This article is the first in a series of upcoming articles labeled with the term ‘economy’.
This first article starts with a conclusion:
In the end we all somehow seem to work at the service of the primary, secondary and quaternary sectors. Not always directly, but indirectly we all sure do. We all work to provide the essence of our basic needs and the discovery of who we are. Food, drink, clothing, reproduction, shelter, protection, communication, basic infrastructure, health, … all these elements are located at primary and secondary levels. The whole services sector is build around the first two layers. Whether it’s accounting, legal, HR, IT, marketing, … , it’s all about optimizing the first layers.
Mapping every job back to the first sectors. While I know it may be far-fetched, it is not entirely untrue.
car salesman sells a car > buyer uses it for work > buyer works at feed company
pilot > logistics of persons > person in plane travels to mining site of company > mining
person gets sick > doctor improves health > person productive at work > person works for software company to program PLCs > programs are used in food factories to automate the production line
…
overview of the different layers in an economy.
The world in sectors
The richer a society, the more automation, the less people are working in the primary sector. Richer countries often times have a lot of productive farming land or are rich in other raw materials as for example oil and gas. Richer countries have huge services sectors.
Development countries are often times rich in raw materials but often have limited production capabilities to build finished end products themselves. The poorer a society the more people are working in agriculture and the primary sector. With production lines becoming more accessible, more flexibility and designs made to be modular, there is hope for development countries to create transitions. The potential for small hybrid, modular production plants can play a key role in the launch into secondary sectors.
In a very shortcoming view of the world (as of 2023, the world is constantly changing), Africa and Latin America are often times seen as mining hubs. Asia is a production hub. Europe has limited raw material hubs and is built around the service industry. North America has raw materials but also has a huge services sector.
Green is agriculture, purple is industry. Map on the right is about poverty lines. Data from old Dutch world atlas book.
There is a correlation between the richness of a society and it’s level of industrialization. Deindustrialization leads inevitably to a poorer society!!
A very interesting trend we see is that once a country manages to develop by industrializing, it starts to deindustrialize, outsource to cheaper development countries, the services sector starts to grow.
Primary sector
In the first layers of an economy we see mining, agriculture and farming as the main components. It provides the essence of our needs. While some economies map mining as a secondary sector, I added it here in the primary sector because I see energy, metals, minerals,.. as crucial components in the functioning of modern day society.
There are huge differences in each sector and place. Some workplaces are highly automated and require robots, machines, … this makes them capital intensive, limits physical labor but require people with high education levels. The opposite is true to, little machines, low education standards and less capital require a lot of physical work, often times against low wages and poor health conditions for the workers.
Farming evolution
Farming and agricultural sectors have evolved and became factories. The days of the small farmers, where 80%+ of the world population was able to survive and live from owning a few cows, a sheep and farming some land are a long time gone. It gives me double feelings. On one hand, living from a few cows, it is amazing how people were able to live from literally just that. On the other hand, it is not fun spending weeks on end on the land, just to harvest some wheat by hand.
Looking at how cows are fertilized these days or how soybeans are grown in Brazil, there are many challenges for the sustainability of our future. The more I think about it, the more it becomes a question about capitalism in general.
Infrastructure
I see infrastructure as a primary sector. It provides shelter. Our basic needs are dependent on them, whether it is for internet, water of energy. Factories are building blocks for food production and processing in modern day society. It is not possible to just go to the woods and grow our own food there. Property laws prohibit that. We are highly dependent on this giant web called ‘modern society’ for our own survival. The moment internet or energy fails the whole web collapses.
The secondary sector
In a later stage, we see the production of goods. Processing/production lines are a foundational component of this sector. It is a sector shaped by the production of any goods. From machines and cars to defense materials, from computers to the pharma industry. There is so much stuff that gets produced every single day.
The tertiary sector
The services sector is by far the biggest sector in most modern countries. The sector is indirect at the service of the primary, secondary and quaternary sector. Every day more and more. The industry is being automated more and more. Capitalist principles apply. As jobs in a primary sector diminish, it is necessary that the jobs in the services sector increase. Most jobs these days fall under this sector.
The Quaternary sector
These services are often times subsidized by the government. They are set up to protect our safety, our health, our beliefs, our culture, our environment, set up scientifical research and so do much more.
This sector lives in public and private worlds but also overlaps.
Scientifical research is financed by companies as well as governments.
The defense industry has private companies but must cooperate and align with the interests of governments.
Public hospitals as for example are in a lot of countries poorly managed, underfunded and miss capacity. People with money there go to the private hospitals.
This sector is marked by being pretty capital intensive.
Upcoming articles in the economy series:
The centralization & formation of big companies: layer formations from small entrepreneurs to big multinational companies
Outsourcing trends since the mid-20th century
‘subsidized by the government’, lobbyist influences, state support, no such a thing as a free market economy; a world somewhere between capitalism & state guided economies
Central bank interferences
The schemes can be found on my GitHub.
List of different jobs (in Dutch)