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Mats Kaarbø

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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 27 2012: Everyone relates automation to labor, and yes, it is part of the picture. But it needs to be equated to efficiency. Labor reduction is a small part of the justification of a new machine, let's say, in a manufacturing environment. You have quality consistency, space reduction, and less downtime. You also still have the employment of programmers and operators. Point being, just because there is a reduction in labor does not mean it harms our economy. It puts our businesses in a better position to be competitve. Therefore, the business improves and grows creating economy.

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