[bumby]

I believe the idea is to support the “real” economy vs a “paper” economy. The “real” economy manufactures stuff in meat space instead of making value through abstractions like financial derivatives. The real economies are tied to a stronger middle class and national security. That’s the thesis as I understand it.

[culi]

A service-based economy is also a "real" economy and not a "paper" economy

[WarmWash]

The fundamental problem is the asymmetry of value creation. Software is perhaps the pinnacle of this, and why tech companies are so unfathomably wealthy.

A team of 10 SWEs can create a product worth $1B with the cost of 10 laptops. You get ten people worth $100M each.

To create $1B in value with any kind of manufacturing business, is going to take hundreds of people utilizing millions in various costs. You end up with something like 10,000 people worth $100k each once you wind your way through all those supply lines.

[bumby]

You said it better. I think the idea is that certain "paper" economies are disproportionately valued in the economy when the dollar is strong. A strong dollar leads to offshoring manufacturing, which leads to an over weighted "paper" economy, which leads to an eroding middle class.

[bumby]

I agree, depending on what services you’re speaking of. Although I don’t know that it meets the explicit aims of the heritage foundation (which was the OPs question).