Wikipedia defines capitalism as: " Capitalism is an economic system based on private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment is determined by the owners of the factors of production in financial and capital markets, and prices and the distribution of goods are mainly determined by competition in the market." There are owners owning the means of production such as machinery and resource inputs, there are laborers, there is a pricing system and there is a competitive market. But what if robots and software takes over the world, doing all of the work? Do we still have a market?
The experts say that in about 20 years (probably 15 now since I must have read this 5 years ago) roughly 50% of the jobs will be automated so that means possibly 50% unemployment if no new types of jobs appear that computers can't do to replace those lost. As a point of comparison, the Great Depression had roughly 30% unemployment, depending on where you lived. That
generated social unrest that gave rise to Hitler and World War II. I can't even imagine what 50% unemployment would do. What kind of market would we even have?
But that 50% job automation is probably the first stage and the experts dare not speculate further because that 50% mark is already too terrible to contemplate. When you get to that 50% stage, the machines are getting pretty darn smart. So far, this is what I have read that is coming down the pipe: driverless cars which means being able to sense objects and people around you, ability to do scientific research and come up with new theories much faster than humans, deploying creativity to create new music, take over the project management and other managerial roles, performing analysis much faster and better so take over decision-making roles too. What will be left for humans to do? That 50% will rapidly move toward 90/95/99% automated because machines learn so much faster than humans and they probably will extend beyond what normal humans learn. And the tech boys are working very hard to give them sight, hearing and speech.
The owners of production will move as far towards automation because the relatively low cost is too tempting.
So what kind of market will we have if 90, 95 or 99% are unemployed? I would say that at some point the current concept of market and probably capitalism crashes because with that many unemployed, market has to cease. Basically, if all of the goods and services in the world are being provided by the machines and software at such low cost, then all goods and services will probably have to become free. Or we may have some combination of basic income level and free goods. It is quite possible that society would argue that the owners of such factors of production are not really producing such wealth; it is the machines and software, developed with the help of regular people at an earlier time, creating the wealth.
So with everything free, what would we do? Would we spend our time doing stuff that we are passionate about? We could be creative and solve bigger problems or create things of beauty. Would we be extraordinarily lazy and just spend our time Twittering and Facebooking? Or would we engage in endless wars because we have nothing to do to engage our attention and keep us out of trouble?
Life could be really good or really awful. But that's a couple of generations from now. We have to get through the intervening stages of social strife and revolutions (possibly). And get past climate change and the Trump era.
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