The myth of the service economy—An update

In this journal the myth of the advancing service economy was exposed already in 1977 by Jonathan Gershuny, “POST-INDUSTRIAL SOCIETY: The myth of the service economy”, Futures, April 1977. However, that lesson seems to be forgotten, because with the traditional production sector division in the national accounts, based on the nature of the work, the statistics of relative value added and employment continue to support the old myth.In this paper it is shown that from the point of view of final output use, the ratio of the total value of the output of material goods to the total value of the output of immaterial services is 63:37 in Sweden, and has remained the same for 30 years. This is nearly the reverse of what is officially maintained based on the growing proportion of work in the economy which can be characterized as “service work”. It is argued here that the conventional view obscures a main issue for the future of the welfare states. Sweden and several other similar countries have got far behindhand as regards the proportion of resources going into the provision of income-elastic services like health and education, which is just the opposite of the original main idea of the welfare state.