The impact of robotics on the economy.

For years, robots in industry have automated simple tasks. While this hasn’t led to widespread unemployment so far, the argument is that this is about to change.

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. First, the lower-educated will lose their jobs, and no replacements will emerge for them. In the Netherlands, they will end up in the unemployment benefit system and social assistance. In other countries, like the USA, this will much more quickly lead to abject poverty. It is therefore not difficult to imagine that this could lead to immense dissatisfaction 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 policies is crucial to shape this transition.

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

Redistribution of Wealth

If, ultimately, highly educated individuals are also 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. Because national governments will no longer have sufficient influence over multinationals, this requires cooperation. Let’s assume the positive and that this can eventually be achieved. 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. Robots will make everything, including resource extraction, and because they demand no compensation, they will 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 will have disappeared; being rich will no longer be useful because everything is free.

Will a shadow economy emerge, like the one that exists between the underworld and the upper world now, or will we try to distinguish ourselves in other ways? Currently, I don’t know. What I do know is that the scenario described above is realistic, and we must be prepared for both the period between now and the disappearance of the economy, as well as the period after.

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