Passing through the anus of the services economy

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Domainfax traffic yesterday was dominated by an huge story about Melbourne coffee:

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The manager of a Melbourne cafe at the centre of a social-media storm in a coffee cup says its controversial “deconstructed” brew is aimed at the city’s notorious coffee snobs, not hipsters.

Writer Jamila Rizvi shared a photo on Facebook of an unusual coffee she was served at the Abbotsford cafe, which came to the table in three separate beakers on a wooden paddle.

“Sorry Melbourne but no. No no no no no,” Rizvi wrote on Tuesday.

“I wanted a coffee. Not a science experiment.”

Within 48 hours Rizvi’s post had received more than 21,000 likes and been viewed more than 2 million times.

Lisa Wearmouth, who manages the cafe within South African furniture store Weylandts that served Rizvi’s coffee, rejected claims the deconstructed coffee was a sign “hipsterism” had gone too far.

Ms Wearmouth said the coffee Rizvi ordered was actually a deconstructed long macchiato, not a flat white.

It would be very easy to poke fun at the Seinfeldian seriousness of this trivial discourse. The people involved in the story are ludicrously earnest while engaged in the most asinine of pursuits. We could dismiss this generation of caffeinated navel gazers with a flick of the pen, feel superior for a bit, and be done with it.

But I’m not going to do that. On the contrary. I’m going to take this discussion far deeper than these trifling millennials would think possible.

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I first read this story yesterday as I awaited a back massage at my local shops (in Melbourne’s inner west). The massage is a vital part of my weekly routine lest my back petrify into a block of stone owing to sitting here palavaring with you all day.

It struck me as I sat there that it was wonderfully convenient to have a Thai massage joint just around the corner, especially given my local shops are not very large. I briefly surveyed the other shops and realised swiftly that what I was looking at was the lion’s share of the Australian services economy supply chain. Nearly all of it was directed not at the production of anything, nor the supply of anything, nor the inputs to some factory, but at servicing my person. Specifically, it was mostly targeted at various components of my body. There was an inordinately expensive organic grocer for my stomach. A retro barber for my head. A manicurist for my nails. A tatooist for my ink. A specialist wine purveyor for my tongue. A gift store for my birthday. A shop front personal trainer for my flab. An Asian tailor and presser for my clothes. Any number of cafes of course. And a real estate agent on every corner.

I realised that it was I that was the factory. My body, or more to the point, my mind, my intellectual property, was being supported my an extensive supply chain of services that plumped, fattened, thinned, preened, pressed, fluffed, trimmed and massaged me into the ongoing production of ideas.

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There was one thing more that was obvious. These various services were not just the slapdash Aussies of yesteryear. There were no lackadaisical loafers working for the man and hanging for a smoko. Each of the services on display was a finely crafted specialist, an artisan in his and her craft, immensely serious with extraordinary attention to detail. The massage offered a limitless array of options right down to your chosen incense and its specific impact upon your chakras. The barber wore a perfect replica suit from the 1920s and sported enormous mustaches to match. The personal trainer rippled in the window. The grocer glowed with ruddy peasant health and one could almost smell the fresh loam on her fingers. The cafe’s were a rival for Tate Modern in their timberwork and ceramics, and one could literally choose a vintage decolletage in which to hang as if riding in a time machine.

The amount of effort and innovation going into finding a competitive edge for the privilege of servicing my sagging flesh was spectacular.

Which brings us back to our “deconstructed” coffee. That cafe owner should not be criticised. She is the apotheosis of her milieu, an economic figment generated straight out of the forces of production that our betters have unleashed upon us. She is the services economy in all of its pathetically misplaced glory. Even the Domainfax fascination with the deconstructed coffee is more whirring widgets for GDP!

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And that’s the thing. All of these local shops are a hive entrepreneurial beavering. But all of them are directed inwards in an endlessly dividing paradox of insignificance. None of them is tradable, as services mostly are not, so none has the chance to flower much beyond the local shops, let alone nationally or internationally. That poses a problem for the economy because if all you ever do is service one another in more elaborately infinitesimal detail then there is no actual wealth generation going on. There was no organic capital generation, no capital deepening nor breakthrough’s in efficiency. The capital that drives this machine by definition comes from outside of it in the form of a visitor, a new buyer of a local asset or someone that has borrowed to invest.

That farcical coffee is a microcosm of Australia’s entire troubled economy. All superstructure and, increasingly, no base.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.