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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 28 2012: I presume (having not referenced this, as yet) automation would result in at least a few significant effects on society: (1) Development of new skilled jobs and production chains, for design, engineering, and production of the tools of automation; (2) Smaller labor forces, in automated tasks; (3) Technical jobs creation, for employees operating and maintaining the machines of any newly automated part of a production line.

    From the bluesky point of view, I'd like to think it could also result in more leisure time for workers - therefore more opportunities for community involvement, and probably more local economic involvement consequently. I'm afraid that's not been the case, though, in how it's been working out so far, in the US. (I think it seems bleak to me, personally, in how it's been working out so far - namely, as starting with work weeks far exceeding the typical 40 hour "norm" being not uncommon at all, to my understanding, and following from that, also less community involvement in society, and less local economic interaction, consequent with the diminished leisure time.)

    Considering automation, specifically, there are tasks that cannot be usefully automated - so simple as landscaping and gardening and so complex as expert medical work. Regardless of how far automation would proceed, in mass production industries, no doubt jobs will still exist for fulfilling those tasks, in society.

    As far as possible unemployment resulting from automation, in regards to the situation of being layed off if a plant becomes newly automated, that would not be an end to one's employability, of course. Retraining and horizontal job shift become possible, at least at the transition.

    Considering economic shift, the number of economic flows in a society is not limited to those passing through an automated production chain. Without analysis, I wouldn't want to blame machinery for economic difficulty, . (In fact, I'd probably look at management, first. ;)

    Intriguing questions

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