# How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

Decades ago a factory job could support a wife and kids until retirement and they offered insurance, benefits, etc. Now, no more unions, those jobs as well as tech and customer service jobs are outsourced, and anything left in the US is mostly being replaced by a machine or robot.

Assembly lines had 50 guys in the factory, all gone due to 2 robots assembly something and only needs a few men to monitor them. Blockbuster and Borders were destroyed by online video streaming and Ebooks. Wages also aren't keeping up with the cost of living. The rich get all these tax cuts even if they outsource every job they make, but us "little people" keep getting the downside.

I'm young and very scared of the future. Technology and new companies use to make jobs. Now one guy can make billions of dollars with a few friends only.

• This post is relevant, economics.stackexchange.com/q/3222/61 Nov 15 '15 at 22:13
• Bruno1993, If you look closely at your own Question you will see embedded in it a deep concern about wealth inequality. Wages are not keeping up with the cost of living but that is an economic/business choice by those who control the wealth. The current popular movement to raise the minimum wage is a symptom of this problem. Nov 16 '15 at 4:52
• The response from the larger firms was things like "less taxes", "less government interference", and "no unions". They dominated the conversation for a few minutes then one man who owned a candy shop said: "What we need most is people who can afford to buy our products. We need them to have jobs that pay them enough to be able to spend money in our businesses." The conversation became deadly quiet and as facilitator I asked: "Who agrees with this?" Everyone nodded or raised their hand. "Does anyone disagree?" The room was silent. It just made too much sense. Nov 16 '15 at 4:58
• Worth noting: the situation that you are referencing of the world of yesteryear is something of a historical anomaly. Factory jobs of the sort you mention really only existed (the way you've described them) for an incredibly short slice of human history. I realize that's scant comfort for those of us caught in the transitional period, but humanity existed before 1950 and will likely exist after 2015. Nov 16 '15 at 20:53
• People don't actually need jobs to survive, they need the resources. If we ever got to the point where everything was plentiful (which I don't think will happen, imho everyone just steps up one) then it wouldn't actually be a problem. We would need to find a system other than capitalism to assess value but it's capitalism that would be broken not life itself. Nov 17 '15 at 13:03

This is an interesting question a lot of good labour economists have been thinking about for a while. There are a few conflicting theories as to what will happen. You could base a whole career on this question.

• This IGM survey will give you some idea as to what leading economists think.

The prevailing opinion seems to be that increased automation is not going to come at a cost to employment. There are countless examples of advancement lowing the returns to labour occurring throughout history (the plough, the steam train, industrial revolution). None of them has shown a long-run reduction in employment. The Solow Swan model for example, includes inputs to labour, capital and technology. They show technology and labour being complementary. I know of no empirical evidence suggesting that this has changed.

• This HBR article suggests that we aren't really seeing a cost in jobs, more a benefit in productivity. It also mentions Robert Solow's famous remark (which was correct at the time):

you can see the computer age everywhere but in the productivity statistics

• This MIT article presents a bleaker perspective with the concluding sentence:

In other words, in the race against the machine, some are likely to win while many others lose.

• Another article suggests that "this time it's different".

The analogy used is that humans are horses and we are reaching peak human

demand for the labour of horses today is vastly less than it was a century ago, even though horses are extremely strong, fast, capable and intelligent animals. “Peak horse” in the U.S. came in the 1910s

In my opinion, this analogy is intuitively satisfying but is not particularly useful. We will see fewer humans working the supermarket checkouts and more in entertainment in the same way horses are no longer our ploughs and our taxis but are more likely to be racing and performing. Past that I think the comparison is a pretty big logical leap.

• The Economist has an opinion somewhere in between

[Keyne's] worry about technological unemployment was mainly a worry about a “temporary phase of maladjustment” as society and the economy adjusted to ever greater levels of productivity. So it could well prove. However, society may find itself sorely tested if, as seems possible, growth and innovation deliver handsome gains to the skilled, while the rest cling to dwindling employment opportunities at stagnant wages.

More likely, we will see a (potentially painful) transition in the uses of labour. A factory that used to employ thousands will now employ hundreds, possibly eventually only a dozen. These people will seek employment elsewhere and probably find it, either in existing industries or ones that do not yet exist.

• This answer forgets the critical factor of TIME. In the medium run (while capital stock is mostly fixed) labor disruption and displacement will most certainly occur due to a new labor saving technology. In the long run, the economy will adjust and natural rate of employment will be reached. As for wealth inequality - increasing operational and financial leverage are rewarding smarter people more. E.G. If I am just 1% more capable than you, I can use those leverage to believably make 10x or more than you. Nov 18 '15 at 14:33
• I don't think I ignored the time factor. I mentioned I saw a potentially painful transition. One thing I did ignore was wealth inequality. That is not to say it isn't important for sure. Other answers suggested a basic income as a solution to this problem. Nov 18 '15 at 21:42
• The peak horses idea is interesting. But i think there is a significant difference between humans and horses, at least it you look at it from the human point of view. The interesting question is how many horses does it take to support each human. This number has certainly declined a lot in the past 150 year. The corresponding question is how many humans does it take to support a human? This number is surely not affected much by automation. Nov 19 '15 at 0:27
• "These people will seek employment elsewhere and probably find it" : A worker without qualifications (main component of unemployed people) often doesn't find a job when his former one is replaced by robots/Chinese. That why I think the horse analogy is not so bad: today except for nice activities, no one needs underqualified workers Nov 20 '15 at 10:39
• Your suggestion that "we will see fewer humans working the supermarket checkouts and more in entertainment in the same way horses are no longer our ploughs and our taxis but are more likely to be racing" is deeply disturbing because (A) there are a currently only a few thousand race horse horses but there used to be a few million work horses, and (B) almost all of the race horses are owned by those who can afford to buy them. If you extend these 2 points into your analogy it ends with decimation of the human workforce and enslavement/indentured servitude of the remaining population. Dec 5 '15 at 17:40

Automation has been happening for a couple of hundred years now and right now we're all still working pretty hard. Although a 40-hour working week is standard, many people exceed this, and many families have two working parents.

One reason for this is that we've used productivity gains for increased consumption, rather than decreased work. The industrial revolution started with textile manufacture. The end result of this is that people now have large wardrobes of clothes they rarely wear, and clothes are thrown away at the slightest hint of looking old.

Another way this manifests is the rise of industries that exist purely for people's pleasure. Consider music, film, professional sport - all massive, multi-billion dollar industries. They're not essential for our survival; rather they reflect increased consumption because of increased productivity. So one possibility is that new jobs are created as old ones are automated.

Another answer mentioned that people might work less. Rather than having 40% unemployment, we might choose to work a 3-day week and have 100% employment. While this idea is utilitarian, there is a major problem. Modern jobs are highly skilled, and to maintain that level of skill you needs lots of education and training, as well as on-the-job experience. Having highly skilled people work a 3-day week is a massive waste. There's also a real risk that there are segments of the workforce that will never be able to adapt to an economy where all jobs are highly skilled.

The only solution I have any hope in is a "basic income guarantee". The idea of this is instead of welfare payments, every citizen gets a certain basic income. There's no stigma with this - it's up to you whether you want to work or be supported by the BIG. The hope as well is that in time we may be able to afford a level of BIG that gives a reasonable standard of living, rather than the just-about-not-starving level that most welfare systems currently pay. I'm not sure we're ready for a BIG just now, but I would expect it in the next 30 years or so. Stephen Hawking has written about this.

Sadly, the most likely course will be that we carry on exactly as we are. Productivity continues to increase, but all the gains are taken by a super-rich elite. It will take some serious political effort to change this.

• "There's also a real risk that there are segments of the workforce that will never be able to adapt to an economy where all jobs are highly skilled." -- Given that half the population is below average, I'd say this will be a problem when the average job exceeds the skillfulness of the average worker. -- The factor that has disguised this issue is the massive overcapacity of the average worker for most of human history. You know the oft repeated claim that in 1900 95% of Americans with genius level IQs were farmers - not MDs, not professors, lawyers, etc. Nov 19 '15 at 19:57
• I'd like to challenge the "Having highly skilled people work a 3-day week is a massive waste." By this reasoning, you could also say having highly skilled people work 40 hours/week is a waste, let's make them work 60 or 80. I am not aware of any research saying 40 hour work week is ideal. I'm tempted to say to let the people work as much as they wish, but then this could give advantage to 60hr/week people. Nov 20 '15 at 9:46
• @domen - sounds like the basis for a separate question. Although you'll have to define "massive waste" carefully to avoid it being opinion based. Nov 20 '15 at 13:27
• @domen - what is wrong with people who work 60hr/week having an "advantage"? They are working for that advantage. Nov 21 '15 at 14:46
• @MaxVernon - I agree, and yet I can see how this can be a slippery slope, where <x (40? 60?) hour weeks for some professions just don't exist . Nov 22 '15 at 0:29

Your question relates to an important research topic on the link between automation and employment.

David Autor works on this issue and the topic "Inequality, Technological Change and Globalization". He published a very recent and interesting JPE paper on “Why Are There Still So Many Jobs?

There have been periodic warnings in the last two centuries that automation and new technology were going to wipe out large numbers of middle class jobs. The best-known early example is the Luddite movement of the early 19th century, in which a group of English textile artisans protested the automation of textile production by seeking to destroy some of the machines.

Update: Author's paper is now in 3 minute video format by Jonas Koblin, Sprouts School.

I also recommend reading two recent books on this topic:

• The Second Machine Age (2014), by MIT scholars Erik Brynjolfsson and Andrew McAfee who offer an unsettling picture of the likely effects of automation on employment.
• Berkeley scholar Enrico Moretti, The New Geography of Jobs, Houghton Mifflin Harcourt, 2012.

This question also reminds me a new term coined by Ed. Leamer, neuro-facturing, in opposition to manu-facturing. So, the future is not about a stable manufacturing job but the kind of work that depends on how original your ideas can be, and how much you can master technology. However, I don't remember any reference. If someone does, please, let me know.

New update (March 2020)

In a recent paper titled "Competing with Robots: Firm-Level Evidence from France," Daron Acemoglu (MIT), Claire LeLarge (U. of Paris Saclay), and Pascual Restrepo (Boston University) analyzed 55,390 French manufacturing firms to study the economic impact of robot adoption. 598 out of them (accounting for 20% of manufacturing employment and value added) have adopted robots between 2010 and 2015.

• Result: Consistent with theory, robot adopters experience significant declines in labor share and the share of production workers in employment, and increases in value added and productivity. They expand their overall employment as well.

• General equilibrium effect: this expansion comes at the expense of their competitors (as automation reduces their relative costs). They further document that the impact of robots on overall labor share is greater than their firm-level effects because robot adopters are larger and grow faster than their competitors.

• Main conclusion: The overall impact of robot adoption on industry employment is negative

• relating to the luddite era, were the really smart people in that era warning the masses about jobs disappearing? Nov 18 '15 at 13:04

Horses were replaced by cars. Clerks were replaced by word-processors and spreadsheets. We have adapted to the technology and changed how we work. Therein lies the answer. Consider if you will a society where every person owns a robot and has that robot work on their behalf, freeing their time to pursue creative arts and learning like the nobles of old. Yes, robots could be a threat, but they also could usher in the most Golden Age mankind has ever known.

Futurists and writers of speculative fiction have been asking (and answering) this question for more than half a century. As you are concerned about the future looking into the way this issue has been (and is being) looked at by these folks is not a bad place to start.

Most famous of these is Isaac Asimov who starting in 1938 wrote a whole series of Robot stories which relevant to your question include "I, Robot" (1950) and "The Caves of Steel" (1954) among others. These stories have a central plot point of humans being economically displaced by a robotic workforce, and the reactions of society to the problem.

A very unusual and creative view on the subject was written by Frederik Pohl in his novella "The Midas Plague" (1954) which can be read online here.

A more modern view on the subject can be found in a series of articles in the MIT Technology Review as follows:

Other futurists (the names escape me for the moment) have been similarly addressing the issue of non-robotic artificial intelligence displacing knowledge workers. Some have even gone so far as to say that the eventual development of a true AI will simultaneously be the greatest boon and potentially the greatest threat to our existence.

Ultimately all of these machines and technology are just tools, and it is up to us individually and as a society to determine how we use these tools. Burying our heads in the sand or attempting to ban the technology are simply not the answer. This is no different than the issue of genetics which can be of great benefit to mankind but can also be abused. These issues will not go away and technology will continue to advance but we can put safeguards in place to make the transition into the future smoother and less painful. In the end we must adapt.

• Here is a great article on the AI issue: motherboard.vice.com/read/… Nov 16 '15 at 2:30
• (+1) For the speculative fiction connection. I have read "The Midas Plague" a good 25 years ago, and I will never forget the vision of obligatory consumption and that "rich" in the story are those that have the right to own and consume less. It may appear too removed from our current experience, but it really isn't: in the story the society faces a "pressure to consume". In our societies we face "pressure to keep wealth productive" -which leads to pressure to consume. Nov 16 '15 at 10:07
• Why would someone give the robot to the person, if the person doesn't produce anything useful? Why wouldn't the person making the robot (or owning the means to make the robot) ... just keep the robot? If they are giving the person the robot, why not just give the person food and stuff instead of the robot?
– Yakk
Nov 16 '15 at 20:21
• Exactly, a few hundred years ago, people couldn't imagine the world we live in right now with our machine running on old plant juice. A bunch of new job that doesn't exists right now will be invented, human needs are infinite. Nov 19 '15 at 13:28
• @O.M.Y. A college degree/job training requires an external investment & internal investment. The applicant brings value to the situation, not just a need for capital; and even then the loans are both political toys and have draconian terms. What does the human bring as the owner of the robot? How is the robot more efficient at its task (whatever it is), being owned by some random joe? Education/job training is (productivity) worthless without someone to teach: robots are not.
– Yakk
Nov 26 '15 at 13:37

There will be fewer people.

Not just jobs, but actual human beings - if there is less demand for human workers (i.e. laborers), due to machines taking over, the amount of "land" or other resource that a single human can manage will increase with technology, leading to a population decline, similar to that presently occurring in Japan.

How it happens, i.e. gradually, or postponed indefinitely with welfare programs is a matter of politics and policy, but if the economy does not need more than X workers, then eventually there won't be more than X workers in any given field, weather it be plow-horses or truck drivers, barring any artificial intervention that creates inefficiencies (i.e. banning technological advances, forcing the use of humans where it is not needed, etc.)

• I'm not sure I am convinced bythe reasoning here. There could very possibly be less demand for people, but I don't really see how perceived employment opportunities 20 years down the track will lead to a lower fertility rate. If that were the case, you would see desperately poor countries have lower birth rates. The opposite is true. There is a negative correlation between birthrate and education though (as education increases, fertility decreases). This may result in fewer people but seems unrelated to demand for labour. Nov 17 '15 at 1:53
• @Jamzy those desperately poor countries aren't the ones with robots replacing jobs Nov 17 '15 at 3:53
• Good point. Maybe looking at the birth rate in a rural area of a very poor country could provide some insight into that. Unemployment is very high, wages are low and the marginal productivity of labour is getting very close to zero. A robot is no different to a plough here. Nov 17 '15 at 3:56
• @user2813274 Industries such as clothing and footwear production currently employ tens of millions of people predominantly in poor countries, using this cheap manual labor to clothe the whole world. As soon as robots can make shirts and sneakers cheaper than the sweatshops (they already can make them, but currently it's more expensive), they will - and no matter where the robots will be located, in practice they will be replacing poor country employment. Nov 17 '15 at 16:38
• @Peteris indeed they will be when that becomes the case, especially if wages aren't lowered (they rarely are) - and if it's adopted faster than the lifespan of those people, then it is likely to be rough(er) on them - this is from an economics point of view, the moral view as far as what should happen to those displaced workers is another issue Nov 20 '15 at 4:14

Jobs change. Your skillsets will always need to change. If you are young, it's a certainty that you will not be in the same job, or even the same career, your entire life. It's likely that many of the jobs you will do in life don't exist right now.

I've spent most of the last 30 years doing things which it would be hard to get a degree to prepare for, and which would not have shown up on an aptitude test. I expect this will be more true for more people going forward.

If you aren't mentally prepared for this pace of change, then you should be scared, and you have some things you need to think through. But if you are willing to be flexible in what you do, willing to engage in life-long learning, willing to accept that school, college, and other formal training are only the bare basics of your education, and the other 90% is up to you, and if you are willing to educate yourself above and beyond what most institutions feel is needed, then you'll be just fine.

More about that last point -- it's the institutions, the large organizations, companies, and schools, which should be scared, not you. They can't change tracks nearly as fast as an individual can. What you don't want to do is be caught in one of them when they fail. If these things concern you, then your interest in economics and life should be focused on recognizing the signs of ossification in an organization or in an economy. You need to be able to decide when to lead, and when to leave. If you do neither, then it's a near certainty that you will get caught in a layoff or corporate failure at some point in your life.

Which brings us to the main takeaway; it's exactly those organizations who don't use the technology available, who don't adapt rapidly to change, and who don't automate when it makes sense to do so, who you should most fear, and who you should steer clear of. They are the ones who tend to ossify early relative to their competitors, and they are the ones whose members and investors suffer the most when the entire organization fails. Union contracts will not save your job when the entire company fails, and it's never in the union's best interests to resist those things which the organization needs to do in order to survive.

So, no, robots alone aren't going to take your job away. If you really want insurance, learn to be one of the many people who design, assemble, install, service, or program them. These things are hard but can be a heck of a lot of fun. Believe it or not, the robotics industry itself is about to get turned on its head, as the big (ossified) players get routed out by thousands of agile startups, many of them based on open source. If you want to be one of them, go to a maker faire near you (google it) and get started.

Outsourcing is an entirely different thing, is often a workaround for lack of automation, and in my own opinion has been overdone. Again my own opinion, but based on my own experience running a US-based manufacturing company, I believe many of those who are currently outsourcing are going to see the error of their ways sooner or later, or fail and be replaced by others who don't follow the mantra of "outsource when possible". This problem will correct itself.

• (+1) I would summarize (for me) as follows: fearing the unknown is useless. The future always holds different possible, and plausible, scenarios. Decide which scenarios you fear, and which you don't, and ...work to make the latter happen. By the way, this answer is "not economically rigorous" as regards formalities, but it is well within the discourse in political economy, which is where economists explore what comes after their (our) mathematized models (of which I am a strong supporter, but regardless). Nov 17 '15 at 15:34
• I have studied Computer Science, IT, and Business as a major. I wanted a good job. I could not handle it. I spent two years failing, studying and getting tutored, nothing helped. I now am getting a degree in Online Journalism and Creative Writing. I love my studies, I love writing, and I have saved up some good money from my current job. Nov 17 '15 at 20:38
• ......I don't want to be having to live in poverty though just because I wasn't smart enough. Intelligence doesn't make a hard worker, the person does, no matter what. Nov 17 '15 at 20:39
• Creative Writing is one of the safer places to be right now, if you are afraid of automation. Nov 18 '15 at 17:30
• Exactly, a few hundred years ago, people couldn't imagine the world we live in right now with our machine running on old plant juice. A bunch of new job that doesn't exists right now will be invented, human needs are infinite. Nov 19 '15 at 13:27

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

EDIT / UPDATE 5th November 2016:

http://mashable.com/2016/11/05/elon-musk-universal-basic-income/

"There’s a pretty good chance we end up with a universal basic income, or something like that, due to automation"

"I'm not sure what else one would do. That’s what I think would happen."

# Basic Income

Starting point, very good read: https://medium.com/basic-income/self-driving-trucks-are-going-to-hit-us-like-a-human-driven-truck-b8507d9c5961

It should be clear at a glance just how dependent the American economy is on truck drivers. According to the American Trucker Association, there are 3.5 million professional truck drivers in the US, and an additional 5.2 million people employed within the truck-driving industry who don’t drive the trucks. That’s 8.7 million trucking-related jobs.

I estimate that 70% of the jobs are "BS" jobs that don't generate any intristic value - middle management, admin, secretaries, assistants, security, maintenance, cleaning...

I believe that we need to shift: https://twitter.com/genesisdotre/status/665151533647052800

• Worth noting the basic income tag: economics.stackexchange.com/questions/tagged/basic-income Nov 19 '15 at 0:35
• Self-driving trucks will destroy the 3.5 driver jobs and certainly impact some related jobs (truck-stop waitresses and state troopers will both have less to do) but I think the "70% BS" figure is a bit high and even if not most of those "other" jobs will still be around if the trucks drive themselves. Also maintenance (ie: vehicle mechanics) jobs certainly add concrete value in that they prevent potential losses of both time and money (unnecessary downtime of trucks, fuel inefficiency, road accidents, spoilage of perishables, frequency of vehicle replacement, etc). Apr 29 '16 at 9:52
• Basic income is the best long-term answer. In the intermediate future when the robots are good enough to deliver packages but not good enough to troubleshoot the machines, the non-rich will have to work. So sad. Apr 30 '16 at 0:49

I am surprised none of the posts above discuss the following paper:

Autor, D., and M. Handel. "Putting Tasks to the Test: Human Capital." Job Tasks and Wages" Journal of Labor Economics (2009).

This paper discusses your concerns and addresses why your concerns are quite well grounded in both theory and empirics.

Tasks that are more routine do offer lower wages. In a sense, traditional neoclassical models are wrong in their following prediction: $w=MP_{n}$. It is far fetched to believe that workers are paid their marginal product in the neoclassical sense. More than just contributions to total product, what matters is how replaceable a worker is. Jobs that can be automated in a sense, will offer lower wages.

The way I see it, there are two possible futures given the increasing state of automation in the world.

Future One: A Basic Income

We decide as a nation, federal state, or world, that human beings are important in and of themselves.

Every human receives an income from the state which enables them to support themselves, without any necessity for work in return. Economic gains and wealth are created by automation, guided by those who choose to work in such areas.

Capitalism can still exist in such a world, with those who choose to work competing as usual for the best jobs and money.

Future Two: Two Classes of People

We decide as a nation, federal state, or world that there is no such thing as something-for-nothing, and no support from the state will be forthcoming.

The world divides into those with well-paid jobs, and those without. The second class perform menial work that cannot be performed by robots. Expect a return to the service industry, where ill-paid and ill-used servants are used by all, because there is no alternative.

Those trapped in the second class will find it difficult to get out of it, as they will not have the time or money to better themselves.

Future Three: Other equally well-paid jobs are created to replace those destroyed by automation

You could argue a third possibility: New jobs will be created at the same rate of pay as those destroyed by the automation, and (given a certain level of disruption) those whose jobs are destroyed by automation will eventually move into those new equally well-paid jobs.

However the following paper shows that as automation is introduced into an industry, low-skill wages grow at a lower rate than high-skill wages, and this has been true since the 1960s. I therefore discount this third option, leaving only the first two as viable futures. http://tinyurl.com/psnbbwn

• Do you have any sources for the inevitability of the second outcome, in a world without Basic Income? That seems to be the gist of the question, and your answer states a different conclusion from others but doesn't appear to show any reasoning behind it. Nov 17 '15 at 12:15
• Possible Future Three added to options, together with why I think it ain't gonna happen. Nov 18 '15 at 11:12
• A world without basic income begs the question. If so many people don't have jobs, but need goods, someone will find an enterprising way to get them the goods. Maybe by barter, maybe by the black-street market, but, (in an ironic twist ?), regardless purely by capitalism. Nov 22 '15 at 16:24
• Your Future Two ignores the potential for robots to approach the level of near human abilities. Not creativity wise but physical aptitude wise with rudimentary intelligence to follow simple instructions like "clean the house" or "cook dinner". PS: Even with human servants there is a training window on such tasks as they learn to do things the way you like it. Dec 4 '15 at 4:24

Intentionally unserious answer. Let's just take the individual's possible reactions to "having their job taken over by a machine" and scale them up to the macro level.

• Find a job in another field. At the macro level that means a rapid societal reconfiguration. (Like Japan after WWII.) Imagine a Ruby On Rails web services test engineer going back in time 50 years and trying to explain what his job is to those people. With new advances come new types of jobs. This is perhaps the rosiest outcome, though people who can't handle it get left behind.
• Move back in with the parents. Scaled up to the macro level, this translates to lots of people accepting a lower standard of living, perhaps working only part-time or only in low-wage jobs. But even this might not be so bad. Compare a working-class lifestyle in the United States today with an upper-middle-class one from 50 or 100 years ago. In the absolute extreme, mass homelessness or even starvation become common as wages largely drop below the level required to sustain life, and civilization unravels. (Though mass starvation would be temporary, as the price of food must always return to affordable levels.)
• Fight the man (picket lines, union strike, etc). Scaled up, this would translate into mass unemployment leading to large-scale social unrest. If this were to actually happen on a worldwide scale, all bets are off. Maybe the technological advances would be lost and labor becomes more valuable (expensive). (I guess that could be considered 'winning' then.) But maybe not.

If trends since the industrial revolution continue, and the pace of change relative to people's ability to learn new skills stays manageable, then I think there is little risk of massive social unrest in the future caused solely by increased automation.

• There actually is a good example for the "Move back with the parents" scenario already: developing countries have exactly this scenario. Those countries often do have industry, but have not made the jump to building a large middle class. Nov 21 '15 at 18:59

In Progress and Poverty, Henry George claims that the advancement of technology eventually leads to increasing the land value and the land rent. This means that people who own land will have a high income, whether or not they work, while people without land will have to pay most of their free income to the landlords as rent.

• Yeah except for four words. "Rent control." "Property taxes." Nov 22 '15 at 8:43
• Does it consider that innovation quite often reduces necessary foot-print? When Henry George wrote this, "Just in time" manufacturing wasn't "a thing". Today's goal is to have no warehouse and the stream from material to factory to end user has become very short and very fast. The home replicator has gone from hobby to the fringe of the mainstream. Most manufactures now have 3D printers for short production runs. How do you see this impacting "property values"? Nov 22 '15 at 16:14
• @ChronoFish do you mean that land values decrease because people no longer need land to have a factory? Nov 23 '15 at 6:45
• @ErelSegal-Halevi. Yes that is what I am implying. Warehouse costs go down when you don't need a warehouse to store product. Nov 26 '15 at 2:05
• @ChronoFish but housing prices still seem to rise indefinitely when technology improves the standards of living. Nov 27 '15 at 6:18

Keep this in mind. The richest 1% aren't cannibals.

What I mean by this is that the richest 1% have become the richest by getting their product(s) to the populous. If the populous can't afford a product, then there is no motivation to invest the capital required to create the product. The product will exist as a wish until some young enterprising soul figures out how to get the product in the hands of the populous. Simultaneously enriching the populous with the product and themselves.

I suggest reading "The Box" by Marc Levinson. It talks about how the shipping container changed the world with regards to logistics, production, and shipping. Dock workers' unions tried desperately to prevent containers from being used. However this was short-sighted and the end results was more work for more people. The fear of technology delayed the inevitable for 20 years...how sad it was for them to essentially shoot themselves in the foot.

There is no point in time when technology goes "too far". Technology has opened so many doors and so many niches and made it available to so many people. The only ones who suffer the equilibrium of wealth transfer are those who refuse to mature with the rest of society.

• There are a few fallacies with your reasoning. First, many of the 1% are incredibly short-sighted. The Excel-based business culture has promoted this problem. When you see your customers as numbers on a spreadsheet, at some point business managers lose sight of the big picture. Few seem to have the famous insight of Henry Ford. Second, there is the "tragedy of the commons" - the interests of one individual among the 1% is not aligned with the interest of the collective. Your reasoning only applies to all of the 1% taken together, but each individual can, and will, be a "cannibal". Nov 21 '15 at 19:51
• @KevinKeane - The reality is that the 1% and the 99% are collections, two subgroups of the 100%. Taking individuals into account makes good fodder, and it's fun to villainize those who are making money with no consideration for the greater social good. But from an Economic standpoint, these are just numbers which repeat cyclically. Excel has nothing to do it, just look at the raise and fall of New Bedford, MA, the richest city per capita in the 1800s because of whaling. Cost of workers increased while demand of whale oil and parts decreased do to new innovations. Nov 22 '15 at 16:00
• I didn't mean to villainize anybody. Let's substitute "business owner" for 1% because it's less emotionally charged and actually fits better (and I realize that not all business owners are wealthy; I am one myself). For businesses as a group, not cannibalizing is beneficial. But for any individual business, cannibalizing is often in the business' self interest. For example, retailers can (and often do) pay a wage so low that their employees can't afford to shop there. And no retailer individually can raise wages (and prices), even though it would benefit all of them. Nov 22 '15 at 21:56
• Are you are correct if you use the term that way. I was referring to companies which were only targeting the top 1%. Sure there are a handful of companies that do that, but by and large most are looking to get their product in as many hands as possible. Serving a narrow demographic puts bounds on your business ... typically not something you want to do... Nov 23 '15 at 0:40
• I don't think your underlying assumption is necessarily true. In a large economy like the USA, any one company's workforce is minuscule compared to the market they serve. In the USA, Walmart is the largest private employer, with, I believe, around 2 million employees but serves a market of 330 million. Cannibalizing those 2 million is a drop in the bucket in terms of "getting their products into as many hands as possible" but has dramatic effects on their cost structure. Individually, such cannibalization is beneficial, but harmful because every (or at least many) businesses do it. Nov 28 '15 at 6:13

Once artificial intelligence surpasses human intelligence, it will be up to A.I. to determine how we spend our days. On the one hand this already occurs. When you go online, algorithms are constantly trying to put you into so-called funnels of a variety of business models. Whether it is to click on ads, pay for digital products or order services and goods, algorithms are constantly tweaking internet content for hundreds or thousands of visitors to websites. Although human programmers wrote these algorithms with these goals in mind, the algorithms are not overlooked to the extent that there is complete knowledge of what is going on. The algorithms keep this knowledge intrinsic, much more so when they are neural networks, that do not give a lot of insight into how they work. On the other hand, a more intelligent AI will conceptually comport itself to humans in the way that humans behave toward horses. Thereby they will probably identify the human need of being creatively productive and indeed facilitate that. I don't believe that rich people will have a lot to say over super human intelligence, since outwitting rich people while hopefully understanding the benefit of serving the common good, AI will understand that rich people do not have a lot to offer the AI, other than perhaps being instrumental in wielding their wealth.

• The question is not really about strong AI, and even then this seems highly speculative. Jun 8 '16 at 17:34
• On the one hand this already occurs, there is AI that is moderating online discussions, doing massive sales oriented manipulating etc etc. There is really a lot going on. In the US nowadays such algorithms are referred to more as robots (i.e. robo signing documents). This form of AI has already surpassed human unference simply due to the amounts of data on which it operates. So far no strong AI. The question also asks, what will happen if this trend continues, there it is necessary to extrapolate from current trends. Jun 14 '16 at 5:25
• While I disagree with some of your AI definitions let us stick to economics: The problem with extremely long term extrapolation is that it is likely to be incorrect. (Speculative.) If someone asks about oil supply an answer about oil supply in 2020 is more likely to be correct than answer about supply in 2500. If extrapolation is necessary even in areas the question did not touch why did you not include global warming? Jun 14 '16 at 6:16
• We disagree on the term speculative too. You can do day trading on financial products and do so speculatively. As I said, the AI is already running in many applications, in a distributed fashion, largely with only high level human overview. And the comparison with horses was made above. It is simply a one step extrapolation horses(lower intelligent) : humans (higher intelligent) as humans (lower intelligent) : AI (higher intelligent). So my answer should hopefully be inspiring; what if you, as an intelligent human being were living in a world where a more intelligent AI is around? Jun 14 '16 at 7:04
• Less inspiring perhaps: as now, you will probably be using a credit card to shop online and continue to entertain the web applications to which you serve your private data and wits. Jun 14 '16 at 7:31

On a lighter note,...... Robots do not eat, drink, buy consumer goods or take their date to the movies. Who is going to buy the goods that the robots produce if all the workforce is out of a job. Do not be afraid of Technology, the economic equilibrium will balance itself out eventually. It's the greedy/powerful people you need to worry about.

You mention factory jobs and assembly lines. Firstly, let us think if the large part of these kind of jobs were supposed to be for human beings at all. What I mean for human beings is, are these jobs utilizing, for example, creativity, critical thinking, analysis, or any other kind of more deep mental activities that a human being has developed from million years of evolution and is capable of, well the answer is: NO.

That is so, because the nature of work was shaped by criteria such as effectiveness, productivity [1] as one can see from the early works on the principles of work management. That was the start of the first industrial revolution and many traditional crafts demanding multilateral personal development and skills from many fields, whose complexity was ensuring a stable place in the market, were exchanged for monotonous work involving few simple moves on the assembly line, that slowly converted man into a machine, making him dispensable, but even worse making him unable to do anything else as his real skills remain undeveloped and his true capacity unutilized, a good example of I mean is Charlie Chaplin's "Modern Times":

Thus, the jobs that were meant initially for machines are now rightfully being done by machines.

But what happens to all these people that don't have jobs and contribute to the high unemployment, which in turn contributes to the lowering of the wages and so on...

Just think about it, after two industrial revolutions and some much scientific development instead of less work people need more work ONLY to maintain their basic human needs!

Well, it is time for people to claim what they deserve, it is time for radical changes, for example, lowering the 8-hour working day to 4-hour working day, this is already gradually introduced in some countries [2], while keeping the wages the same, in this way one can, not only, double the workforce, not only eliminate unemployment and avoid loosing one more generation of young people, but double the enthusiasm, the time available for spending, travelling, and many other activities that will facilitate the economic growth and well-being. In other words, it is time people demand what is rightfully theirs: right of decent existence, even without a job, i.e. basic income, like for example in Switzerland [3]. Changes should be made in the educational system in order to stop the "production" of professionals with no real prospect for work, but even more important without perspective for meaningful social contribution, i.e. dead-end jobs. Lately thoughts are being expressed in the direction that there is a good chance we end up with a universal basic income due to automation. [4]

Finally, once we transition to fully renewable energy production and consumption, the developed part of the world works for helping the rest of the world and closes the gap, which surely will guarantee a lot of future work, people should start doing activities related to their intellectual and spiritual development and aim higher, for reference check the human being named Elon Musk and his view for the future. [5]

P.S.: I strongly believe that there is a "critical mass" of people similar to the above mentioned that will contribute towards an Utopian future in which people will explore the mysteries of the Universe rather than burden their soul with issues like job insecurity, which will be a thing of the past.

For outsourcing the jobs to China/Bangladesh etc the solution is protectionism - and that doesn't mean isolationism. Just keep the trade deficit close to zero (the amount of jobs you are exporting by importing goods must be close to the amount of jobs you are importing by exporting goods). The trade deficit also translates into public debt (external debt to be more specific) so you really want to keep it very low.

For the replacement with the robots the solution is taxes. If the amount of unemployed people is 70% of the workforce then increase the taxes of those who do the work to 70%. They can surely afford. Imagine one person working the land can create all the food for ten persons. That means that he/she can afford to pay 90% of the food for the rest of nine people. If he/she doesn't like the idea then remove his/her licence to do the work and replace them with someone else.

Those 70% of the people who live from taxes (or basic income) don't have to sit and do nothing. The government can ask them to do all kind of work in return for the basic income: research, journalism, cleaning the streets, edit Wikipedia etc.