Evan Soltas has a very good post on a subject we often discuss in this space, and that Dani Rodrik and Barry Eichengreen, Donghyun Park, and Kwanho Shin have shed light on in a global context — as manufacturing grows more productive, workers tend to shift to services, where productivity gains are far more difficult to achieve. This is part of why fast-growing economies, which often benefit from a sectoral shift from subsistence agriculture to export-oriented manufacturing coupled with a demographic dividend, slow down once they reach a certain level of affluence.
Though I don’t believe that a “brown jobs” revolution is the answer to our employment woes, the jobs question does bring to mind a recent political initiative in Utah, where the legislature recently passed a law demanding that the federal government transfer ownership of an extraordinary 30 million acres of public land to the state government, which in turn would pursue energy development. The exploitation of mineral resources is relatively labor-intensive, though of course it is likely to grow less so over time. While I don’t think employment growth is or should be the central reason to encourage more aggressive energy development, it does strengthen the political case for it.
In Power Hungry, Robert Bryce noted the following:
In the rest of the world, the king or the state decides which resources get drilled and when. The individuals who own or occupy the land where the drilling is occurring have little or no financial interest in the outcome. By contrast, in the United States, mineral owners are motivated to exploit their minerals. That helps to explain why the United States—despite the fact that it is the most-drilled country on the planet—has the most dynamic and innovative industry. Over the past century, about 1.7 million oil and gas wells have been drilled in America. No other country comes anywhere close to that level of prospecting. The oceans of natural gas in the Barnett Shale, the Haynesville Shale, and other formations would likely never have been developed if that gas had been owned by the federal or state government. Individuals and entrepreneurs persist in developing new drilling and completion technologies because it’s in their interest to do so. The more they produce from the properties on which they lease or own the minerals, the more money they make.
This dynamic doesn’t apply to land owned by the federal government.