From Timothy W.: If, as Tom says, robots replace a large number of workers—and reduce the number of jobs—who’s going to buy those hamburgers and other products produced by robots?
From Robert W.: The rise of the robots was predicted at least a half-century ago. Futurists thought everyone would benefit.
But robots are now seen as a means for the already rich to take an even larger share of the world’s productive output. This is ultimately self-defeating. There’s no profit in selling to the poverty-stricken.
The economy is already grinding to a halt. The already-too-rich accumulate and hold even more of the world’s wealth. This causes the velocity of money to drop to levels not seen since the Great Depression… the last time all the money was in the hands of just a few.
It took World War II to redistribute the money and get the economy restarted. Will it take a third world war to get a new restart? Probably.
From Chris T.: Let’s follow the money. If you eliminate all these jobs with robots, who will be able to buy the product and pay for the robots?
In school, I was required to read Future Shock by Alvin Toffler. He used similar logic to explain how we would all be working three- to four-day weeks in the future. Yet, here we are, working more now than we did then… for less money (factoring inflation).
Our economy would already be in the dumps if it weren’t for government spending on social programs, welfare, and all that rot. The only thing keeping us from a worldwide depression is that all the world’s governments are doing the same things to postpone it.
If we aren’t careful, we’re going to end up with a society closer to that of Planet of the Apes than that of Terminator.
Reeves’ Comment: The essence of wealth creation lies in increasing productivity. Think of it in terms of a car…
A more efficient engine lets you go farther on one tank of gas. The engine’s higher “mileage productivity” means you pay less at the pump. And that means you have more disposable income left over to save, spend, or invest.
Your dollar goes further. Your quality of life has improved. Higher productivity means you’re wealthier.
The same is true of an economy overall. Higher productivity—through things like robots and automation—means you can buy more goods and services than you could before… unless you’re the hamburger cook from Tom’s example.
The gourmet hamburger robot has put you out of work. You’ll have to retrain. Perhaps you learn the skills that let you maintain and operate a “fleet” of gourmet-hamburger machines. It’s a higher-value skill than you possessed before. And you’ll receive higher pay to carry it out.
So, the problem only lies in the timing of your unemployment. Technology displaces workers and forces them to retrain for higher-value jobs.
But when a large part of the job force faces unemployment at the same time—like in the food service industry, one of the largest components of the U.S. economy—the stage is set for economic contraction.
It won’t last forever. Workers will retrain. And they’ll secure new, higher-value jobs. But the interim period can be chaotic.
Bottom line: We’re not Luddites. Technological innovation is the foundation of a wealthier world—for all. But the road to advancement is a bumpy one…