The Economics of Automation: What Does Our Machine Future Look Like?

This podcast episode delves into the inevitable rise of automation and its profound economic implications, arguing that machines are poised to render human labor obsolete in many sectors. Using the fundamental economic principle of supply and demand, the host illustrates how technological advancements, from abacuses to advanced software, continuously reduce the demand for human workers while increasing the effective supply of labor (e.g., through outsourcing). This dynamic leads to wage stagnation and job displacement, forcing remaining human workers to compete for lower wages.

The episode then explores three potential future scenarios for a fully automated world: 'The Good,' 'The Bad,' and 'The Ugly.' 'The Good' envisions a utopian society where universal basic income (UBI) frees humans for creative pursuits, funded by heavily taxed machine-owning businesses. However, this scenario faces challenges like potential population explosions straining finite resources. 'The Bad' presents a more dystopian reality with a minimal UBI, a stark divide between robot owners and a gig-economy 'peasant class,' and social unrest, exemplified by the fortress-like living of the wealthy in places like Johannesburg.

'The Ugly' scenario posits a world where the concept of human economic value is entirely eroded. Without UBI or robust social welfare, unemployable humans, whose time holds no market value, would face dire consequences. The host challenges the common belief that businesses need a large consumer base, suggesting that in this extreme future, businesses would primarily trade with each other and their wealthy owners. This could lead to massive population declines due to an inability to support children and, more grimly, starvation.

The overarching message is a stark warning about the fundamental shift in how value is created and distributed. The podcast emphasizes that while technology has historically increased productivity and worker benefits, a future where humans are no longer the primary creators of value demands serious consideration and preparation. It prompts listeners to question the very foundation of transactional economics when human labor becomes economically worthless, highlighting the potential for unprecedented societal restructuring and ethical dilemmas.

Automation is inevitable and it is coming for you.

machines and automation are coming to make EU obsolete if you don't believe me that is fine at the end of the day I am a stranger who says he is an economist on the Internet and any of those three things should make you wary of a naysayer on their soapbox screaming that the end is nigh but it really might be this time

automation for the most part is already here and it is silently and slowly pushing the working population to the wayside

as capital assets in the form of technology improve the same amount of work can be done with less and less people

most reputable economists that have been brave enough to make predictions have stated the Machine future is likely to look like one of three possible outcomes the good the bad and the ugly

humans are a drain on resources... in this post automation in the world we don't really need them to balance balance sheets real to real estate or generally made general management positions that will all be done by machines

A human that is unemployable has no economic value is a horrible thing to say and most people have a hard time accepting it but it is ultimately true

the average consumer is really not as important to the economic system as they are led to believe

what does a future look like where humans are no longer the creators of value