The Impact of Robotics on the Economy

For years, robots in industry have made it possible to automate simple tasks. So far, this has not led to higher unemployment, but the proposition is that this will change.

The additional prosperity will therefore accrue to a small group: the owners and managers of (large) companies. Initially, the gap between rich and poor will therefore widen further. Lower-skilled workers will be the first to lose their jobs, and no replacements will be available for them either. In the Netherlands, they will end up relying on unemployment benefits and social assistance. In other countries, such as the United States, this will lead to bitter poverty much more quickly. It is therefore not difficult to imagine that this could result in enormous discontent and perhaps even revolutions. Hopefully, this will only be an interim period during which policymakers 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 cannot be stopped, simply because it is possible and because AI and robotization can generate so much money and power.

Redistribution of prosperity

If, ultimately, artificial intelligence also forces highly educated people into unemployment, the government will be compelled to intervene. It could do so by redistributing prosperity between the (by then) super-rich and the unemployed. Because national governments will no longer have sufficient influence over multinationals, this will require cooperation. Let us assume the best and suppose that this can ultimately be achieved. We would then live with plenty of freedom, free time, and prosperity until the last job is replaced by smarter robots. At that moment, or shortly before it, the economy as we know it will disappear and everything will be free. After all, robots will make everything, including the extraction of raw materials, and because they demand nothing in return, they will do so free of charge, 24 hours a day, 365 days a year. The prices of products and services will therefore continue to fall until they ultimately reach zero.

And then?

The economy has disappeared; being rich is no longer useful because everything is free.

Will a shadow economy then emerge, as there is now between the legitimate and criminal worlds, or will we try to distinguish ourselves in other ways? I do not know at present, but what I do know is that the scenario described above is realistic and that we must prepare both for the period between now and the disappearance of the economy and for the period afterward.

If we handle it well, we can actually achieve exactly what we have always wanted: more free time and enough income to lead a beautiful and fulfilling life. I therefore believe that this idea is worth continuing to invest in innovation for.

Recently, this Economou shared his vision of what needs to happen—and what will happen—when AI becomes more efficient than humans in many areas.