Economy: as it is -- not was
It is no news that most of America's economy has long shifted from producing goods to providing services - banking, insurance, transportation, fast food, retailing, health care, communication, education, data processing, the whole realm of information handling.
The news is a growing recognition of the need to take more account of this great sea change when shaping American policy.
A prime example on the international scene is the Reagan administration's initiative for new trade talks focused on freeing up the commerce in financial and other services. This round, sought for November in Geneva, would contrast with the previous ones concentrating almost totally on the export and import of goods. It is high time, what with America's balance of payments in services steadily increasing over the past decade while the balance for goods has been going down. Last year US exports of services, the world's highest, added up to $ 60 billion.
Washington's push for such talks signals an awareness of the importance of services to the American economy. After all, the number of American workers in services has risen to more than seven out of ten. Services account for two-thirds of the gross national product, trailed by manufacturing's less than a quarter and farming's less than 4 percent.
The question is whether this awareness has sufficiently affected the administration's domestic economic policy. Like the previous administration, it has made much of spurring ''reindustrialization.'' It has provided tax and other support for capital formation and investment in plant and equipment. But it is far from providing similar support for the investment in training and education necessary to enhance the nation's human capital.
There is no question that America's basic manufacturing industries, such as cars and steel, need to become more productive and competitive. But the efforts in their behalf have to be accompanied with regard for that larger part of the economy represented by services. For example, as robots replace workers in manufacturing, it will become increasingly important to have Americans ready for the jobs opening up in the expanding field of high-technology services.
Obviously the necessary training is not just a favor to the person receiving it; it is a contribution to the good of the country.Part of the benefit lies in the morale of a nation where people are prepared for satisfying jobs. Part of it lies in dollars and cents. Consider what Theodore Schultz, a Nobel prize-winning economist, has said: ''The rate of return on education has tended over time to exceed the rate of return on physical capital.''
It should be a word to the wise that the Soviet Union and Japan are investing in youthful human resources by sharply raising both educational spending and educational standards. The United States already has a serious shortage of the highly skilled people required for the swing to service professions and high technology -- prime fields for the US to maintain a competitive edge in as traditional industries take a lesser position in the structure of the economy.
Boost industry, yes, but not like generals preparing for yesterday's war. This warning came from the heights of the services sector recently when James D. Robinson III, American Express's chairman of the board, spoke to the National Press Club in Washington. As he says in excerpts in today's Opinion and Commentary pages, the nation's economic assumptions, policies, and plans remain based on an industrial economy. They do not take adequate account of the dominance of the service sector and its rich potential for such goals as job creation.
Mr. Robinson advocates a complete review of all economic indicators ''to reflect the economy as it is, not as it was.'' To this basic step might be added the kind of long-range thinking being given to the very positive aspects of a service economy. These include:
* Preserving the honorable essence of service as something done for others, not subserviently but helpfully -- ''service above self,'' as Rotarians say. One economic consultant has proposed government support for a US private sector program toward solving world problems while, for example, increasing US exports and jobs.
* Seeing the switch from trade in ''things'' to information, which is a principal service-industry ''product,'' though time also is a large part of service transactions.Selling a thing means the seller no longer has it. Selling information means both the buyer and seller have it. It is more like sharing than exchanging. Unlike physical resources, information is not scarce, is not depleted when used. The whole outlook can be to spread shared benefits rather than hang onto selfish ones. This would be profitable for any nation in a sense beyond its shifting economic structures.
