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Comment by chongli | Hacker News Reader

I’ve seen this argument stated many times but it’s incomplete. If the majority of the population is made redundant and unable to earn any income then what happens to consumer spending? It drops to zero and it takes the likes of Amazon, Walmart, and countless other retailers as well as manufacturers with it.

Are they going to just let that happen?

Feudalism worked because the knights and lords needed people to work their land and provide a product: food. If machines can do that instead then there won’t be any farm workers, so it won’t really be feudalism. But then there won’t be any jobs in the city either, so no one will be able to afford food and all of that farmland will be worthless as well.

The loyal samurai-innovators aren’t enough to consume all that food and consumer goods. The whole economy will collapse in this scenario.

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In a democracy, if the majority of the population is unable to earn a living they can just vote themselves a living.

Such a system also happens to be in the interest of the haves because they need consumers to purchase their products that they generate with machines.

If you can mass produce the production machines to the extent that everybody can have them, you can create a post-scarcity society[0] which is the only condition under which communism is a workable system.

Another possibility would be that the market simply produces other jobs that currently don't exist for all of the people put out of work. So far, that's what has happened after ever "job destroying" technological innovation.

[0]: Post-scarcity means the price of everything falls to 0 or very close to 0 because it is trivial to create.

There’s never going to be post-scarcity. Resources are finite, land is finite, energy is finite. These things may become ever-more concentrated into the hands of a few, but they’ll never be infinite. New sources can always be captured and monopolized.

The alternative to people voting themselves an income is wealthy people taking away the vote. If they can defend their holdings with robotic drone armies and AI-powered mass surveillance then democracy will collapse along with the economy.

We need look no further than Eritrea for a real-world case study of what I’m talking about. A country with vast slums of people in absolute destitution kept separate from the wealthy aristocrats by walls and armed guards. Replace those guards with robots and there’s no reason that couldn’t happen here.

Scarcity doesn't mean "limited," it means "not enough."

Enough but still limited is not longer scarce.

Well, you could say the same today: why would the capital owners pay stagnating or decreasing real wages if they sell their products to those very same wage earners? Say, if I own a furniture store, isn't it in my interest for Walmart and McDonald's to pay good wages, so that more people can afford my products? But what real leverage do I have to get that outcome? It's not like there's a dark cabal of employers that sets wages.

Money is just a made up thing we invented to measure economic value. If a worker is truly valueless, then he gets no money and simply does not participate in the economy. For all the capitalist system is concerned, it's as if he's a starving subsistence farmer in sub-saharian Africa, he's outside the economy and there are no money to be made supplying him with goods and services. The economy does not "collapse" compared to a virtual level where all starving people of Africa are housed, fed, card and amazoned.

Of course you could interpret this as just an extreme form of inequality, where the redundant get some form of food and shelter covering UBI, while the capitalist and the samurai class earn riches beyond comprehension. The system is feudal in the sense that all relative wealth (thus, political power) is concentrated to a small number of people, not that somebody necessarily starves. The serfs could have quite a comfortable life, arguing on HN etc.

There is no money to be made supplying a subsistence farmer with goods and services? Are you aware of the donations business?

For all the capitalist system is concerned, it's as if he's a starving subsistence farmer in sub-saharian Africa, he's outside the economy and there are no money to be made supplying him with goods and services. The economy does not "collapse" compared to a virtual level where all starving people of Africa are housed, fed, card and amazoned.

I brought up an African country in another comment in this discussion: Eritrea. This is a country where a tiny elite owns pretty much all of the wealth in the country and the bulk of the population live in vast slums of unimaginable deprivation. There is no path for those people to achieve even the most basic working-class lifestyle because they have nothing to offer the wealthy aristocrats of their country.

If we are reduced to that situation, I consider it a collapse, and I think that people take for granted the belief such a collapse is impossible. It is absolutely possible. A wealthy elite tended by an army of robotic servants living in obscene luxury, maintained by a handful of samurai technologists, while untold billions live in squalor. Elections reserved only for the landed elite. The vast population left freezing in the darkness.

Well, you could say the same today: why would the capital owners pay stagnating or decreasing real wages if they sell their products to those very same wage earners?

You can't say the same today. The capital owners right now earn a profit by doing so and their wealth grows. If an AI revolution makes all of their workers redundant then they won't hesitate to lay them all off. McDonald's has already begun the experiment [1].

[1] https://www.newsweek.com/first-ever-mcdonalds-served-robots-...

This is why everyone needs a strong state that can input demand at the bottom.

David Ricardo covered this: Prices will adapt.

Yes. Prices for corn and cheap clothing and consumer electronics will all fall to zero because no one has any money so demand will be zero. But then in response production will halt since there’s no longer any profit to be made.

This widespread contraction of production is economic collapse. So you haven’t answered my question.

Wealthy capitalists aren’t going to keep McDonald’s in business: they don’t eat there. If consumers don’t have any money, McDonald’s collapses.

Second-order effects are hard! Especially when your day-to-day is already consumed by first order effects: keeping your job, putting food on the table.

In times of great turbulence, it pays to hold on to fundamentals. Partly because they're a stable beacon that helps one muddle through; partly because there's little else to hold on to anyway.

On that note, a few observations:

1) We're biological animals. People love profit, but ultimately need other people to realize and enjoy that profit. To your point, in the limit, what good is being the wealthiest man on Earth, if you are the last man on Earth?

The rich and powerful are hardwired to flaunt their power and wealth and social status too, just like the apes we all are. Which puts a lower cap on how much they want to reduce the outside human population, whether consciously or as a 2nd order effect of their "whoopsie, I never!" actions. At some point on the concentration-of-wealth vs population-size curve, capitalism self-aligns with humanism, simply to preserve the biological substrate that powers it.

2) Taking off the human-centric goggles, "profit" is a function (one of many) to optimize. Humans love to optimize because Nature loves to optimize.

Nature's favourite goal appears to be bulldozing energy gradients, reducing free energy, increasing entropy. Everything else a downstream corollary: chemistry, biology, humans, civilizations, ecology.

So any plan to pause or subvert this optimization process is immediately suspect. Especially if that plan lacks a clear articulation of the process and ways to counter it. You and who's army? You think putting ink to paper to draft a regulation will do it? Because "Democracy" and "Will of the people" and "We humans are special"?

That's not a call for cynicism or despondency; just an observation of nature's directionality over the past few billion years. You'll be up against some formidable forces; Nature's rat-race to always do more with less is real, and us men and women merely players.

Having a way to model this space rigorously and explore the various equilibria and inflection points would be cool. Rather than humanity bouncing off the walls with new 1st-order-effect ideologies and religions all the time; a few million murdered here; a starvation there; an economic collapse yonder.

It's an interesting point of view, but the assumption that human society is bound to replicate internally the natural law of increasing entropy is quite the naturalistic fallacy. Until now, there hasn't been, to our knowledge, rational processes in our universe, capable of self reflection and decision making regarding their own behavior and organization, so past observations are not really relevant.

Sure, humanity is just another physical process that will ultimately dissolve in a high entropy lukewarm soup, but as long as we have access to low entropy, high energy density sources, we can buck the trend and choose to do quite unoptimal things, such as assigning individual rights to every individual, even those unfit for reproduction.

Zooming out past the current Stelliferous era of the universe and into the distant black hole and dark eras might risk losing quite a bit of nuance about humanity's nature and destiny.

Of course. Different levels of resolution reveal different details, and 2. was the ultimate zoom-out.

Still, I believe keeping the directionality in mind helps with perspective – even as turbulent whirls and eddies appear to float upstream, miraculously, temporarily.

I now realize I forgot another observation, closer to chongli's original slightly-beyond-human resolution of bust-and-boom economic feedback loops:

3) Most people are pliable and will do as they're told.

Even to their detriment, even all the way to their demise. And the process of human self-domestication is still accelerating.

Historical examples abound; from extremely ancient to uncomfortably recent.

> If the majority of the population is made redundant and unable to earn any income then what happens to consumer spending? It drops to zero and it takes the likes of Amazon, Walmart, and countless other retailers as well as manufacturers with it. Are they going to just let that happen?

This is a reasoning that starts with the idea there is some sort of global conspiracy of the global elite making agreements on what to do. I strongly believe there isn't, at least not on the level you are describing. There is however the underlying capitalist system that demands profit optimization.

If there would be some sort of new product or company that would make all other aspects of the economy obsolete but it would bring massive profits for the stakeholders it would absolutely be launched.

Companies don't make predictions on what might happen to the economy if they launch x, y or z.

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