The impact of robotics on the economy.

For years, robots in industry have been automating simple tasks. Up to now, this has not led to higher unemployment, but that is about to change, the argument goes.

The extra prosperity will therefore end up with a select few, the owners and managers of (large) companies. Initially, the gap between rich and poor will widen further. Lower-educated workers will lose their jobs first, and no replacements will be found for them. In the Netherlands, they will end up in the unemployment and social assistance safety nets. In other countries like the USA, this will lead to bitter poverty much more quickly. It is therefore not hard to imagine that this could lead to immense dissatisfaction and perhaps even revolutions. Hopefully, this is just an interim period during which policymakers make adjustments so that everyone can benefit from increased prosperity. Formulating and implementing effective policy is crucial to shaping this transition.

Ultimately, however, this development is unstoppable, simply because it is possible and because a great deal of money and power can be achieved through AI and robotization.

Redistribution of wealth

So when higher-educated workers are eventually also forced into unemployment by artificial intelligence, the government will be forced to intervene. This can be done by redistributing wealth between the (by that time) 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 that they eventually manage to pull this off. We will then live with a great deal of freedom, free 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. After all, robots make everything, including the extraction of raw materials, and because they demand nothing in return, they do so free of charge, 24 hours a day, 365 days a year. The prices of products and services will therefore drop lower and lower until they eventually reach zero.

And then?

The economy has disappeared; being rich no longer serves any purpose because everything is free.

Will a shadow economy emerge, much like the one that currently exists between the underworld and the upper world, or will we try to distinguish ourselves in other ways? I do not know right now, but what I do know is that the above scenario is realistic and that we must be prepared both for the period between now and the disappearance of the economy and for the period thereafter.

However, if we handle this well, we can achieve precisely what we have always wanted: more free time and enough income to live a wonderful and fulfilling life. That thought is precisely why I find it worthwhile to keep investing in innovation.

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