The impact of robotics on the economy.

For years, robots in industry have made it possible to automate simple tasks. So far, this has not led to higher unemployment, but the argument is that this is about to change.

The additional prosperity will therefore end up in the hands of a few: the owners and managers of (large) companies. Initially, the gap between rich and poor will widen further. Lower-skilled workers will be the first to lose their jobs, and no replacements will be created for them. In the Netherlands, they will end up relying on unemployment benefits and social assistance. In other countries, such as the United States, this will lead to bitter poverty much more quickly. It is therefore not difficult to imagine that this could result in enormous discontent and perhaps even revolutions. Hopefully, this will be only an interim period during which policymakers make adjustments so that everyone can benefit from increased prosperity. Developing and implementing effective policies is crucial to shaping this transition.

Ultimately, however, this development cannot be stopped, simply because it is possible and because AI and robotization can generate so much money and power.

Redistribution of prosperity

If, eventually, even highly educated workers are forced into unemployment by artificial intelligence, the government will be obliged to intervene. It could do so by redistributing prosperity between the (by then) super-rich and the unemployed. Since national governments will no longer have sufficient influence over multinational corporations, this will require cooperation. Let us assume the positive scenario and suppose that this can ultimately be achieved. We would then live with abundant freedom, leisure, and prosperity until the last job is replaced by smarter robots. At that point, or shortly beforehand, the economy as we know it will disappear and everything will be free. After all, robots will produce everything, including the extraction of raw materials, and because they demand nothing in return, they will do so free of charge, 24 hours a day, 365 days a year. The prices of products and services will therefore continue to fall until they eventually reach zero.

And then?

The economy has disappeared; being rich is no longer useful because everything is free.

Will a shadow economy emerge, as one currently exists between the underworld and the legitimate world, or will we try to distinguish ourselves in other ways? I do not know at present. What I do know is that the scenario described above is realistic and that we must prepare both for the period between now and the disappearance of the economy and for the period that follows.

But if we manage it well, we can actually achieve precisely what we have always wanted: more free time and enough income to lead a fulfilling life. I therefore believe that this idea is worth continuing to invest in innovation for.

Recently, this economist shared his vision of what needs to happen—and what will happen—when AI becomes more efficient than humans in many areas.