The impact of robotics on the economy.

For years, robots in industry have enabled simple work to be automated. Until now, this has not led to greater unemployment, but the assertion is that this is about to change.

The extra prosperity will therefore accrue to a few, the owners and managers of (large) companies. Initially, the gap between rich and poor will therefore continue to widen. First, the less educated will lose their jobs, and there will be no replacements for them. In the Netherlands, they will end up in the safety net of unemployment insurance and social assistance. In other countries like the USA, this will lead to bitter poverty much faster. It is therefore not difficult to imagine that this could lead to enormous dissatisfaction and perhaps even revolutions. Hopefully, this is only an interim period during which policymakers make adjustments so that everyone can benefit from increased prosperity. Developing and implementing effective policy is crucial to shaping this transition.

But ultimately, this development cannot be stopped, simply because it is possible and a great deal of money and power can be achieved with AI and robotization.

Redistribution of wealth

If, eventually, even the highly educated are forced into unemployment by artificial intelligence, the government will be compelled to intervene. This can be done by redistributing prosperity between the (by then) super-rich and the unemployed. Because the national government will no longer have sufficient influence over multinationals, this requires cooperation. Let us assume the positive and that they eventually manage to achieve this. We will then live with much freedom, leisure time, and prosperity until the moment the last job is replaced by smarter robots. At that moment, or just before it, the economy as we know it will disappear, and everything will be free. This is because robots make everything, including the extraction of raw materials, and because they demand no compensation, they do so cost-free, 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 useless because everything is free.

Will a shadow economy emerge, similar to the current divide between the underworld and the upper 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 described above is plausible and that we must be prepared for both the period leading up to the disappearance of the economy and the period afterward.

But if we handle it well, we can actually achieve exactly what we have always wanted: more free time and sufficient income to lead a beautiful and fulfilling life. I find that thought worthwhile for continuing to invest in innovation.

Recently, this Economou shared his vision on what must and will happen when AI is more efficient than humans in many areas.