[mrow84]

Here is yet another trick: situating the creation of wealth primarily in the exchange of goods, implicitly devaluing the act of producing the goods in the first place; treating allocation as the primary problem, with production a mere by-product.

The line of thought typically proceeds by claiming that it really is the exchange that makes the wealth, because it only after exchange that the person who wants to use a thing can actually get their hands on it. However this is misleading, because production is necessary before exchange can take place.

The idolisation of the problem of allocation structures the world in a particular, and not inevitable, way, with many unsavoury properties. Allocation favours fungibility, as a tool for reducing the time needed to exchange, creating immense difficulties in valuing the act of production itself, because one line of production can just be exchanged for another. This abstraction over production removes almost all incentive to consider the future, or to plan for catastrophe, something we see visibly in the response of allocation-focused countries to the current pandemic, and in their willingness to attempt to mitigate, or even to prepare, for the consequences of human-induced climate change.

[zrobotics]

While I want to agree with the general gist of your argument, there is value created in economic activities besides production. For example, operating a pick & pack line to ship goods to end-consumers is labor intensive.

Speaking as someone who supports such an operation, shipping to end-consumers is expensive. None of the manufacturers I order from want to be in that business, they want to operate assembly lines and ship out truckloads at a time.

While my job is the classic 'middleman' in the supply chain, there is value provided that we do generate. The manufacturers I work with understand this as well; if they wanted to sell to end consumers it would be easy for them to cut us out. All they need to do is to advertise, package, and ship out individual products and provide support for those purchases.

Producers (read: manufacturers) want predictable demand and have long lead times. If I am running out of a product, my lead time is 8-12 weeks coupled with a sizeable minimum order. No end consumer wants to deal with placing an order for 26 skids of product and waiting 2 months. Specialization means some firms produce things and are good at it, others distribute those goods. Distribution is its own challenge, and takes specialization.

There are very few manufacturers an end-consumer can order goods from, for very good reasons. Honestly, I can't think of a single manufacturer that ships direct to consumers; even most alibaba 'factories' are intermediaries (and alibaba itself also acts as a retail channel).

[mrow84]

Yes - I have a tendency to waffle, and it seems that editing came at the expense of my actual opinion, namely that a concern for both production and allocation is vital for a stable society.

Significant advantage has been found in organising redistribution of goods (and services, another important mechanism of wealth production, as pdonis mentioned in a sibling comment), and it clearly isn't something to be ignored, my point is only that a lot of the contemporary approach to thinking about economies focuses almost entirely on allocation/distribution - production is taken as a given, driven largely by demand through the allocation mechanism.

And to clarify - it is not even the first order effects (e.g. worse conditions the closer you are to "mere" production) that I find most concerning (though they are serious issues), but the higher-order effects of how society manages and maintains its productive capabilities, and prevents them from causing longer-term harms, simply because those harms aren't handled by the system of allocation.

The common response within the current mental framework is to try and manage those harms through the allocative system, by creating markets for them, but fundamentally the incentives simply aren't there in the way that they are for the allocation of things people want - they have to be coerced, and so people try to game the system.

No easy answers, unfortunately!

[pdonis]

> situating the creation of wealth primarily in the exchange of goods, implicitly devaluing the act of producing the goods in the first place

Producing goods and services also involves exchanges, but it's a fair point that there are other activities besides direct trades that can create wealth, yes. Transformation of raw materials into finished products also can. So can providing services.