THE SHAPE OF THE ECONOMY TO COME.

The Midwest Steelmakers chapter of the Association for Iron and Steel Technology devoted its February dinner meeting (the food alone, which is real food, is worth the price of admission) to recognizing individuals who improved the art of steelmaking, and to a survey of the state of Manufacturing America.

It's no surprise that steel's managers see a reduction in imports of energy and Chinese goods, and an expansion of the domestic manufacturing base as Good Things.  That theme, however, takes place against a background of all the blast furnaces of the Lake Shore in blast, domestic steel production at an all-time high, with a work force one-tenth the size it was in the 1950s.  As of 2008, approximately 100,000 men and women worked in mills and melt shops, and another 68,000 in steel fabrication.  Contrast that with the emergence of a new line of business from 2007 on.  (I'm not sure if a smart 'phone existed in 2007, let alone a program -- in contemporary parlance, an "app" -- for one.)

The demand for applications for everything ranging from games to quantum physics has created 466,000 jobs in the U.S. since 2007, according to an analysis released Tuesday by technology trade group TechNet.

The estimate counts 311,000 jobs at companies making the apps and another 155,000 at local merchants who have expanded their payrolls in an economic ripple effect caused by increased spending at their businesses.

The study asserts this so-called "app economy" is still in the early stages of a boom driven by the mobile computing and social networking crazes unleashed by Apple Inc.'s iPhone and Facebook's online hangout.

Perhaps we're seeing the next Tech Bubble. On the other hand, Via Media proposes that steel's productivity gains are a way of releasing resources for other uses.

Jobs are disappearing in manufacturing and the learned professions for the same reason they disappeared from agriculture 100 years ago: productivity is rising. Fewer hands were needed back then to produce the food we ate; fewer hands are needed today to make all the cars and cell phones the planet’s consumers care to buy. Fewer humans in green eyeshades are needed to do the world’s accounting; fewer typists, stenographers, clerks and managers are needed to get the world’s clerical work done.

There will be plenty of destruction amid the creative, as the essay concedes, but the future need not be one in which a few hedge fund managers get rich and the rest of the population scrapes by in retail, or grading papers with the assistance of an algorithm, or is immiserated because so few people are Making Things.

For some, this point is hard to grasp.  It’s common to hear people argue that if Americans aren’t “making stuff” anymore, the economy must fail. This is the modern equivalent of the physiocratic fallacy in 18^th century France and the populist fallacy in 19^th century America. Those groups shared the idea that it was the makers of food – the ultimate “stuff” – who created real value; every other economic activity was in some way a parasite on the sturdy farmers and yeomen who fed us all.

It is true enough in its way; if there is nothing to eat the nation’s wedding planners are going to have a hard time. But the “food fundamentalists” missed the big productivity point: if it takes fewer and fewer people to grow the food we all need, the non-food sector of the economy can, should, and even must grow.

Now that manufacturing is being transformed by the same forces that revolutionized the agricultural business, we have to face a similar set of facts. Making “stuff” may still be the basis of everything else, the foundation of the whole economy, but fewer and fewer people are required to make manufactured goods the world wants, and our future needs will have less to do with stuff and more to do with arrangement, delivery, intelligence, capability and design. And a lot of our economy won’t be about making things at all; it will be about enjoying the freedom that comes when less and less of life revolves around getting the necessities.

Some of that freedom might come in the form of shorter working hours: the forty hour workweek is no more sacred than toiling six days and milking the cows before and after church on Sunday was.

Many of the dystopian fears about the future that lead people to cling to blue model ideas — and the belief that mass manufacturing employment is the only conceivable model that can provide good living standards — are rooted in this concern that the economy is all about the hard stuff. There are fears that we will transition from a world of well paid steelworkers in secure lifetime jobs to a world of baristas and waiters without money, without respect, and without any kind of security or dignity.

Again, this is pretty much what people thought when the family farm was on the ropes.  Without agriculture as the mainstay, America would become a nation of paupers. The dignity and self-reliance of the farmer would be replaced by the dependent, pauperized masses toiling anonymously on the assembly lines. Wages and living standards would precipitously fall; American democracy was at risk, a choir of worried voices proclaimed, as the country split into a small group of capitalist haves and a large group of wage-slave have-nots.

The factory jobs that are now hailed by the nostalgists as bulwarks of working class independence and self respect were once denounced by the farm nostalgists (and the utopian Marxists) as anonymous, soul killing jobs. Outdoor farm work was healthy and life affirming. Factory work was the opposite. Americans wouldn’t just lose their affluence as the farms failed and they moved to the cities, they would lose their dignity and their humanity in the brutal, depersonalized factory environment.

The transition, however, is not always easy. Taken together, however, the essay has potential as a response to the worst fears of Manufacturing America about the shape of the world to come.

Keeping an eye on Manufacturing America has other benefits.  I doubt that any university gathering will feature promotional flyers for the Midwest Smoke Out.  Premium cigars, beer from Three Floyds and ShoreLine Brewery -- tempting.