I was just reading up on the three-sector model that we’ve been talking around. It breaks down into primary (raw materials), secondary (manufacturing), and tertiary (service). In this model, the secondary and tertiary tiers are essentially adding value onto the previous tier. It doesn’t make them lesser, just different. The theory goes that over time, economies develop from mostly primary, then secondary, and finally tertiary.

That model has come in for criticism as being outdated. One proposed additions is a quaternary sector that is unconnected to the other sectors. Instead it deals with knowledge like R&D, IT services, and entertainment. Another is the quinary sector, with human-oriented activity like NGOs, governments, education, child care, and healthcare.

China is just a few steps behind other countries in their mix of sectors. It is rapidly developing towards a country with less of a mix of manufacturing and more of a mix of the higher level tiers. That is good and desirable for the people of China.

Now, housework. The argument in favor of including things like housework is more that economics was founded by men with men in mind. They weren’t necessarily thinking of “women’s work” as something with much value. Factoring it in attaches a value, regardless of who actually does it.

It also provides a more accurate picture. Let’s say someone has a choice. In scenario A, they stay home, cook, clean, raise the kids, and generally act as homemaker. In scenario B, they have a job, pay a cleaning service, buy prepared food, and send the kids to daycare. If you’re just measuring GDP, scenario B is going to be clearly better because more transactions happen. But if you measure their labor in scenario A, you will get a clearer picture.