Provide Services, Not Goods

Our economy is based on us consuming things. The more we consume, the better the economy looks. Companies thrive by buying raw materials and labour cheap wherever they can, and selling at a profit. The more goods sold the better. We're used to thinking of the economy as having three sectors - primary (resources), secondary (processing and manufacturing). and service (shipping, marketing, retailing, financial and everything else). The first two are suffering in North America because of globalization, but that's a topic for a future post!

Services may be divided into three parts. The first is based directly on the distribution and retailing of the material goods produced by the primary and secondary sectors. The second is financial services, where profits result from moving money from those who have it to those who need it, and speculating on these movements. The third involves all of our actions which are not based on material or money, like hairdressing, entertaining, cooking and so on.

These latter services are interesting because profitability is not based on consumption of materials. The first two types of services encourage more consumption, whereas the third encourages less. And less consumption of material is the key to giving our planet a chance!

So - how can we apply the principles of the third type of service to the rest of our economy, and get away from our rampant consumption of material?

Let's think about heating our house. We buy fuel or electricity from a supplier or utility which makes more money if it sells us more. Of course, they want to sell us more. They certainly don't try to help us insulate or install a better furnace.

Consider, though, if we contract a heating company to keep our house at a comfortable 20 degrees C. We pay them a monthly amount, and they supply whatever it takes to meet that obligation. All of a sudden, the heating company will come up with ingenious ways to supply us LESS fuel. They may insulate our house or install a more efficient furnace, and they'll monitor our usage and keep the equipment maintained. The company will own the furnace and the fuel, but that's OK. Our house is warm.

You can apply this to cars as well. You hire a company to provide you with 1,000 km of driving per month, and they supply the car and the fuel. You can bet that you'll get an efficient, well-designed vehicle with a long life and no built-in obsolescence.

Many people think that an economy based on these kinds of services is our only hope.

Next post - What would a car look like in this service economy?