[bunderbunder]

I don't think one needs to be so pessimistic about it.

The historical trend is that as technology improvements have reduced the need for human labor in industries that used to be big employers, humans think up new and exciting ways to put the excess labor force to use.

When we look back on the era of cottage industry, we don't remember it as a golden age of high employment. We remember it as an era where the standard of living was lower because the huge amount of human labor that went into textiles meant that they were comparatively expensive. So expensive that after people were done paying to clothe themselves they had little money left for other consumer goods such as clocks, books, or glassware.

Similarly, we don't look back on the era of peasant agriculture as a time when every able-bodied person was virtually guaranteed a job in the thriving agricultural industry. We remember it as an era where most everyone was tied to the land and eked out their lives doing backbreaking labor.

As for whether the service economy can replace the manufacturing economy, I don't think that's a question we need to speculate on. Looking back on the past few decades of American economic development, it's clear that it already has. And that employment rates in the USA have remained relatively high throughout that process.