Quote:
Originally Posted by ADL Colin
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Why do you think that a manufacturing based economy is more sustainable than a service based one? Is that what you are saying?
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Suppose there is a small town whose businesses provide services for farmers surrounding the town. Suppose a factory that manufactures widgets is built near the town. The town increases in population as more and more businesses are created to provide services for more and more people that are employed by the widget factory. Farms are being sold so that housing projects can be built to provide the increased population with housing and suburbs are built with more businesses to provide services to the ever growing population.
Then at some point in time the widget factory that has been relying heavily upon credit from its inception through its expansion finds that it has over extended itself, declares bankruptcy and goes out of business. The towns businesses that provide services now do not have anyone to provide services to as the people that paid for these services do not have an income. The farmers sold their farms to the expanding townsmen so businesses that provided them services are not needed so the town cannot even revert back to its agricultural based economy.
Of course the other scenario is that the Widget factory simply moved its operation overseas to reduce its overhead and increase its profits. Either way the town dies as it no longer has an agricultural/manufacturing base to provide services to.