The Impact of Robotics on the Economy

For years, industrial robots have automated simple tasks. So far, this has not led to higher unemployment, but the argument is that this is about to change.

This additional prosperity will therefore accrue only to a select few: the owners and managers of (large) companies. Initially, the gap between rich and poor will widen further. Lower-educated workers will be the first to lose their jobs, and no replacements will emerge for these roles. In the Netherlands, these individuals will fall back on the unemployment safety net and social assistance. In other countries, like the USA, this will lead to severe poverty much faster. It is therefore easy to imagine this causing immense discontent and perhaps even revolutions. Hopefully, this will only be a transitional 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 because immense wealth and power can be achieved through AI and robotization.

Wealth Redistribution

If, eventually, even higher-educated individuals are forced into unemployment by artificial intelligence, the government will be compelled to intervene. This can be done 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 collaboration. Let's assume a positive outcome where this is eventually achieved. We will 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 will disappear, and everything will be free. Robots produce 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. Consequently, the prices of goods and services will continue to fall until they eventually reach zero.

And then what?

The economy has disappeared; being rich is pointless 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? I don't know right now, but what I do know is that the scenario above is plausible, and we must prepare for both the period leading up to the disappearance of the economy and the period after.

But if we handle it correctly, we can 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 enough to continue investing in innovation.