Robotics' Economic Impact

For years, industrial robots have automated simple tasks. So far, this hasn’t led to increased unemployment, but the prevailing argument is that this is about to change.

The increased prosperity will therefore accrue to a select few: the owners and managers of (large) companies. Initially, the gap between rich and poor will widen further. First, those with lower education levels will lose their jobs, and no replacements will emerge. In the Netherlands, they will fall into the safety net of unemployment benefits and social assistance. In other countries like the USA, this will much more quickly lead to bitter poverty. It’s not hard to imagine that this could lead to enormous discontent and perhaps even revolutions. Hopefully, this is just an interim period during which policymakers will make adjustments so that everyone can benefit from increased prosperity. Developing and implementing effective policies is crucial to shaping this transition.

Ultimately, however, this development is unstoppable, simply because it’s possible, and because AI and robotization offer significant financial gain and power.

Redistribution of Wealth

If, eventually, even highly educated individuals are forced into unemployment by artificial intelligence, governments will be compelled to intervene. This can be achieved by redistributing wealth between the (by then) super-rich and the unemployed. Since national governments will no longer have sufficient influence over multinationals, this requires cooperation. Let’s assume a positive outcome, and that people will ultimately manage to achieve this. We will then live with great freedom, leisure, and prosperity until the last job is replaced by smarter robots. At that moment, or just before, the economy as we know it will disappear, and everything will be free. Robots make everything, including the extraction of raw materials, and because they demand no compensation, they do it free of charge, 24 hours a day, 365 days a year. The prices of products and services will therefore continue to fall until they eventually reach zero.

And then?

The economy has disappeared; being rich is pointless because everything is free.

Will a shadow economy emerge, as currently exists between the underworld and the legitimate world, or will we try to distinguish ourselves in other ways? Currently, I don’t know, but what I do know is that the scenario above is realistic, and that we must be prepared for both the period between now and the disappearance of the economy, and the period thereafter.

However, if we handle it well, we can achieve precisely what we’ve always wanted: more free time and enough income to lead a beautiful and fulfilling life. I believe this thought makes it worthwhile to continue investing in innovation.