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Will Automation Lead to Economic Collapse?

Most of the agriculture and industrial jobs are already phased out by machines. Over 70% of jobs and labor is currently to find in the service sector, but also this sector is being phased out and replaced by automation which means decreased purchasing power of the general public. Just take a look at this: http://www.thefiscaltimes.com/Articles/2012/08/20/Will-Robots-Cause-Mass-Unemployment-in-China.aspx#page1

Let's make an example as well. What exactly happens when people get automated by machines? They loose their jobs and need welfare to support themselves until they get a new job, if they ever do. But, where does welfare come from? It comes from tax payers. And do people on welfare pay taxes? They don't. So, what happens when everybody is on welfare due to automation and nobody pays taxes? This example is the reality in Michigan and the government there have been on the brink of shutting down due this exact issue. And we are beginning to see this never-ending spiral go out of control in the rest of the world. The trends are definitely there, but where's the solutions?

Is an economic collapse, in fact, an imminent event and a mathematical certainty, looking at the trends in Michigan and China? And is there a way out of this, looking at it in an economical perspective?


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  • Sep 2 2012: Technology will cause the collapse or contraction of some sectors of the economy which are being automated. The workers who are displaced by machines will feel the collapse and experience the chaos of a world which changed when they were unable to change with it.

    Out of the chaos will come a new normalcy which will prevail until the next revolution of technology. Then the world will change again; people will be left bewildered and scrambling to re-invent themselves and to cope with the changing world.

    And the cycle will continue at an ever increasing pace.

    Perhaps one of the adaptations than man will make will be the realization that it will be necessary to predict what changes will come and to prepare society for them in order to avoid riots and revolutions by those displaced and impoverished by the latest wave of technology.

    We haven't done too well at predicting those changes. The "coming catastrophe" of the year 2000 fell far short of a yawn. Visionaries, such as the people at Xerox's Palo Alto Research Center, were regularly ignored for creating such useless devices as personal computers capable of networking with other computers. At the turn of the 19th to 20th century, the head of the US patent office announced that the patent office should be closed since everything that could be invented had been invented.

    It will be the individual visionary-entrepreneur who will see the path of the future. Unfortunately, he/she will too often be drowned out by the strident voices of the prophets of doom peddling their dime-novel, global warming grade road apples on NPR.

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