Spreading wealth to maintain consumption

What will happen if robots, AI, and automation displace a huge percentage of workers. How will there be enough consumers to buy all the goods and services produced if there is a big drop in earnings?

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Image Credit: Boston Consulting Group

If you’ve been keeping up with articles about technology, you know that automation, robots, and artificial intelligence are the biggest threat to employment of humans in the United States. What will happen to our society if (as we can imagine) 50 percent or more of humans in our country were unemployed?

Employment is an important part of our lives. It is the mechanism by which we earn the access to goods and services in order to live. And our careers are important in making us feel useful. If wee didn’t have jobs, society would have to give us the money needed to keep from starving.  And if we didn’t have careers, we would have to find entry to the arts, sports, or other things to keep us busy and feeling worthwhile.

As production becomes more and more automated, the owners of production will find that goods and services of all kinds are harder to sell, because the general population has no money. The only solution will be governmental or charitable programs that use the excess production to support the non-workers. But simply providing goods and services is not enough. There needs to be activities which engage non-workers and make them feel worthy. Otherwise, they will feel that their lives have no meaning, and this may lead them to lives of crime or rebellion.

Can these goals be attained in our capitalist society, in which wealth (and the right to control production and consumption) becomes ever more concentrated in the hands of fewer and fewer people?  It can only be achieved by either forcing the spread of wealth from the rich to the poor or by far greater charitable giving.

“There’s a new bar for wealth in America: Nine homes and 19 cars. That’s the average number of residences and vehicles owned by the average “ultra-high net worth” individual, according to a new study from AIG, which detailed the assets of the insurance company’s richest U.S. customers.” The wealthy control where production goes, and they turn that into large homes and many cars.  Of course, they turn it into a lot of other things: jewelry and art collections, huge amounts of excessively rich clothes, money to control politics, and so on. And these expenditures go forth, ever less money go to the poor who cannot find jobs and access to goods and services.

The answer is mechanisms to spread the wealth – whether by charitable giving or increased taxation of wealth  If the wealth is not spread, then who will consume the increase in production that automation, robots and artificial intelligence will produce?

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