the combination of economic uncertainty and the emergence of radically new forms of social interaction."
The new service economy extends market relations to areas of life in which, previously, informal assistance and guidance within family units prevailed. To the extent that employment and income in the new services can be easily recorded, this change implies an increase in measurable economic wealth and output, because unpaid household services are ignored in GDP calculations.
Experts might thus interpret the macroeconomic consequences as largely positive. But the element of personal dependence is a throwback to the preindustrial world.
The zenith of the old service economy was the court of Louis XIV, where specialist courtiers attended to the Sun King’s every need, even the most intimate (there was a Groom of the King’s Close Stool). In that pre-modern world, private life was extraordinarily public, whereas the social movements of the nineteenth and twentieth centuries dramatically expanded the realm of individual privacy and self-definition.
Today’s new service economy is driven by the resulting uncertainty over identity. We need advice on every aspect of life, provided in a complex world by people whom we think to be experts in ever-narrower and more specialized fields. We can easily monitor that advice and subject it to statistical testing: are our children doing better on tests? Are we more fit? Are we dating more people who share our perceived interests?
Paradoxically, the new technological possibilities are also eliminating privacy. We are moving back to the Sun King’s world, in which everything personal is known, rumored, or whispered. But now, with electronic surveillance, personal dependence has never been more extreme, more humiliating, and more depressing.
This might explain some of the public dissatisfaction captured in so many surveys, even when economic conditions are not dire. Subjectively, modern growth feels problematic, and perhaps even immoral.
Read The New Economy of Fealty here.
Filed under: markets, economic history, service sector, service economy, project syndicate, princeton, interaction, service industry, economic confidence, malaise, Harold James