Manufacturing fetishism is back. It is easy to understand why. People have made large amounts of money for themselves – and occasionally have claimed to be creating large amounts of wealth for society – by exchanging bits of paper. But since the financial crisis of 2007-08, the public views this process with increased scepticism. The claim that real wealth can only be achieved by making things falls on receptive ears. You can’t have an economy of hairdressers, the saying goes.

Yet you can’t have an economy of steelworkers either. Mao Tse Tung tried this: he encouraged the creation of backyard furnaces in which peasants melted down pots and pans to meet national targets for steel output. But the experiment is not generally regarded as a success.

The productivity of modern economies is based on the division of labour. If everyone grows their own food, and gathers their own fuel, it takes them most of the day. There is little time or energy left for conversation, entertainment, trading derivatives or inventing new goods.

That is what most of the world was like for most of history, and much of it is still like that. But specialisation of tasks gave opportunities to achieve economies of scale and to focus on tasks at which individuals or companies were, or became, particularly skilled. Less time had to be devoted to toolmaking, hunting and foraging, and more was available for chatting, playing music, hairdressing, insurance broking and discovering how the world worked. Some new activities required rarer skills and were consequently well rewarded.

But attitudes formed in these more primitive times remain deeply embedded in our culture. We feel instinctively that real work is physically demanding, based on manufacturing, agriculture and mining. Real work is undertaken by men, and if these men are not dedicated to toil, their wives and children starve. Those of us who do not break sweat in the course of our day’s work often feel a tinge of embarrassment that we are generally paid much better than those who still perform manual labour. Those engaged in the most effete of occupations, such as bond traders or barristers, are at pains to emphasise how arduous their jobs are. Their employers often establish an environment that makes their work more arduous than need be.

Today manual labour is cheap because the world has no shortage of hands. The iconic manufactured goods of modern life are the iPod and the cruise missile, the Viagra tablet and the Coca-Cola can. For each, the resource content is a negligible part of the value of the product and so is the manufacturing cost. They are, in reality, packaged services. Germany does have a higher proportion of manufactured output than most countries. But it is illuminating to look at German manufactured exports and see the focus on precision engineering and speciality chemicals.

Traditionally, goods travelled to you but you travelled to services, and exports were predominantly manufactures. But even in the 19th century, British engineers built railways around the world, British merchants and ships carried goods everywhere, and the Reuters agency collected the world’s news: and on the back of these traditions Britain is today still a major exporter of civil engineering services, marine insurance and ship-broking, and media services.

Viagra and Coca-Cola illustrate how a service can travel, and technology enables services to travel more quickly and cheaply. The books that Britain exports have, for as long as I can remember, been made from trees grown abroad; but then globalisation meant the paper was also made abroad, and increasingly the printing took place overseas. Soon shipments will be entirely electronic; selling a book will involve no physical objects. The division of labour becomes ever finer and generally increases the wealth of all involved in the production process.

Perhaps it is time for manufacturing fetishists to move beyond categories set by Stone Age man’s requirements for food and shelter.

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