'There are three ways of losing your money,' commented the French millionaire Rothschild in the middle of the nineteenth century, 'women, gambling and engineers. The first two are pleasanter, but the last is much the most certain.'1 The odd thing about this remark is that it was made by a man of undoubted financial acumen at a point in history where, in Britain at least, engineers were about the most profitable investments you could make. It makes sense only when we remember that industrialisation in France lagged half a century or more behind the industrial revolution in Britain. This throwaway comment then becomes an interesting reflection on the structure of pre-industrial economies.

Until the mechanisation of industry overturned things completely, it was not manufacturing but commerce which dominated the thriving market economies of the seventeenth and eighteenth centuries.2 This domination was reflected in the relative wage structure of merchants and manufacturers: in 1760, the poorest class of merchants in Britain earned as much as the richest class of 'master manufacturers'.3 And until the eighteenth century, this structural division of the economy was also reflected in the social and political hierarchy.4

The industrial revolution changed all that. Mechanisation, the exploitation of mineral resources, the centralisation of production, and massive reorganisation of labour created a new class of rich and powerful industrialists in Britain, and overturned the historical struggle between manufacture and commerce for more than a century.

By the twentieth century, manufacturing was again in relative decline in Britain. Her domination of the world markets for coal, iron and cotton had already been usurped by the expansion of the other industrialising nations: the USA, Germany, France and later Japan in particular. The commercial sector—later known as the service sector—of these powerful, expanding Western economies thrived, as it were, on the back of industrialisation, becoming increasingly more important to the developed world in the second half of the twentieth century. The economic boom of the 1980s (see Figure 8) owed much to the rapid expansion of the service sector. This transition was significant enough to prompt a new description of the industrialised nations as 'service economies'.

These changes in the fortune of different economic sectors are informative not least because they tell us that the industrial economy is a dynamic entity. It is continually changing in sectoral composition, and sometimes undergoes significant reorientations in its profit base. These reorientations have not always led to improved environmental performance. The industrial revolution itself provides ample evidence of that. Nevertheless, the changes themselves indicate that qualitative economic development is not only possible but to some extent expected within the existing economic paradigm.

The aim of this chapter is to articulate a particular avenue for qualitative development of the industrial economy. The proposed transition has as its focus the idea of dematerialisation of the economy: improvements in material efficiency which reduce both the resource requirements and the environmental impacts of human activities. The emerging vision is of a new service economy.5 This new service economy is not an extension of the 'boom and bust' economy of the 1980s. Neither is it a return to the commercial basis of pre-industrial times. Instead, it is based explicitly on the concept of service which I described in Chapter 4. And it employs many of the specific strategies for preventive environmental management which have been outlined in previous chapters of this book.

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