The robot that displaced a factory worker in 2019 made you richer. Not the factory owner. You.
This confuses people who treat jobs as the end goal of economic life rather than the means. Henry Hazlitt demolished this error in 1946 in "Economics in One Lesson." When a machine replaces ten workers on an assembly line, those ten workers represent released labor, which redirects toward production the economy couldn't afford before. The machine, meanwhile, drops the price of the manufactured good. You buy the same shirt for less. That gap between what you pay now and what you paid before is real purchasing power, a raise you received without your employer signing anything.
Let's look at televisions. A 60-inch 4K television cost around $1,500 in 2015. Today you buy comparable picture quality for under $350. Automated manufacturing drove that collapse. The factories didn't become charitable organizations; they competed for your dollars by deploying capital more efficiently, and the savings landed in your pocket.
This process terrifies politicians because the benefits disperse invisibly across millions of consumers while the displaced workers are visible, concentrated, and angry. So politicians respond by subsidizing inefficiency, taxing automation (as the EU seriously proposed in 2017), or erecting tariffs that punish you for wanting cheaper goods. Every such intervention forces you to pay more than the market price, transferring your purchasing power to a protected producer and their employees.
Free market thinkers have stressed one fact since Mises and Böhm-Bawerk formalized capital theory: rising capital intensity, meaning more and better machines per worker, is the entire mechanism behind rising real wages historically. Britain improved living standards between 1760 and 1850 by replacing hand-operated looms with machines, freeing labor to produce medicine, railways, and eventually the electricity grid.
Automation is capital accumulation made visible. You benefit from every iteration of it, provided the state leaves the price system alone to do its work.
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. And virtually all of the workers displaced by past advances in technology ended up reemployed, many in qualitatively better jobs. People need to chill out and enjoy the net benefits of new inventions.
I consider myself a Mises type fan of capitalism.
That said, assuming robots and AI can do 99% of all jobs currently done by humans, something likely to happen within 5 years IMO if we can deliver sufficient energy, describe a scenario in which human workers can still obtain employment or earn a living.
Is this situation such a warp of economic reality such that government intervention will be required so humans can live?
Musk says the answer will be universal income. Frankly I can’t conceive of another solution.
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