What happens to economics in a futuristic world?

[Reaganfan]

What will happen to our national economy and other world economies in the future if humans themselves are not needed for jobs?

If cars and trucks drive themselves, no more need for taxi drivers or truck drivers across America.

If robots cook and clean, no more chefs, no more maids, no more cleaning services.

If computers insert your food order, no more waiting staff.

What will the jobs be in the future? How will economies handle it?

[Blue3]

Post-Scarcity
(a very, very good thing)

[Beet]

This is J.M. Keynes' future utopia. People would work fewer hours for more stuff. 6-hour workday, then 4-hour workday. Lower labor force participation rates. Needless to say we are very, very far away from it and much of the rest of the world is even further away.

[Sprouts Farmers Market ✘]

Those lazy young people will get exactly what they want. Can't have that happening now

[136or142]

All (or almost all) economic theory derives from the concept of scarcity.  If things can be made almost literally out of thin air or if energy becomes virtually free then that concept no longer applies and economic theory for the economy is no longer valid.

The economic theories that can be transferred to other things, such as daily life, would continue to apply as long as time is a scarce resource.

[RFayette]

All (or almost all) economic theory derives from the concept of scarcity.  If things can be made almost literally out of thin air or if energy becomes virtually free then that concept no longer applies and economic theory for the economy is no longer valid.

The economic theories that can be transferred to other things, such as daily life, would continue to apply as long as time is a scarce resource.

This.  I will say, certain jobs will basically always exist - inventors, software developers (or whatever is powering these machines in the future), and high-level management positions, not to mention plenty of academic disciplines based on research.  As long as there are products to develop, someone will have to formulate ideas about what they want and translate it into a product - certain aspects of this creativity process simply can never be automated, and people will have to decide how these firms go on.

[(Still) muted by Kalwejt until March 31]

There are a lot of jobs humans used to do in the early 19th century, but they don't do now.

I suspect the jobs of the future will be better, but I can't guarantee that. Productivity growth was fastest during the oil consumption boom of the 1940s-1970s (thus, the rise of the Middle Class), and has been extremely weak since the end of the Great Recession.

[Technocracy Timmy]

All (or almost all) economic theory derives from the concept of scarcity.  If things can be made almost literally out of thin air or if energy becomes virtually free then that concept no longer applies and economic theory for the economy is no longer valid.

The economic theories that can be transferred to other things, such as daily life, would continue to apply as long as time is a scarce resource.

This.  I will say, certain jobs will basically always exist - inventors, software developers (or whatever is powering these machines in the future), and high-level management positions, not to mention plenty of academic disciplines based on research.  As long as there are products to develop, someone will have to formulate ideas about what they want and translate it into a product - certain aspects of this creativity process simply can never be automated, and people will have to decide how these firms go on.

I agree but for a slightly different reason.

Basically human wants are unlimited and resources are scarce. Resources will always, to some extent or another, be scarce in relation to human wants. It's possible that humans just become complacent and their wants decrease, but I doubt it. Plenty of people within this 7 billion and growing population will just want even more things that go beyond whatever earth and nearby asteroids can provide us.

Needless to say I don't envision a post scarcity society within my lifetime.

[Blue3]

All (or almost all) economic theory derives from the concept of scarcity.  If things can be made almost literally out of thin air or if energy becomes virtually free then that concept no longer applies and economic theory for the economy is no longer valid.

The economic theories that can be transferred to other things, such as daily life, would continue to apply as long as time is a scarce resource.

This.  I will say, certain jobs will basically always exist - inventors, software developers (or whatever is powering these machines in the future), and high-level management positions, not to mention plenty of academic disciplines based on research.  As long as there are products to develop, someone will have to formulate ideas about what they want and translate it into a product - certain aspects of this creativity process simply can never be automated, and people will have to decide how these firms go on.

I agree but for a slightly different reason.

Basically human wants are unlimited and resources are scarce. Resources will always, to some extent or another, be scarce in relation to human wants. It's possible that humans just become complacent and their wants decrease, but I doubt it. Plenty of people within this 7 billion and growing population will just want even more things that go beyond whatever earth and nearby asteroids can provide us.

Needless to say I don't envision a post scarcity society within my lifetime.

It may be a while for people who want to create and own their own solar systems as private property... but really, just about everything we can want or need can be made from matter within our solar system. Even if the population becomes steady at 20 billion people or something at some point. The Sun itself contains a lot of mass, siphoning off .00000001% of it each day and also using some of its energy to transform that matter into whatever we want would be more than enough to satisfy almost all material wants. (Think the Star Forge, used for peaceful and positive production.) Combine that with extreme recycling, advanced machine networks, nanotechnology, asteroid mining, etc. The only real concern will be real estate... but once we reach a steady population, even that can be managed with ocean cities/homes, underwater cities/homes, underground cities/homes, space stations, bases on the Moon, colonies on Mars and the moons of Jupiter and Saturn, giant airships and protected bunkers on Venus, etc.

[Filuwaúrdjan]

I'll tell you on the day that I am made King of Siam.

[136or142]

I'll tell you on the day that I am made King of Siam.

Anna what will happen on that day?

[Antonio the Sixth]

Post-Scarcity
(a very, very good thing)

Either that, or we continue down the path of neoliberal policies that artificially maintain scarcity through promoting "competition" in every aspect of human life, and end up in a dystopian horror with a 40-50% structural unemployment rate where the unemployed are seen as lazy moochers who just need to pull themselves by their bootstraps.

[Associate Justice PiT]

All (or almost all) economic theory derives from the concept of scarcity.  If things can be made almost literally out of thin air or if energy becomes virtually free then that concept no longer applies and economic theory for the economy is no longer valid.

The economic theories that can be transferred to other things, such as daily life, would continue to apply as long as time is a scarce resource.

This.  I will say, certain jobs will basically always exist - inventors, software developers (or whatever is powering these machines in the future), and high-level management positions, not to mention plenty of academic disciplines based on research.  As long as there are products to develop, someone will have to formulate ideas about what they want and translate it into a product - certain aspects of this creativity process simply can never be automated, and people will have to decide how these firms go on.

I agree but for a slightly different reason.

Basically human wants are unlimited and resources are scarce. Resources will always, to some extent or another, be scarce in relation to human wants. It's possible that humans just become complacent and their wants decrease, but I doubt it. Plenty of people within this 7 billion and growing population will just want even more things that go beyond whatever earth and nearby asteroids can provide us.

Needless to say I don't envision a post scarcity society within my lifetime.

It may be a while for people who want to create and own their own solar systems as private property... but really, just about everything we can want or need can be made from matter within our solar system. Even if the population becomes steady at 20 billion people or something at some point. The Sun itself contains a lot of mass, siphoning off .00000001% of it each day and also using some of its energy to transform that matter into whatever we want would be more than enough to satisfy almost all material wants. (Think the Star Forge, used for peaceful and positive production.) Combine that with extreme recycling, advanced machine networks, nanotechnology, asteroid mining, etc. The only real concern will be real estate... but once we reach a steady population, even that can be managed with ocean cities/homes, underwater cities/homes, underground cities/homes, space stations, bases on the Moon, colonies on Mars and the moons of Jupiter and Saturn, giant airships and protected bunkers on Venus, etc.

     You do realize this is all extraordinarily unrealistic, though? There's nothing wrong with dreaming, but this is less a futuristic world and more a fantasy world.

[Adam Griffin]

Machines, robots, computers and algorithms will sooner or later be able to not only do everything that we can do, but they will do them better and at less cost under the current economic system. Those who think machines are just going to be better manufacturers than us ignore the reality we're facing within a few decades where they'll also be better writers, poets and artists. The need for human employment will eventually disappear entirely - it's just a matter of time and/or how long it takes virtual and artificial intelligence to become feasible, complex and commonplace. Humans from an economic standpoint will become obsolete.

This is already happening: we're likely at a record level already in terms of percentage of the global population who wants to work but cannot realistically find employment or a way of life that sustains their basic needs. It's only going to get exponentially worse in the coming decades. I really don't think we're that far off from a majority of humanity literally being incapable of obtaining employment, regardless of skill or education. The only good news in this is that such a system would be hard to maintain unless society at-large was living under an entirely different economic system (i.e. "free money"); otherwise, even the people who own the machines won't be able to earn tangible profit off of them, whether robots are more cost-efficient than humans or not.

[Adam Griffin]

^^^ And to anyone who says something along the lines of "every great economic revolution has always displaced workers but created demand for new industries that employed the displaced": yeah, there will be demand for new products and services...which will also be fulfilled by the same technologies that displaced people in the first place. We've never had one of these revolutions before where the upset was caused by something more intelligent and capable than ourselves. The cause of the displacement and that which inherits the new jobs created by it will be one and the same for the first time in human history. This is all encompassing and far too exponential in growth to allow for any adjusting along historical lines.

[Virginiá]

We've never had one of these revolutions before where the upset was caused by something more intelligent and capable than ourselves. The cause of the displacement and that which inherits the new jobs created by it will be one and the same for the first time in human history. This is all encompassing and far too exponential in growth to allow for any adjusting along historical lines.

Don't worry, there is a solution for this!

[Foucaulf]

This is a bizarre thread. I found Adam Griffin's post to be most interesting, but that's just because he's not the only one regurgitating info at an intro to microeconomics level. (FYI, economics as a "science of scarcity" is literally a slogan invented by British economist Lionel Robbins to boost his department's reputation in the 1930s.)

Anyways, always remember that two questions are asked here: "what would a world with cheap automated labour everywhere look like?" and "is that world coming soon?"

To the first, that world should be one of immense prosperity in the aggregate. A machine labourer is going to take less energy and time to cultivate than most human workers. Like how computers have created new professions and made certain tasks much faster, automated labour assisting certain humans would make them more productivity. So all the dystopian fears is really on the distribution of income, not its level.

To the second, the problem with substituting labour with robots is as much a problem of speed as it is of just cost. If adoption of robots is slow, even if you believe in a Marxist theory of the world, you could still argue that companies will seek rents on robots and the cost of robots will increase as a result (or wages along the manufacturing process increases).

An occupation today is not just marked by some marginal cost of labour, but also by regulations, flexibility/ability to contract work, management integration and so forth. I don't expect substitution by robots to be uniform across fields at all, due to all those factors I pointed out above creating variation in speed of adoption. I can even imagine a field like office secretaries being surprisingly resilient to automation due to some innate preference for human interaction there.

[Antonio the Sixth]

So all the dystopian fears is really on the distribution of income, not its level.

Well, duh. I thought that point was obvious.

You seem to think that should somehow reassure us. I don't see how a society where 99.9% are dirt-poor and 0.1% are filthy rich is any better than a society where everyone is dirt-poor. In fact, I'd actually say the latter is preferable ceteris paribus.

[Foucaulf]

Well, duh. I thought that point was obvious. You seem to think that should somehow reassure us.

Yes, it is sort of obvious, but it's like how people need reminding that we're headed more toward Huxley's dystopia than George Orwell's.

Besides, since economics doesn't really strike at what people worry about with income inequality, I'm really implying economics will matter less and politics will matter more. Doesn't that at least reassure you?

[Filuwaúrdjan]

Yes, it is sort of obvious, but it's like how people need reminding that we're headed more toward Huxley's dystopia than George Orwell's.

It's worse than that. We're heading towards Dennis Potter's.

[Antonio the Sixth]

Besides, since economics doesn't really strike at what people worry about with income inequality, I'm really implying economics will matter less and politics will matter more. Doesn't that at least reassure you?

It definitely would if politics itself hadn't adopted a frame of analysis that assesses the validity of public policy based exclusively on economic criteria. I think we've already been over this.

[parochial boy]

If this automation were to happen, with the resultant effects on employment, then the only real solution would be to place the means of production in the hands of the population.

This is both because of the obvious factor that, in such a situation, the owners of the robots would become extraordinarily wealthy while the rest of the population suffered from chronic unemployment; but also, the whole idea underpinning capitalism, that we need competition, or incentive, would basically become moot if robots were doing all the work.

A basic income doesn't really go far enough; we would have to turn the entire means of production in the economy under the democratic control of the people.

[Good Habit]

we would have to turn the entire means of production in the economy under the democratic control of the people.

So this would then finally be (democratic) communism. It's either that, or the extermination of the human race
(as people are economically obsolete, a rational AI leadership would consider future humans just a waste of resources - may be a small number in a zoo - but else..)

[Blue3]

If this automation were to happen, with the resultant effects on employment, then the only real solution would be to place the means of production in the hands of the population.

This is both because of the obvious factor that, in such a situation, the owners of the robots would become extraordinarily wealthy while the rest of the population suffered from chronic unemployment; but also, the whole idea underpinning capitalism, that we need competition, or incentive, would basically become moot if robots were doing all the work.

A basic income doesn't really go far enough; we would have to turn the entire means of production in the economy under the democratic control of the people.

Well, think of advanced 3D printing and similar devices to come... it's already beginning to happen.

[Foucaulf]

Going to push this good article by Ryan Avent at The Economist on robots and automation. I had wanted to make the following point earlier in the thread, but he puts it in better terms:

You must be logged in to read this quote.

If you're versed in some economics, here's Paul Krugman reinterpreting the above passage with figures and the comparative statics of a rise in capital productivity.

If you're really versed in it, I can explain it in four sentences: this argument is a twist on the Stolper-Samuelson theorem. A rise in capital-intensiveness still increases the unit price of capital, but does not necessarily shift production toward the capital-intensive good (since prices are held constant). In fact, the share of the economy using the capital-intensive good decreases, and therefore more labor shifts to producing the labor-intensive good but at a lower wage.