<p>I would strongly recommend you to read Erik Brynjolfsson, Andrew Mcafee et al for some serious and real insights about this topic. The world economic forum this year had the same theme. 
In my view (which are heavily derived from the works of the above mentioned dignitaries) the problems arising from complete automation will be the lowering or stagnation of income levels. As Erik mentions in his Ted talk, productivity levels are at all time high but income levels are not. This was not the case in previous technological revolutions. People and systems adapted to new technologies and income rose along with productivity. Now they don't share the same relationship. One of the reasons is that we are not changing our systems well to absorb the technology. For example, if people are saving a lot of time because of automation, they should be able to spend it in something constructive. May be entrepreneurship, maybe knowledge work. To make all those automation work, people are required to program, design, develop and create. There needs to be a shift from typical work to knowledge work. If such a shift is not there and that too at a speed that matches with the speed of technological changes then income levels will continue to fall, unemployment will rise. 
In Andrew Mcafee's words, "we need to RACE WITH THE MACHINE".     </p>

CC BY-SA 3.0
2016-04-28T16:18:03.377Z
I think another important thing to look at is the income gap would likely widen as share of income shifts completely to income from owning shares or portions of firms' (and therefore their profits). Currently, we notice that income in lower income groups are largely from wages, and income in higher income groups are largely in the form of profits of firms, so this would in fact cause the income gap to be even wider than it currently is.
DornerA
CC BY-SA 3.0
2016-04-28T20:20:31.833Z
True. I agree. Income will be with those who own automated things.
Sub-Optimal
CC BY-SA 3.0
2016-04-28T05:36:39.947Z
2016-04-28T05:36:39.947Z
Sub-Optimal
<p>With TOTAL automaton, the greatest issue would be that nobody would be working, and the rich would own all the production capacity, so nobody else will earn any money to buy from them.  Effectively, overall demand would dry up even as people are desperate for the things they need, but can't afford to buy even at lower and lower prices.  Even the wealthy would lose out, because there would be no consumers left able to buy their stuff.  Essentially, the economy would grind to a halt unless wealth redistribution was forced by socialism, so that more people could afford to buy things.</p>

<p>To some extent we are already starting to see a shift in this direction, with increasing automation, ever more skewed wealth distribution, and slowing growth and demand as the masses can't afford to buy what they need, even though it can be produced more easily.  The picture won't pretty if nobody can earn a living without any income.</p>

<p>However, that is only the case with complete automation, where there is literally nothing left for people to do.  In practice, simple repetitive tasks tend to get automated first, leaving people with more time to perform more complex tasks that cannot (yet) be automated, and so overall productivity and efficiency increases without impacting overall employment.  So people are still earning a living wage, and they can buy more things that are now cheaper and easier to make.</p>

<p>Automation really only becomes a problem when even the most complex tasks can be automated, and that is the great risk of artificial intelligence that people like Stephen Hawking say will spell the end of the world.  In my view he's probably right.  Not because machines will consciously take over the world, but because they will make people and employment (the potential to earn a living) redundant.</p>

CC BY-SA 3.0
2016-04-28T16:12:54.107Z
"there would be nobody left earning money to buy things." This is not correct. When we look at the income of a person, they have their wages (which would be abolished), and their income from owning shares or portions of firms, which would come in the form of a percentage of the firm's profits. Total automation would simply shift the share of income earned completely to the latter of these two options.
DornerA
CC BY-SA 3.0
2016-04-28T18:10:47.627Z
You completely missed my point. Owning shares in a company is of no value if the company has no customers. You can't run an entire economy based on people owning shares in companies whose customers make all their money from having shares in those companies.  That's called a pyramid scheme, aka multi-level marketing, which is as close as you can get to a Ponzi scheme.
Kelvin
CC BY-SA 3.0
2016-04-29T23:09:12.193Z
LOL, as long as people have needs there will be customers and self-sufficient producer-consumers. Since it's less efficient to produce everything you consume, many people will not be self-sufficient producer-consumers. They will trade, that is, they will be customers.
H2ONaCl
CC BY-SA 3.0
2016-04-30T08:43:25.970Z
LOL back - Ultimately the rich will own all the production capacity, so nobody else will produce anything to trade, or earn any money to buy from them.  The economy depends on as many people being able to satisfy needs as those having needs, so it will indeed grind to a halt.
Kelvin
CC BY-SA 3.0
2016-04-28T08:02:18.167Z
2016-04-30T07:38:39.957Z
2016-04-30T07:38:39.957Z
Kelvin
<p>I was wondering. Suppose that in the whole realm of economic activities, all those activities were fully automized. From the finding of raw resources to the making of products that leave the factories, so the owners of the companies that perform the many tasks from resources to end-product don´t need employees anymore; the maintenance of infrastructures; social- and health-care; in short, every kind of work were we need in this time people for (I´m aware it´s rather far fetched, but often when you push things to the limit some things can become clear).</p>

<p>Would the world be a place of milk and honey, or will conflicts arise? </p>

CC BY-SA 3.0
2016-04-27T16:18:08.757Z
This may be a duplicate of another question on this site: "How does economic theory handle full automation of production resulting in full unemployment?"
DornerA
CC BY-SA 3.0
2016-04-27T16:45:29.343Z
It is not deemed a duplicate if the other one has no answer. Strongly related questions: (This is the one mentioned above.)
http://economics.stackexchange.com/questions/9994/has-automation-of-technology-shown-to-have-a-better-impact-on-the-world-
(This is another one.)
http://economics.stackexchange.com/questions/9176/how-will-non-rich-citizens-make-a-living-if-jobs-keep-getting-replaced-by-robots
Giskard
<macroeconomics>
A world with total automation
descheleschilder
# A world with total automation

(Asked by: username_0 on 2016-04-27)

I was wondering. Suppose that in the whole realm of economic activities, all those activities were fully automized. From the finding of raw resources to the making of products that leave the factories, so the owners of the companies that perform the many tasks from resources to end-product don´t need employees anymore; the maintenance of infrastructures; social- and health-care; in short, every kind of work were we need in this time people for (I´m aware it´s rather far fetched, but often when you push things to the limit some things can become clear).

Would the world be a place of milk and honey, or will conflicts arise?

**Tags:** macroeconomics
> **Comments:**
> **username_1**: This may be a duplicate of another question on this site: "How does economic theory handle full automation of production resulting in full unemployment?"  
> **username_2**: It is not deemed a duplicate if the other one has no answer. Strongly related questions: (This is the one mentioned above.) http://economics.stackexchange.com/questions/9994/has-automation-of-technology-shown-to-have-a-better-impact-on-the-world- (This is another one.) http://economics.stackexchange.com/questions/9176/how-will-non-rich-citizens-make-a-living-if-jobs-keep-getting-replaced-by-robots  

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## 2 answers

### Answer by username_3 on 2016-04-28. Score: 1

I would strongly recommend you to read Erik Brynjolfsson, Andrew Mcafee et al for some serious and real insights about this topic. The world economic forum this year had the same theme.
In my view (which are heavily derived from the works of the above mentioned dignitaries) the problems arising from complete automation will be the lowering or stagnation of income levels. As Erik mentions in his Ted talk, productivity levels are at all time high but income levels are not. This was not the case in previous technological revolutions. People and systems adapted to new technologies and income rose along with productivity. Now they don't share the same relationship. One of the reasons is that we are not changing our systems well to absorb the technology. For example, if people are saving a lot of time because of automation, they should be able to spend it in something constructive. May be entrepreneurship, maybe knowledge work. To make all those automation work, people are required to program, design, develop and create. There needs to be a shift from typical work to knowledge work. If such a shift is not there and that too at a speed that matches with the speed of technological changes then income levels will continue to fall, unemployment will rise.
In Andrew Mcafee's words, "we need to RACE WITH THE MACHINE".

> **Comments:**
> **username_1**: I think another important thing to look at is the income gap would likely widen as share of income shifts completely to income from owning shares or portions of firms' (and therefore their profits). Currently, we notice that income in lower income groups are largely from wages, and income in higher income groups are largely in the form of profits of firms, so this would in fact cause the income gap to be even wider than it currently is.  
> **username_3**: True. I agree. Income will be with those who own automated things.  

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### Answer by username_4 on 2016-04-28. Score: -3

With TOTAL automaton, the greatest issue would be that nobody would be working, and the rich would own all the production capacity, so nobody else will earn any money to buy from them. Effectively, overall demand would dry up even as people are desperate for the things they need, but can't afford to buy even at lower and lower prices. Even the wealthy would lose out, because there would be no consumers left able to buy their stuff. Essentially, the economy would grind to a halt unless wealth redistribution was forced by socialism, so that more people could afford to buy things.

To some extent we are already starting to see a shift in this direction, with increasing automation, ever more skewed wealth distribution, and slowing growth and demand as the masses can't afford to buy what they need, even though it can be produced more easily. The picture won't pretty if nobody can earn a living without any income.

However, that is only the case with complete automation, where there is literally nothing left for people to do. In practice, simple repetitive tasks tend to get automated first, leaving people with more time to perform more complex tasks that cannot (yet) be automated, and so overall productivity and efficiency increases without impacting overall employment. So people are still earning a living wage, and they can buy more things that are now cheaper and easier to make.

Automation really only becomes a problem when even the most complex tasks can be automated, and that is the great risk of artificial intelligence that people like Stephen Hawking say will spell the end of the world. In my view he's probably right. Not because machines will consciously take over the world, but because they will make people and employment (the potential to earn a living) redundant.

> **Comments:**
> **username_1**: "there would be nobody left earning money to buy things." This is not correct. When we look at the income of a person, they have their wages (which would be abolished), and their income from owning shares or portions of firms, which would come in the form of a percentage of the firm's profits. Total automation would simply shift the share of income earned completely to the latter of these two options.  
> **username_4**: You completely missed my point. Owning shares in a company is of no value if the company has no customers. You can't run an entire economy based on people owning shares in companies whose customers make all their money from having shares in those companies.  That's called a pyramid scheme, aka multi-level marketing, which is as close as you can get to a Ponzi scheme.  
> **username_5**: LOL, as long as people have needs there will be customers and self-sufficient producer-consumers. Since it's less efficient to produce everything you consume, many people will not be self-sufficient producer-consumers. They will trade, that is, they will be customers.  
> **username_4**: LOL back - Ultimately the rich will own all the production capacity, so nobody else will produce anything to trade, or earn any money to buy from them.  The economy depends on as many people being able to satisfy needs as those having needs, so it will indeed grind to a halt.  

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