The Impact of Robotics on the Economy.

For years, robots in industry have made it possible to automate simple tasks. This has not yet resulted in higher unemployment, but the assertion is that this will change.

The additional prosperity will therefore end up with a few, the owners and managers of (large) companies. Initially, the gap between rich and poor will further increase. First, the less educated will lose their jobs and there will be no replacements for them. In the Netherlands, they will fall into the unemployment safety net and welfare system. In other countries such as the USA, this will lead much faster to severe poverty. It is therefore not hard to imagine that this could lead to massive discontent and perhaps even revolutions. Hopefully this is only an interim period during which policymakers make adjustments so that everyone can benefit from increased prosperity. Drafting and implementing effective policy is crucial to shape this transition.

But ultimately this development cannot be stopped, simply because it is possible and AI and automation can generate a lot of money and power.

Wealth redistribution

If, in the end, even the highly educated are forced into unemployment by artificial intelligence, the government will be compelled to intervene. It can do so by redistributing wealth between the (by then) super‑rich and the unemployed. Because the national government will no longer have sufficient influence over multinationals, this will require cooperation. Let’s assume a positive outcome and that we eventually manage to achieve it. We would then live with great freedom, leisure time and prosperity until the moment the last job is replaced by smarter robots. At that moment, or just before, the economy as we know it disappears and everything becomes free. Robots produce everything, including extraction of raw materials, and because they demand no compensation they do it at no cost, 24 hours a day, 365 days a year. Prices of products and services therefore keep falling, eventually reaching zero.

And then?

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

Will a shadow economy then arise, as currently exists between the underworld and the upper world, or will we try to differentiate ourselves in other ways? At the moment I don't know; what I do know is that the scenario above 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.

But if we handle it well, we can actually achieve exactly what we have always wanted: more free time and enough income to lead a good and fulfilling life. I therefore find that idea worth continuing to invest in innovation.

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