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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 17 2012: Perhaps unskilled workers will be paid to think. Perhaps automation will allow us to simply think, exercise and educate ourselves in sustainable behavior. It could be that economic innovation will provide the foundation for a truly humane global commerce policy, one that taxes each market transaction and distributes it according to real-time humanitarian needs.
    • Sep 17 2012: I would say that for automation to do this to our society we would first have do develop better energy sources. Right now all economy is based around energy and for us to transition into a money less society energy need to be free and abundant....

      I think we all dream of that day ;)
      • Sep 19 2012: Noa: You're quite right, but it is no dream. A perfectly safe, cheap, Green form of limitless energy production has already been invented and demonstrated, and right now, the Chinese are developing it further. I mean the forgotten nuclear powered airplane engine project from the Cold war: the Thorium LFTR power plant. Look it up on Youtube.
        • Sep 19 2012: Cool, that sounds really good! But also a little dangerous having China sitting on all that energy?
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          Sep 27 2012: I agree - the USA had a Thorium test reactor in the 1960's - why didn't it get developed further and provided cheap, sustainable, safe (no need to have a pressurised dome), with little radioactive waste? Answer - because the politicians wanted a Uranium/plutonium reactor to make BOMBS with! How's that for joined up thinking?
          Energy is the answer to nearly all the worlds problems - so we need to get on with developing both Thorium and solar massive energy installations (both are sustainable and 'green')


      • Sep 20 2012: You can't pay people in energy, especially if its cheap, then its not worth much. You have to pay people in money.
        Money is of course, nothing special, just a medium of exchange that allow for dissimilar commodities to be valued according to a agreed upon formula.

        It can be anything but the source must be controlled. If money were leaves, we would all be millionaires, but each individual leaf would be valuless because it grew on a tree.

        So, if you are going to pay someone, they must do something of value to gain that pay.
        If you are just going to put people on the dole, then you are creating a debt that must be paid back in the future by people who do work, or you can print more money and make each exisitng curency unit that much less valuable.

        Every extinct civilization in th past has gone this route and crashed hard.

        We are actually running the automation experiment in real time in our economy. We went from agrarian to industrial, to automation to globalization.
        Global trade is just ofshore automation using cheap people rather than cheap machines but it has the same effect.
        Automation taken to its ultimate conclusion leaves us with a population that has nothing to be paid for. You end up looking like Greece, where everyone is a cab driver or a barista.
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          Sep 20 2012: When you boss pays you a paycheck and you buy gas for your car, part of your paycheck was the energy that got you back and forth to work. So value of the paper money is equated in energy, food, cloths, comfort.... Indirectly, if paper is equal to those objects and conditions, you are being paid not only in energy, but solid forms of matter.

          Gas is energy.

          Really cheap energy and automated machines could create an environment where we just don't have to work anymore. Once your belly is full and the cloth is on your body, what do you care? Suddenly it's time for fun, games, education, parenting, hanging around with Socrates.

          If money becomes worthless, we will just have to exchange our company with one another.
          That could be much more fun than slaving away at the grind each and every day.

          The only reason Greece needed money was to pay the soldiers to protect them. The slaves did all the work. If automated machines became like slaves, we could live like them. If there was nothing to be protected from, why would we need money?
        • Sep 20 2012: "You can't pay people in energy, especially if its cheap, then its not worth much. You have to pay people in money."

          No, you need energy to make/provide useful goods and services, you might as well pay people in units of energy. Money without energy is useless, energy without money works fine.
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          Sep 27 2012: Ok, there is a really serious discussion point here - we see the economy / society from a very limited point of view. The real underlying issue (once the bots are doing everything in say 50 to 100 years or so), is RESOURCES ... call it the move from Capitalism to Resourcism.


          Resources with continue to become scarcer (until we leave for the stars) and it is the share-out of these finite resources (including nice bits of land on which to live and play) that will be the main issue for the human race - this means new politics - and no-one is thinking about how we move on this yet, even though our children or certainly grandchildren will be faced with this move directly during their lives. Payment is likely to be made (as no one is working) by a 'share' of the resources, these are likely to be swappable and finite as they will reflect precise physical resources (so no inflation et al)

          see - Capitalism vs Resourcism and new political structures
      • Sep 20 2012: Noa: Luckily for all of us, just about every country in the world is "sitting on all that energy", if they would only wake up. Unlike oil and coal, Thorium is so plentiful, that it would not be worth fighting about. See Thorium Energy Alliance for more details, or Youtube. Right now, in the US, Thorium is a waste product they would pay you to take away.
    • Sep 25 2012: That hasn't been my experience. I used to work in the IT center of a company that made automation products. At first, we were considered skilled for being mainframe operators. Then, as they expanded their IT system to include several server farms, the comm network, databases and apps, etc, we had the added responsibility of monitoring that as well as the mainframe, but we also got classed as unskilled labor, script followers. Unskilled labor aren't paid to think in the business world. They are paid to execute orders and follow rules.

      Eventually, the whole dept was outsourced and all but four of us lost our jobs at the height of the recession. I'm still trying to find a job that will allow me to keep my house, but I fear that is not going to happen. The bank is going to get the house and I'll have to file for chapter 7 to avoid paying the difference of what they end up selling it for and what I mortgaged for.

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