Could it ever be economically viable, once technology allows, to create robot consumers to replace humans if demand was so low because of automation and reduced spending power/unemployment or is there simply no way to make robot consumers pay?

I am envisaging a future in which elite consumption has risen, but not enough to offset a huge decline in mass consumption. In that scenario, I was wondering if robot consumers could keep capitalism afloat? I am trying to check out for something I am writing whether such a thing could work economically ie whether there could be a profit in it for the producers and owners of the robots, I don’t think they could ever be economically autonomous because of the build and running costs. But could robot demand be sold or rented for example by the producers/owners to other companies to consume their products? There might be some state investment as well under the banner of demand stimulation? Or is it as the first reply argued, that this is just an economically illogical premise because the maths (profit) just can’t work because of cost of building and maintain the robots?

  • $\begingroup$ They use spare parts. $\endgroup$ – Fizz May 15 '19 at 0:41
  • $\begingroup$ I am not sure if I fully understand your question. Do you mean that if, for instance, humans "don't buy enough oranges" (whatever that means), you could create robot consumer who buy the oranges instead? That does not sound efficient. $\endgroup$ – Bayesian May 15 '19 at 8:08

Short answer

Perhaps your concern about stimulating demand is explained by the broken window fallacy. The fallacy is the belief that there is a social benefit to income that is concomitant with a loss in a stock of wealth. Instead of using a stone to break a window you want to use a robot.

Longer answer

You said "demand was so low because of automation". I think automation increases valuable output so it increases income so it increases demand. I think you suggested a nonsensical premise.

I think current day robots are economically viable since there is a market for them. As @Fizz correctly says they use spare parts and they also use energy, usually electricity. Presumably they produce more value than they consume, otherwise nobody would buy one. What is a robot and what is the owner of the robot are hard to separate since robots do not have what I might call autonomy under the law. They are chattel. As chattel, you might say it is the combined unit of the owner plus robot that is the consumer and the producer. The owner might be a corporation. Robots can mechanically pay for goods and services but since it's not an autonomous individual it is really the owner that is paying, using the owner's money. The robot itself does not own money.

If the law changes to recognize robots as autonomous individuals, not chattel, not slaves, then their individual output would add to GDP and their individual consumption of goods and services would add to aggregate demand. They already do add to these economic measures, but as part of a combined unit of owner plus robot.

You asked if robots can replace human consumers. Yes, robots as autonomous individuals can replace humans as consumers of goods and services. When a robot as an autonomous individual consumes a rival good, a human cannot consume the same. I think this is easy to understand if we consider electricity. If a robot as an autonomous individual runs, swims, and bicylces a triathlon, it will use energy that a human could not have used to air condition their condominium.

Link to a description of rival goods.


You have edited your question so I am posting an addendum. In this addendum I will assume that the law changed to recognize robots as autonomous individuals.

If elite consumption increases by one dollar and consumption by non-elites decreases by two dollars, aggregate consumption will decrease but that is a transitory problem. The lower level of consumption will soon be matched with a lower level of output. Nobody will persist in producing goods that will obviously fail to sell. I sense your question is about permanent effects and you did not specifically express a concern about transitory problems. One reason it is transitory is because when people stop producing goods that do not sell they switch to producing something that does and when that happens the economic recession comes to an end. Consider that there is the "permanent" phenomenon of productivity improvement which will eventually cause income and consumption to increase for elites and non-elites and so the lower level of non-elite consumption is temporary.

You asked if a robot consumer will "keep capitalism afloat". If the non-elite, motivated by a temporarily lower living standard, desire to vote to switch to a non-capitalism regime I think the robot consumer producer has an uncertain effect in that aspect. The robot consumer will consume some rival goods while also producing some rival goods. In the long run the robot producer consumer will be powerful and it will produce much and consume much. They will be part of the elite. Under a progressive tax system human elites and robot elites will be taxed at a higher rate than non-elites. It might be the progressive tax system, not as much the existence of robot consumer producers, that helps the non-elite.

Since I am assuming robots are recognized as autonomous individuals I will not answer the questions involving owners of robots and robots being sold and rented.

You seem very concerned about the cost to build and operate robots. These costs are always decreasing because of the permanent phenomenon of technology improvement.

You seem to persist in being concerned about stimulating demand. I refer you to the beginning of my answer that said low demand because of automation is nonsensical. We do not need robots to stimulate demand of rival goods. The destruction of rival goods is sufficient to stimulate demand.

  • 1
    $\begingroup$ " I think automation increases valuable output so it increases income so it increases demand." This is theoretically 100% correct. Keep in mind though: gained output isn't directly in the pocket of consumers, it's first of all an investment profit. There may be more goods, but may be split among fewer. If demand increases overall, it may be with a delay, and unequally across the board. $\endgroup$ – Arthur Hv May 15 '19 at 6:08
  • $\begingroup$ @ArthurHavlicek I do not anticipate an end to progressive taxation so I do not mind increases in profits. Furthermore automation can increase incomes for workers as long as some workers are still required. Automation changes the ratio of workers to capital: more hardware and software per worker can increase the worker's income. However, I do not discredit the possibility of a surge in the percentage of unemployable people with improvement in technology. $\endgroup$ – H2ONaCl May 20 '19 at 4:43

There are a lot of fuzzy terms in your question, as it has been pointed out. For example, the demand of a good is what it is, there is no concept of being too low or too high. Perhaps if you are a producer you may have the opinion that it is too low because you are not making a profit, but that doesn’t not mean it is actually “too low”.

I’m not sure how to think of your question, because for it to make sense to have robots consuming something, they must be consuming a service that is valuable. For example when I sell you something the cost of producing must be lower than the benefit of consuming it. If the robots derive no benefit, then this is economically un-viable. However, I can imagine scenarios were robots may benefit from buying oil or energy, or parts they might need to keep running (this is very sci-fiction, but so is your question ;-) ). Likewise I can imagine situations were someone else benefits from the robots’ consumption. In fact, we currently have examples of this. You can buy views and likes in your social media content by robots. This is, you are literally paying for robots to consume some videos or posts. This can make your channel more popular and increase subscriptions by real humans or increase the monetization from advertisement. Again we see that for this to be economically viable, the cost of the transaction, must be lower than the benefit of it. Otherwise, the practice will die away eventually.


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