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When it comes to the subject of automation, I read that the wide majority of the arguments assume that the profits/savings "vanish", alongside the jobs loss.

I see the reasoning above as flawed though: if automation lowers the prices of the goods (both by increasing productivity, and by reducing costs; I'm ignoring the automation industry itself) in general, this leads implicitly (in the long term) to an increase in wealth, and by extension (again, in the long term), to an increase of the jobs offer.

In practical terms, if producing, say cars, would cost less, people would save money and spend it through other markets, say going (more) to theater; the increase of demand in other markets would create new jobs, in this case, theater companies.

I see the net of all of this as positive. Am I missing some important factors?

I can see as argument (by some) that this phenomenon could/would only lead to increased profits for the "Top 1% of the evil capitalists©". Although undesirable, this is irrelevant - such (evil©) people would certainly spend or reinvest the money, again, leading to the mentioned consequences.

It's important to note that I'm talking about long term. I'm sure that if literally tomorrow automation would take over millions of job, it would certainly be a disaster. I'm also assuming a healthy economy, that is, the increase of savings/profits wouldn't stay still under the mattresses.

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Short-term or long-term, Property rights and distributional issues exist, "evil capitalists" or not, and they will always result in strong scrutiny of any change. Remember that what is "short term" for society is mid- or even long-term for individuals.

Moreover, there exists the transitional pain: whether we can optimize it downwards, and who is going to feel it.

All these cause the heated arguments and the opposing positions.

But your post starts with a strange assertion: that "almost all times" it is assumed that automation has a negative economic impact. If this was so, it seems a little strange that automation marches triumphantly for the last two hundred years, and it continues to do so. If this was so, people now must live in a much worse material situation than two hundred years ago. Is this the case?

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  • $\begingroup$ Thanks for the answer. With "almost all the times" I was referring to the fact that the assumption that profits/savings "vanish" is very common in popular belief, which (as written) I'm skeptical about. I've rephrased the question to try to make it clearer. I think that the material situation is better compared to the past due to several/many factors, so I wouldn't establish such a direct causality relationship, but I agree with the answer overall. $\endgroup$ – Marcus May 26 '16 at 19:54
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Most people's main asset is their labour, and automation threatens that.

Automation may reduce the value of human labour. If that happens, some people will lose out massively. While society as a whole becomes richer, these individuals will become poorer, and probably much poorer, to the point of destitution.

It is not clear whether this will actually happen. The rise in automation over the past 200 years has changed but not removed the value of human labour. But the idea that automation should be feared comes from this uncertainty.

If labour is devalued, governments could cause wealth redistribution with policies like a universal basic income. However, if this is not done, then enormous social problems could result.

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  • $\begingroup$ "Most people's main asset is their labour" Sure labour is an important asset for many people, but I'm not sure it is the most important asset for most people. What about house owners, what about those at the end of their career with significant pensions? $\endgroup$ – user7935 Sep 9 '16 at 12:59
  • $\begingroup$ Sure, not the case for older people - that's why I said most. But house owners under 50, typically own a house about 5x their salary - but they've got more than 5 years left work. $\endgroup$ – paj28 Sep 9 '16 at 13:33
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Yes.

Right now you can afford to buy a new Tesla 3 for only $35,000 because you are working in Detroit for General Motors.

I don't know how many people work in the factories in the entire world building cars but let's say there 10,000,000 in the entire world doing exactly that.

These are blue-collar jobs and the people building cars have limited skills. Some of these workers have been doing that for decades.

As you probably already, know some auto manufacturers are buying robots to build the cars.

We now have the technology to build an entire car from start to finish without only a few human beings.

Back in the day, it took thousands of men to build a single car. Including the people working at the tire factory and the people working at the window factory and so on.

Now the tire factory is firing people and buying robots. Now the window factory is firing people and buying robots.

Eventually, all the factories currently selling a product to General Motors will have robots instead of people.

As you can see, these workers cannot afford to buy a Tesla anymore.

In fact, they could be homesless in the near future.

Most people cannot survive without a paycheck indefinitely.

How long can you survive without a paycheck. Consider the possibility of selling your house, small business, car and everywhere else and drain your bank account.

If the answer is not for the rest of your life then you need to save more and invest more in the stock markets with the help of a professional portfolio manager.

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  • $\begingroup$ This is basically a very obtuse answer arguing that the cost of displaced time for laborers having to switch jobs is not worth the productivity gains from automation, without any explanation why. During the Industrial Revolution, workers would smash sewing machines in fear that they would be displaced. Rather, it forced workers to be more efficient or find other work. Arguably, today we also have automatic stabilizers like unemployment insurance to help workers find a more productive field for them. This answer would be improved by being more concise and addressing the question more directly. $\endgroup$ – Kitsune Cavalry May 29 '16 at 21:08

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